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| Walter Investment Management Corp. Announces First Quarter 2010 Financial Results |
TAMPA, Fla., May 5, 2010 /PRNewswire via COMTEX/ --Walter Investment Management Corp. (NYSE Amex: WAC) ("Walter Investment" or the "Company") today announced results for the quarter ended March 31, 2010. The Company reported income before income taxes for the quarter ended March 31, 2010 of $8.2 million, or $0.31 per diluted share as compared to income before income taxes for the fourth quarter 2009 of $8.1 million, or $0.32 per diluted share. Net income for the first quarter of 2010 was $8.1 million, or $0.30 per diluted share as compared to net income for the fourth quarter 2009 of $8.5 million, or $0.34 per diluted share. Mark J. O'Brien, Walter Investment's Chairman and CEO, said, "We are pleased with the strong results from our existing portfolio, and are confident we are on a path to grow our core business as we begin to deploy the capital raised in the fourth quarter of 2009." "We believe the opportunities to acquire attractive loan pools are improving, as evidenced by our recently announced purchase of performing residential loans. We remain committed to prudently deploying our capital to acquire assets which meet our investment criteria and return objectives." First Quarter 2010 Dividend Declaration On April 30, 2010, the Board of Directors of the Company declared a dividend of $0.50 per share to shareholders of record as of May 14, 2010, which will be paid on May 28, 2010. First Quarter 2010 Operating Highlights
Charles E. Cauthen, Walter Investment's President and COO, said, "As anticipated, our field servicing organization delivered excellent results from our existing portfolio in the first quarter, laying a strong foundation for the year ahead. As we add additional assets to our servicing platform, we must continue to deliver superior results and solid returns to our shareholders through our high touch origination and servicing model and our deeply experienced personnel." First Quarter 2010 Financial Summary Net interest income for the quarter was $20.4 million as compared to $22.7 million in the year-ago period driven by lower outstanding balances and lower voluntary prepayment speeds. The provision for loan losses was $3.2 million, compared with $4.4 million in the year ago period. The decrease from the year earlier period was primarily driven by improved loss severities, coupled with a lower frequency of default on the ARM portfolio. Non-interest income was $3.5 million in the first quarter of 2010 as compared to $3.2 million in the prior year period. Non-interest expenses increased from $10.2 million in the first quarter of 2009 to $12.4 million for the first quarter of 2010. The increase included $1.2 million of stock compensation expense and $0.7 million of severance expense associated with management changes, in addition to increased costs associated with being a stand-alone public company, including salaries and benefits, legal, professional, technology and communications costs. First Quarter 2010 Liquidity Summary At March 31, 2010, the Company had $96.3 million of cash. The Company had no borrowings under its $15 million revolving credit facility at March 31, 2010. Purchase of Pool of Loans On April 14, 2010, the Company entered into a definitive agreement to purchase a pool of 100% performing, fixed-rate residential loans on single-family, owner occupied residences located within the Company's existing southeastern United States geographic footprint. The purchase closed on April 19, 2010, utilizing $11.1 million of proceeds from its equity offering. Conference Call Webcast Members of the Company's leadership team will discuss Walter Investment's first quarter results and other general business matters during a conference call and live webcast to be held on Thursday, May 6, 2010, at 10 a.m. Eastern Time. To listen to the event live or in an archive which will be available for 30 days, visit the Company's website at www.walterinvestment.com. About Walter Investment Management Corp. Walter Investment Management Corp. is an asset manager, mortgage servicer and mortgage portfolio owner specializing in less-than-prime, non-conforming and other credit-challenged mortgage assets. Based in Tampa, Fla., the Company currently has $1.9 billion of assets under management and annual revenues of approximately $190 million. The Company is structured as a real estate investment trust ("REIT") and employs approximately 220 people. For more information about Walter Investment Management Corp., please visit the Company's website at www.walterinvestment.com. Safe Harbor Statement Certain statements in this release and in our public documents to which we refer, contain or incorporate by reference "forward-looking" statements as defined in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Walter Investment Management Corp. is including this cautionary statement to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements that are not historical fact are forward-looking statements. Words such as "expect," "believe," "anticipate," "project," "estimate," "forecast," "objective," "plan," "goal" and similar expressions are intended to identify forward looking statements. Forward-looking statements are based on the Company's current belief, intentions and expectations; however, forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause actual results, performance or achievements, to differ materially from those reflected in the statements made or incorporated in this release. Thus, these forward-looking statements are not guarantees of future performance and should not be relied upon as predictions of future events. These risks and uncertainties are contained in Walter Investment Management Corp.'s Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on March 2, 2010 and Walter Investment Management Corp.'s other filings with the SEC. All forward looking statements set forth herein are qualified by this cautionary statement and are made only as of May 5, 2010. The Company undertakes no obligation to update or revise the information contained herein, including without limitation any forward-looking statements whether as a result of new information, subsequent events or circumstances, or otherwise, unless otherwise required by law.
Walter Investment Management Corp. and Subsidiaries
Consolidated Statements of Income
(dollars in thousands, except share and per share amounts)
For the Three Months Ended
March 31,
---------
2010 2009
---- ----
Net interest income:
Interest income $41,628 $45,829
Less: Interest expense 21,274 23,089
------ ------
Total net interest income 20,354 22,740
Less: Provision for loan losses 3,190 4,376
----- -----
Total net interest income after
provision for loan losses 17,164 18,364
Non-interest income:
Premium revenue 2,691 3,065
Other income, net 760 160
--- ---
Total non-interest income 3,451 3,225
Non-interest expenses:
Claims expense 912 1,289
Salaries and benefits 6,981 4,285
Legal and professional 899 704
Occupancy 345 335
Technology and communication 728 818
Depreciation and amortization 91 78
General and administrative 2,365 1,533
Other expense 51 337
Related party -allocated corporate
charges - 853
--- ---
Total non-interest expenses 12,372 10,232
Income before income taxes 8,243 11,357
Income tax expense 131 4,155
--- -----
Net income $8,112 $7,202
====== ======
Basic earnings per common and
common equivalent share $0.30 $0.36
Diluted earnings per common and
common equivalent share $0.30 $0.36
Weighted average common and common
equivalent shares outstanding -
basic 26,343,279 19,871,205
Weighted average common and common
equivalent shares outstanding -
diluted 26,403,281 19,871,205
Walter Investment Management Corp. and Subsidiaries
Consolidated Balance Sheets
(dollars in thousands, except share amounts)
March 31, December 31,
2010 2009
---- ----
ASSETS
Cash and cash equivalents $96,302 $99,286
Restricted cash 8,901 8,963
Restricted cash of securitization
trusts 41,324 42,691
Receivables, net 3,542 3,052
Residential loans, net of allowance
for loan losses of $3,384 and
$3,460, respectively 327,775 333,636
Residential loans of securitization
trusts, net of allowance for loan
losses of $13,940 and $14,201,
respectively 1,292,561 1,310,710
Subordinate security 1,837 1,801
Real estate owned 25,284 21,981
Real estate owned of securitization
trusts 36,667 41,143
Deferred debt issuance costs 18,137 18,450
Other assets 5,073 5,961
Total assets $1,857,403 $1,887,674
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $477 $13,489
Accounts payable of securitization
trusts 555 556
Accrued expenses 25,438 28,296
Deferred income taxes, net 161 173
Mortgage-backed debt of
securitization trusts 1,244,379 1,267,454
Accrued interest of securitization
trusts 8,555 8,755
Other liabilities 776 767
1,280,341 1,319,490
Total liabilities --------- ---------
Stockholders' equity:
Preferred stock, $0.01 par value per
share: - -
Authorized - 10,000,000 shares
Issued and outstanding -0 shares at
March 31, 2010
and December 31, 2009, respectively
Common stock, $0.01 par value per
share: 257 256
Authorized - 90,000,000 shares
Issued and outstanding -25,694,073
and 25,642,889 shares
at March 31, 2010 and December 31,
2009, respectively
Additional paid-in capital 123,471 122,552
Retained earnings 451,545 443,433
Accumulated other comprehensive
income 1,789 1,943
----- -----
Total stockholders' equity 577,062 568,184
------- -------
Total liabilities and stockholders'
equity $1,857,403 $1,887,674
========== ==========
Walter Investment Management Corp. and Subsidiaries
Operating Statistics
(Unaudited)
(dollars in thousands, except share amounts)
2010 2009 2009
Q1 Q4 Q1
--- --- ---
30+ Delinquencies (1) 4.21% 5.44% 4.59%
90+ Delinquencies (1) 2.89% 3.37% 3.02%
Provision for Losses $3.2 $4.0 $4.4
Net Charge-offs $3.5 $4.1 $4.9
Charge-off Ratio (2) 0.86% 0.98% 1.10%
Allowance for Losses $17.3 $17.7 $18.5
Allowance for Losses Ratio (3) 1.06% 1.06% 1.05%
30+ Delinquencies (1) $75.4 $98.7 $86.2
REO (Real Estate Owned) 62.0 63.1 50.9
TIO (Taxes, Insurance, Escrow and
Other Advances) 16.4 16.3 15.0
---- ---- ----
Nonperforming Assets (Delinquencies
+ REO + TIO) $153.8 $178.1 $152.1
Nonperforming Assets Ratio (4) 8.24% 9.40% 7.63%
Default Rate (5) 5.68% 6.15% 5.06%
Fixed Rate Mortgages 5.55% 5.84% 4.58%
Adjustable Rate Mortgages 14.64% 27.55% 33.96%
Loss Severity (6) 11.85% 12.08% 16.80%
Fixed Rate Mortgages 10.43% 10.65% 15.50%
Adjustable Rate Mortgages 39.02% 42.42% 40.30%
Number of Accounts Serviced (7) 34,724 35,236 37,408
Total Portfolio (8) $1,867.4 $1,895.2 $1,993.6
ARM Portfolio (9) $25.6 $26.7 $31.8
Prepayment Rate (Voluntary CPR) 2.64% 2.95% 3.56%
Book Value per Share (10) $22.46 $22.16 NM
Debt to Equity Ratio 2.16:1 2.23:1 NM
(1) Delinquencies are defined as the percentage of principal balances
outstanding which have monthly payments over 30 days past due. The
calculation of delinquencies excludes from delinquent amounts those
accounts that are in bankruptcy proceedings that are paying their
mortgage payments in contractual compliance with bankruptcy court
approved mortgage payment obligations.
(2) The charge-off ratio is calculated as annualized net charge-
offs, divided by average residential loans before the allowance for
losses.
(3) The allowance for losses ratio is calculated as period-end
allowance for losses divided by period-end residential loans before
the allowance for losses.
(4) The nonperforming assets ratio is calculated as period-end non-
performing assets, divided by period-end principal balance of
residential loans plus REO and TIO.
(5) Default rate is calculated as the annualized balance of
repossessions for the quarter divided by the average total balance
of the portfolio for the quarter.
(6) Loss severities are calculated as the loss on sale of REO
properties divided by the carrying value of REO.
(7) Includes REO accounts.
(8) Total portfolio includes the principal balance of residential
loans, REO and TIO.
(9) ARM portfolio includes the principal balance of adjustable rate
residential loans and REO resulting from defaulted adjustable rate
residential loans.
(10) Book Value per share is calculated by dividing the Company's
equity by total shares issued and outstanding of 25,694,073.
NM Not Meaningful
SOURCE Walter Investment Management Corp. |
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