NEW YORK, May 10, 2017 /PRNewswire/ -- Five Oaks
Investment Corp. (NYSE: OAKS) ("we", "Five Oaks" or "the
Company") today announced its financial results for the first
quarter ended March 31, 2017. For the
first quarter, the Company reported GAAP net income of $1.5 million, or $0.08 per basic and diluted share, comprehensive
income of $5.0 million, or
$0.29 per basic and diluted share,
and core earnings (1) of $2.7
million, or $0.15 per basic
and diluted share. The Company also reported a net book value of
$6.14 per share on a basic and
diluted basis at March 31, 2017.
First Quarter Summary
- Realized a positive economic return on our common stock of 4.8%
(19.3% annualized), comprised of $0.14 increase in net book value per share and
$0.15 dividend per common share
(2).
- We continued the reduction of Non-Agency RMBS exposure from
$12.8 million at December 31, 2016 to $4.9
million at March 31, 2017 (on
a non-GAAP combined basis). We also reduced our Multi-Family
MBS exposure from $91.5 million at
December 31, 2016 to $55.5 million at March 31,
2017.
- We continued to redeploy a portion of the capital released from
selling down our credit exposure into Agency RMBS, which increased
from $790.2 million at December 31, 2016 to $999.9 million at March
31, 2017. In order to minimize the potential impact of
interest rate volatility, the increase was composed of purchases of
Agency hybrid-ARMs.
(1) Core Earnings is a non-GAAP measure that we
define as GAAP net income, excluding impairment losses, realized
and unrealized gains or losses on the aggregate portfolio and
certain non-recurring upfront costs related to securitization
transactions or other one-time charges. As defined, Core Earnings
includes interest income or expense and premium income or loss on
derivative instruments.
(2) Economic return is a non-GAAP measure that we
define as the sum of the change in net book value per common share
and dividends declared on our common stock during the period over
the beginning net book value per common share.
Management Observations
David Carroll, Five Oaks'
Chairman and CEO commented: "As we had anticipated when reporting
our fourth quarter 2016 results, market expectations for speedy
implementation of the new administration's economic and fiscal
plans faded somewhat during the first quarter, and market
conditions as a result exhibited lower volatility than the prior
quarter. The 10-year treasury fluctuated within a relatively narrow
band of 2.31% to 2.63%, but uncertainty persists with regard to the
extent and timing of future Federal Reserve interest rate increases
as well as the manner in which the Fed plans to begin reducing
their balance sheet investment portfolio. Mortgage spreads have
already widened out somewhat since quarter end, likely in
anticipation of future Fed actions, and we retain a defensive bias
in expectation that there may be further spread widening to come as
such actions unfold.
We have now effectively completed our transition to a simpler
business strategy that is easier to understand. In particular, we
have sold substantially all of our Non-Agency RMBS securities, and
significantly reduced our Multi-Family MBS exposure, focusing on
those positions that were repo financed. We have continued to
reallocate a portion of the capital released from these sales into
intermediate Agency hybrid floating-rate securities, a sector that
we believe still offers attractive risk-adjusted investment
opportunities, and for which financing conditions remain positive
after last year's money market reforms. I am particularly pleased
that an increase of $0.14 in book
value per share made a positive contribution to our overall
economic return of 4.8% for the quarter. While this will not always
be possible should volatility spike again, I do believe it
validates our continued focus on methodical and dynamic hedging
strategies. On the cost side, as is typical, the first quarter
included some front-loading of annual expenses and some residual
expenses associated with our exit from the prime jumbo business. We
expect the cost reduction benefits of this to be evident over the
remainder of the year,
Looking ahead to the balance of 2017, we will continue to search
for incremental cost saving opportunities, as well as further
growth of our backstop guarantee business for rep and warranty risk
on prime jumbo mortgage loans. When combined with our core holdings
in Multi-Family MBS, I believe that our simplified business
strategy concentrated on the Agency hybrid sector positions us well
within the mortgage REIT sector".
Investment Portfolio and Capital Allocation
The following table summarizes certain characteristics of our
investment portfolio and the related allocation of our equity
capital on a non-GAAP combined basis as of March 31, 2017:
For the period
ended
March 31,
2017
|
Agency
MBS
|
Multi-Family
MBS
(1)(2)
|
Non-Agency
RMBS (1)(2)
|
Residential
Loans (3)
|
Unrestricted
Cash (4)
|
Total
|
Amortized
Cost
|
1,002,116,876
|
52,876,433
|
11,063,929
|
7,784,817
|
32,713,356
|
1,106,555,411
|
Market
Value
|
999,910,670
|
55,451,871
|
4,877,688
|
7,265,907
|
32,713,356
|
1,100,219,492
|
Repurchase
Agreements
|
(948,712,000)
|
(20,362,000)
|
(2,151,000)
|
-
|
-
|
(971,225,000)
|
Hedges
|
4,872,365
|
104,573
|
-
|
-
|
-
|
4,976,938
|
Other
(5)
|
4,585,765
|
(26,950)
|
58,632
|
12,563
|
(506,150)
|
4,123,860
|
Restricted Cash
and Due to Broker
|
6,792,125
|
(14,595)
|
-
|
-
|
-
|
6,777,530
|
Equity
Allocated
|
67,448,925
|
35,152,899
|
2,785,320
|
7,278,470
|
32,207,206
|
144,872,820
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt/Net Equity
(6)
|
14.07
|
0.58
|
0.77
|
-
|
-
|
6.70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the period
ended
March 31,
2017
|
Agency
MBS
|
Multi-Family
MBS
|
Non-Agency
RMBS
|
Residential
Loans
(7)
|
Unrestricted
Cash
|
Total
|
Yield on Earning
Assets (8)
|
2.67%
|
8.84%
|
-0.49%
|
49.37%
|
-
|
3.16%
|
Less Cost of
Funds
|
0.85%
|
1.10%
|
0.79%
|
-
|
-
|
0.86%
|
Net Interest
Margin (9)
|
1.82%
|
7.74%
|
-1.28%
|
49.37%
|
-
|
2.30%
|
|
|
|
(1) Information with respect to Non-Agency RMBS and
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 2011-K13, FREMF 2012-KF01, and
CSMC 2014-OAK1 Trusts, the fair value of our
investments in
Non-Agency RMBS is $0, and the fair value of our investments in
Multi-Family MBS is $35,810,200.
|
(2) Includes the fair value of our net investments in the
FREMF 2011-K13, FREMF 2012-KF01, and CSMC 2014-OAK1
Trusts.
|
(3) Includes mortgage servicing rights.
|
(4) Includes cash and cash equivalents.
|
(5) Includes interest receivable, prepaid and other
assets, interest payable, dividend payable and accrued expenses and
other liabilities.
|
(6) Ratio is a reflection of the average haircuts for
each asset categories. It does not reflect or include the
unrestricted cash that the Company set aside
for these asset
categories.
|
(7) Includes income on mortgage servicing
rights.
|
(8) Information is presented on a non-GAAP basis. On a
GAAP basis, the total yield on average interest earning assets is
2.97%.
|
(9) Net
Interest Margin is the difference between our Yield on Earning
Assets and our Cost of Funds.
|
Comparative Expenses
The following table provides a detailed breakdown of the
composition of our expenses on a non-GAAP basis for the quarters
ended March 31, 2017 and December 31, 2016 (percentages are
annualized):
Expenses
|
For the quarter
ended
March 31,
2017
|
For the quarter
ended
December 31,
2016
|
|
|
|
Management
Fees
|
$
544,510
|
$
598,867
|
G&A Expenses
(1)
|
$
905,555
|
$
688,171
|
Operating Expenses
Reimbursable to Manager
|
$
1,208,943
|
$
1,173,830
|
Other Operating
Expenses
|
$
220,496
|
$
87,038
|
Compensation
Expense
|
$
52,874
|
$
53,021
|
Total
Expenses
|
$
2,932,378
|
$
2,600,927
|
|
|
|
Period-End
Capital
|
$
144,872,820
|
$
142,466,865
|
|
|
|
Management
Fees
|
$
544,510
|
$
598,867
|
G&A, Other
Operating Expenses and Reimbursable
|
$
2,218,081
|
$
1,763,072
|
Compensation
Expenses
|
$
52,874
|
$
53,021
|
Expenses related to
Prime Jumbo Loans
|
$
116,913
|
$
185,967
|
|
|
|
Management Fees as %
of Capital
|
1.50%
|
1.68%
|
G&A, Other,
Reimbursable and Compensation as % of Capital
|
6.27%
|
5.10%
|
Expenses related to
Prime Jumbo Loans as % of Capital
|
0.32%
|
0.52%
|
|
(1)
Excludes $683,017 and $696,616 in non-interest expense attributable
to the consolidated trusts for the quarters ended March 31, 2017
and
December 31, 2016,
respectively.
|
The increase in G&A, Other Operating, Reimbursable and
Compensation Expenses as a percentage of Capital over the past
quarter is primarily a function of higher audit, administrator and
legal expenses relative to the fourth quarter of 2016. Certain of
these expenses are front-loaded for the year, and accordingly we
anticipate a decline in such expenses for the remainder of
2017.
Operating Performance
The following table summarizes the Company's GAAP and non-GAAP
earnings measurements for the quarters ended March 31, 2017 and December 31, 2016:
|
Quarter Ended
March 31, 2017
|
Quarter Ended
December 31, 2016
|
|
Earnings
|
Earnings
|
Per diluted
weighted
share
|
Annualized
return on
average
equity
|
Earnings
|
Per diluted
weighted share
|
Annualized
return on
average
equity
|
|
|
|
|
|
|
|
Core Earnings
*
|
$
2,683,807
|
$
0.15
|
5.32%
|
$
2,789,902
|
$
0.19
|
5.85%
|
GAAP Net Income
(Loss)
|
$
1,488,632
|
$
0.08
|
2.95%
|
$
10,647,288
|
$
0.72
|
22.31%
|
Comprehensive Income
(Loss)
|
$
5,039,534
|
$
0.29
|
9.99%
|
$
(639,702)
|
$
(0.04)
|
(1.34)%
|
|
|
|
|
|
|
|
Weighted Ave Shares
Outstanding
|
|
17,539,258
|
|
|
14,762,006
|
|
Weighted Average
Equity
|
|
$204,528,652
|
|
|
$189,868,791
|
|
Stockholders' Equity and Book Value Per Share
As of March 31, 2017, our
stockholders' equity was $144.9
million and our book value per common share was $6.14 on a basic and fully diluted basis.
Dividends
The Company declared a dividend of $0.05 per share of common stock for the months of
April, May and June 2017.
Second Quarter 2017 Common Stock Dividends
Month
|
Dividend
|
Record
Date
|
Payment
Date
|
|
|
|
|
April 2017
|
$0.05
|
April 17,
2017
|
April 27,
2017
|
|
|
|
|
May 2017
|
$0.05
|
May 15,
2017
|
May 30,
2017
|
|
|
|
|
June 2017
|
$0.05
|
June 15,
2017
|
June 29,
2017
|
In accordance with the terms of the 8.75% Cumulative Redeemable
Preferred Stock ("Series A Preferred Stock") of the Company, the
board of directors has also declared monthly cash dividend rates
for the second quarter of 2017 of $0.1823 per share of Series A Preferred
Stock:
Second Quarter 2017 Series A Preferred Stock
Dividends
Month
|
Dividend
|
Record
Date
|
Payment
Date
|
|
|
|
|
April 2017
|
$0.1823
|
April 17,
2017
|
April 27,
2017
|
|
|
|
|
May 2017
|
$0.1823
|
May 15,
2017
|
May 30,
2017
|
|
|
|
|
June 2017
|
$0.1823
|
June 15,
2017
|
June 27,
2017
|
Forward-Looking Statements
This press release includes "forward-looking statements" within
the meaning of the U.S. securities laws that are subject to risks
and uncertainties. These forward-looking statements include
information about possible or assumed future results of the
Company's business, financial condition, liquidity, results of
operations, plans and objectives. You can identify forward-looking
statements by use of words such as "believe," "expect,"
"anticipate," "estimate," "plan," "continue," "intend," "should,"
"may" or similar expressions or other comparable terms, or by
discussions of strategy, plans or intentions. Statements regarding
the following subjects, among others, may be forward-looking: the
return on equity; the yield on investments; the ability to borrow
to finance assets; and risks associated with investing in real
estate assets, including changes in business conditions, interest
rates, the general economy and political conditions and related
matters. Forward-looking statements are based on the Company's
beliefs, assumptions and expectations of its future performance,
taking into account all information currently available to the
Company. Actual results may differ from expectations, estimates and
projections and, consequently, you should not rely on these forward
looking statements as predictions of future events. Forward-looking
statements are subject to substantial risks and uncertainties, many
of which are difficult to predict and are generally beyond the
Company's control. Additional information concerning these and
other risk factors are contained in the Company's most recent
filings with the Securities and Exchange Commission, which are
available on the Securities and Exchange Commission's website at
www.sec.gov.
All subsequent written and oral forward-looking statements that
the Company makes, or that are attributable to the Company, are
expressly qualified in their entirety by this cautionary notice.
Any forward-looking statement speaks only as of the date on which
it is made. Except as required by law, the Company is not obligated
to, and does not intend to, update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
Non-GAAP Financial Measures
For financial statement reporting purposes, GAAP requires us to
consolidate the assets and liabilities of the FREMF 2011-K13, FREMF
2012-KF01, and CSMC 2014-OAK1 Trusts. However, our maximum
exposure to loss from consolidation of the trusts is limited to the
fair value of our net investment therein. We therefore have also
presented certain information as of March
31, 2017 and December 31, 2016
that includes our net investments in the consolidated trusts. This
information as well as core earnings, economic return and
comparative expenses constitute non-GAAP financial measures within
the meaning of Item 10(e) of Regulation S-K, as promulgated by the
SEC. While we believe the non-GAAP information included in this
press release provides supplemental information to assist investors
in analyzing that portion of our portfolio composed of Non-Agency
RMBS and Multi-Family MBS, and to assist investors in comparing our
results with other peer issuers, these measures are not in
accordance with GAAP, and they should not be considered a
substitute for, or superior to, our financial information
calculated in accordance with GAAP. Our GAAP financial results and
the reconciliations from these results should be carefully
evaluated.
Reconciliation
of GAAP to Core Earnings
|
|
|
|
GAAP to Core
Earnings Reconciliation
|
Three Months
Ended
|
Three Months
Ended
|
|
March 31,
2017
|
December 31,
2016
|
Reconciliation of
GAAP to non-GAAP Information
|
|
|
Net Income (loss)
attributable to common shareholders
|
$
|
1,488,632
|
$
|
10,647,288
|
|
|
|
Adjustments for
non-core earnings
|
|
|
Realized (Gain) Loss
on sale of investments, net
|
$
|
9,317,003
|
$
|
3,854,528
|
Unrealized (Gain)
Loss on fair value securities
|
$
|
(9,448,270)
|
$
|
1,113,666
|
Realized (Gain) Loss
on derivative contracts, net
|
$
|
(2,233,051)
|
$
|
(78,876)
|
Unrealized (Gain)
Loss on derivative contracts, net
|
$
|
3,077,088
|
$
|
(12,667,801)
|
Realized (Gain) Loss
on mortgage loans held-for-sale
|
$
|
174
|
$
|
34,988
|
Unrealized (Gain)
Loss on mortgage loans held-for-sale
|
$
|
3,709
|
$
|
148,138
|
Unrealized (Gain)
Loss on mortgage servicing rights
|
$
|
126,446
|
$
|
(415,376)
|
Unrealized (Gain)
Loss on multi-family loans held in securitization trusts
|
$
|
(1,299,630)
|
$
|
(385,309)
|
Unrealized (Gain)
Loss on residential loans held in securitization trusts
|
$
|
368,343
|
$
|
(324,209)
|
Other
income
|
$
|
(12,171)
|
$
|
(5,465)
|
Subtotal
|
$
|
(100,363)
|
$
|
(8,725,716)
|
|
|
|
Other
Adjustments
|
|
|
Recognized
compensation expense related to restricted common
stock
|
$
|
6,620
|
$
|
6,771
|
Adjustment for
consolidated securities/securitization costs
|
$
|
1,136,592
|
$
|
861,559
|
Adjustment for
one-time charges
|
$
|
152,322
|
$
|
-
|
Core
Earnings
|
$
|
2,683,807
|
$
|
2,789,902
|
|
|
|
|
|
Weighted average
shares outstanding - Basic and Diluted
|
|
17,539,258
|
|
14,762,006
|
|
|
|
|
|
Core Earnings per
weighted share outstanding - Basic and Diluted
|
$
|
0.15
|
$
|
0.19
|
Additional Information
As of March 31, 2017, we have
determined that we were the primary beneficiary of two Multi-Family
MBS securitization trusts, the FREMF 2011-K13 Trust, and the FREMF
2012-KF01 Trust. As a result, we are required to consolidate the
trusts' underlying multi-family loans together with their
liabilities, income and expenses in our consolidated financial
statements. We have elected the fair value option on the assets and
liabilities held within the trusts, which requires that changes in
valuation in the assets and liabilities of these trusts be
reflected in our consolidated statements of operations.
A reconciliation of our net capital investment in multi-family
investments to our financial statements as of March 31, 2017 is set forth below:
Multi-Family Loans
held in Securitization Trusts, at fair value
|
$
|
1,219,903,501
|
Multi-Family
Securitized Debt Obligations (non-recourse)
|
$
|
(1,200,261,830)
|
Net Carrying
Value
|
$
|
19,641,671
|
Multi-Family MBS
PO
|
$
|
35,810,200
|
Cash and
Other
|
$
|
63,028
|
Repurchase
Agreements
|
$
|
(20,362,000)
|
Net Capital in
Multi-Family
|
$
|
35,152,899
|
As of March 31, 2017, we have
determined that we were the primary beneficiary of one prime jumbo
residential mortgage securitization trust, CSMC 2014-OAK1. As a
result, we are required to consolidate the trusts' underlying prime
jumbo residential loans together with their liabilities, income and
expenses in our consolidated financial statements. We have elected
the fair value option on the assets and liabilities held within the
trusts, which requires that changes in valuation in the assets and
liabilities of the trusts be reflected in our consolidated
statements of operations.
A reconciliation of our net capital investment in Non-Agency
RMBS to our financial statements as of March
31, 2017 is set forth below:
Residential Loans
held in Securitization Trusts, at fair value (1)
|
$
|
131,769,523
|
Residential
Securitized Debt Obligations (non-recourse)
|
$
|
(126,891,835)
|
Net Carrying
Value
|
$
|
4,877,688
|
Non-Agency
RMBS
|
$
|
-
|
Cash and
Other
|
$
|
58,632
|
Repurchase
Agreements
|
$
|
(2,151,000)
|
Net Capital in
Non-Agency
|
$
|
2,785,320
|
|
(1) Excludes
$1,128,790 in Mortgage Servicing
Rights
|
Five Oaks Investment Corp.
Five Oaks Investment Corp. is a real estate investment trust
("REIT") focused with its subsidiaries on investing on a leveraged
basis in mortgage and other real estate-related assets,
particularly mortgage-backed securities ("MBS"), including
residential mortgage-backed securities ("RMBS") and multi-family
mortgage-backed securities ("Multi-Family MBS"), and mortgage
servicing rights. The Company's objective remains to deliver
attractive cash flow returns over time to its investors, primarily
through dividends and secondarily through capital
appreciation. Five Oaks Investment Corp. is externally managed
and advised by Oak Circle Capital Partners LLC.
Additional Information and Where to Find It
Investors, security holders and other interested persons may
find additional information regarding the Company at the SEC's
Internet site at http://www.sec.gov/ or the Company website
www.fiveoaksinvestment.com or by directing requests to: Five Oaks
Investment Corp., 540 Madison Avenue, 19 th Floor,
New York, NY 10022, Attention:
Investor Relations.
FIVE OAKS
INVESTMENT CORP. AND SUBSIDIARIES
|
Condensed
Consolidated Balance Sheets
|
|
|
|
March 31, 2017
(1)
|
|
December 31, 2016
(1)
|
|
(unaudited)
|
|
|
ASSETS
|
|
|
|
|
|
Available-for-sale
securities, at fair value (includes pledged securities of
$1,040,598,558 and $876,121,505 for
|
|
|
|
|
|
March 31, 2017 and
December 31, 2016, respectively)
|
$
|
1,035,720,870
|
|
$
|
870,929,601
|
Mortgage loans
held-for-sale, at fair value
|
|
2,822,751
|
|
|
2,849,536
|
Multi-family loans
held in securitization trusts, at fair value
|
|
1,215,157,038
|
|
|
1,222,905,433
|
Residential loans
held in securitization trusts, at fair value
|
|
132,454,523
|
|
|
141,126,720
|
Mortgage servicing
rights, at fair value
|
|
3,314,363
|
|
|
3,440,809
|
Cash and cash
equivalents
|
|
32,713,356
|
|
|
27,534,374
|
Restricted
cash
|
|
7,693,120
|
|
|
10,355,222
|
Deferred offering
costs
|
|
96,532
|
|
|
96,489
|
Accrued interest
receivable
|
|
8,078,915
|
|
|
7,619,717
|
Investment related
receivable
|
|
2,193,766
|
|
|
3,914,458
|
Derivative assets, at
fair value
|
|
4,976,938
|
|
|
8,053,813
|
Other
assets
|
|
724,267
|
|
|
775,031
|
|
|
|
|
|
|
Total
assets
|
$
|
2,445,946,439
|
|
$
|
2,299,601,203
|
|
|
|
|
|
|
LIABILITIES:
|
|
|
|
|
|
Repurchase
agreements:
|
|
|
|
|
|
Available-for-sale
securities
|
$
|
971,225,000
|
|
$
|
804,811,000
|
Multi-family
securitized debt obligations
|
|
1,195,536,818
|
|
|
1,204,583,678
|
Residential
securitized debt obligations
|
|
126,535,978
|
|
|
134,846,348
|
Accrued interest
payable
|
|
5,534,935
|
|
|
5,467,916
|
Dividends
payable
|
|
39,132
|
|
|
39,132
|
Deferred
income
|
|
200,534
|
|
|
203,743
|
Due to
broker
|
|
915,590
|
|
|
4,244,678
|
Fees and expenses
payable to Manager
|
|
709,000
|
|
|
880,000
|
Other accounts
payable and accrued expenses
|
|
376,632
|
|
|
2,057,843
|
|
|
|
|
|
|
Total
liabilities
|
|
2,301,073,619
|
|
|
2,157,134,338
|
|
|
|
|
|
|
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 March 31,
|
|
|
|
|
|
2017 and December 31,
2016, respectively
|
|
37,156,972
|
|
|
37,156,972
|
Common Stock: par
value $0.01 per share; 450,000,000 shares authorized, 17,539,258
and 17,539,258
|
|
|
|
|
|
shares issued and
outstanding, at March 31, 2017 and December 31, 2016,
respectively
|
|
175,348
|
|
|
175,348
|
Additional paid-in
capital
|
|
204,262,178
|
|
|
204,264,868
|
Accumulated other
comprehensive income (loss)
|
|
(5,717,728)
|
|
|
(9,268,630)
|
Cumulative
distributions to stockholders
|
|
(92,735,592)
|
|
|
(89,224,194)
|
Accumulated earnings
(deficit)
|
|
1,731,642
|
|
|
(637,499)
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
144,872,820
|
|
|
142,466,865
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
2,445,946,439
|
|
$
|
2,299,601,203
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Our
consolidated balance sheets include assets and liabilities of
consolidated variable interest entities ("VIE's) as the Company is
the primary beneficiary
|
of these
VIEs. As of March 31, 2017 and December 31, 2016, assets of
consolidated VIEs totaled $1,352,797,965 and $1,369,120,941,
respectively, and the
|
liabilities of
consolidated VIEs totaled $1,327,149,816 and $1,344,404,080,
respectively
|
FIVE OAKS
INVESTMENT CORP. AND SUBSIDIARIES
|
Condensed
Consolidated Statements of Operations
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
Interest
income:
|
|
|
|
|
|
Available-for-sale
securities
|
$
|
6,822,622
|
|
$
|
4,899,038
|
Mortgage loans
held-for-sale
|
|
28,763
|
|
|
122,237
|
Multi-family loans
held in securitization trusts
|
|
13,948,754
|
|
|
15,437,804
|
Residential loans held
in securitization trusts
|
|
1,355,438
|
|
|
4,152,406
|
Cash and cash
equivalents
|
|
35,734
|
|
|
5,710
|
Interest
expense:
|
|
|
|
|
|
Repurchase agreements
- available-for-sale securities
|
|
(2,095,474)
|
|
|
(1,489,413)
|
Repurchase agreements
- mortgage loans held-for-sale
|
|
-
|
|
|
(76,200)
|
Multi-family
securitized debt obligations
|
|
(13,237,724)
|
|
|
(14,112,709)
|
Residential
securitized debt obligations
|
|
(1,074,352)
|
|
|
(3,178,442)
|
|
|
|
|
|
|
Net interest
income
|
|
5,783,761
|
|
|
5,760,431
|
|
|
|
|
|
|
Other-than-temporary impairments
|
|
|
|
|
|
Increase in credit
reserves
|
|
-
|
|
|
(20,994)
|
Additional
other-than-temporary credit impairment losses
|
|
-
|
|
|
-
|
|
|
|
|
|
|
Total impairment
losses recognized in earnings
|
|
-
|
|
|
(20,994)
|
|
|
|
|
|
|
Other
income:
|
|
|
|
|
|
Realized gain (loss)
on sale of investments, net
|
|
(9,317,003)
|
|
|
(6,383,153)
|
Change in unrealized
gain (loss) on fair value option securities
|
|
9,448,270
|
|
|
(371,095)
|
Realized gain (loss)
on derivative contracts, net
|
|
2,233,051
|
|
|
(1,585,541)
|
Change in unrealized
gain (loss) on derivative contracts, net
|
|
(3,077,088)
|
|
|
(8,462,400)
|
Realized gain (loss)
on mortgage loans held-for-sale
|
|
(174)
|
|
|
(986)
|
Change in unrealized
gain (loss) on mortgage loans held-for-sale
|
|
(3,709)
|
|
|
197,902
|
Change in unrealized
gain (loss) on mortgage servicing rights
|
|
(126,446)
|
|
|
(900,288)
|
Change in unrealized
gain (loss) on multi-family loans held in securitization
trusts
|
|
1,299,630
|
|
|
1,536,317
|
Change in unrealized
gain (loss) on residential loans held in securitization
trusts
|
|
(368,343)
|
|
|
(2,554,077)
|
Other interest
expense
|
|
(152,322)
|
|
|
-
|
Servicing
income
|
|
252,738
|
|
|
223,678
|
Other
income
|
|
12,171
|
|
|
24,982
|
|
|
|
|
|
|
Total other income
(loss)
|
|
200,775
|
|
|
(18,274,661)
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
Management
fee
|
|
544,510
|
|
|
623,223
|
General and
administrative expenses
|
|
1,588,572
|
|
|
1,632,511
|
Operating expenses
reimbursable to Manager
|
|
1,208,943
|
|
|
1,204,811
|
Other operating
expenses
|
|
220,496
|
|
|
882,206
|
Compensation
expense
|
|
52,874
|
|
|
69,639
|
|
|
|
|
|
|
Total
expenses
|
|
3,615,395
|
|
|
4,412,390
|
|
|
|
|
|
|
Net income
(loss)
|
|
2,369,141
|
|
|
(16,947,614)
|
|
|
|
|
|
|
Dividends to preferred
stockholders
|
|
(880,509)
|
|
|
(880,509)
|
|
|
|
|
|
|
Net income (loss)
attributable to common stockholders
|
$
|
1,488,632
|
|
$
|
(17,828,123)
|
|
|
|
|
|
|
Earnings (loss) per
share:
|
|
|
|
|
|
Net income (loss)
attributable to common stockholders (basic and diluted)
|
$
|
1,488,632
|
|
$
|
(17,828,123)
|
Weighted average
number of shares of common stock outstanding
|
|
17,539,258
|
|
|
14,605,515
|
Basic and diluted
income (loss) per share
|
$
|
0.08
|
|
$
|
(1.22)
|
Dividends declared per
share of common stock
|
$
|
0.15
|
|
$
|
0.18
|
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SOURCE Five Oaks Investment Corp.