NEW YORK, Nov. 6, 2017 /PRNewswire/ -- Five Oaks
Investment Corp. (NYSE: OAKS) ("we", "Five Oaks" or "the
Company") today announced its financial results for the third
quarter ended September 30, 2017. For
the third quarter, the Company reported GAAP net loss attributable
to common shareholders of $5.1
million, or $0.23 per basic
and diluted share, a comprehensive loss of $2.9 million, or $0.13 per basic and diluted share, and core
earnings (1) of $2.4
million, or $0.11 per basic
and diluted share. The Company also reported a net book value of
$5.12 per share on a basic and
diluted basis at September 30,
2017.
Third Quarter Summary
- We reported an economic loss on common equity of 2.59% (10.35%
annualized), comprised of a $0.29
decrease in book value per share and a $0.15 dividend per common share(2).
The decrease in book value was due to increased financing costs
during the quarter which contracted our net interest margin,
continued wider spreads on Agency hybrid ARM securities relative to
15 and 30-year collateral, contributing to unrealized losses on our
investment portfolio and realized losses on our hedge
portfolio.
- During the quarter, we rotated out of $416.0 million of seasoned shorter duration
Agency ARMs and into $513.6 million
of new issue longer duration Agency ARMs. This rotation allowed us
to increase the yield of the Agency portfolio from 2.34% as at
second quarter period end to 2.47% as at third quarter period end
by replacing the lower yielding seasoned Agency ARMs with new issue
higher yielding Agency ARMs which we anticipate should benefit our
net interest income in future quarters.
(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:
"In the third quarter the yield curve again flattened as
short-term interest rates adjusted to the Fed's June tightening,
and growing expectations of another rate increase later this
year. While market expectations contemplate up to three
additional rate hikes over the next year, it remains unclear how
high the Fed can raise short-term interest rates while also
pursuing a non-traditional policy of balance sheet tapering.
We believe that we may be closer to the end of the traditional
rate-hiking cycle given continued subdued inflation, but economic
data and rate movements since the end of the third quarter are
suggestive of continued and perhaps strengthening economic
momentum. Longer term, a market in which the Federal Reserve
is reducing its purchases of both treasuries and mortgages should
be an attractive one for buying and leveraging hybrid agency
securities.
"Shorter term, however, in a flatter yield curve environment,
hybrid agencies tend to underperform 15 and 30-year fixed-rate
mortgages. This was evident in the third quarter, with hybrid
agency spreads widening slightly, while fixed-rate mortgages
tightened. This was a contributory factor in our third
quarter book value decline, along with realized hedging losses, and
the reduction in net interest income due to higher financing rates,
which meant that we under-earned our dividend in the quarter.
In addition, we rotated out of over $400
million of assets that had rolled down the curve, and
invested in over $500 million of
longer-duration new issue hybrid agencies at higher yields.
This had limited impact on our Q3 results since it was effected
close to the end of the quarter, but should boost earnings going
forward. We continue to believe that an investment strategy
focused on Agency hybrid ARMs should provide both attractive yield
and positive price "roll" down the curve along with enhanced
extension protection over a full interest rate cycle."
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 September 30, 2017:
|
For the period
ended
September 30,
2017
|
Agency
MBS
|
Multi-Family MBS
(1)(2)
|
Non-Agency
RMBS (1)(2)
|
Residential Loans
(3)
|
Unrestricted
Cash (4)
|
Total
|
|
Amortized
Cost
|
1,276,657,015
|
47,026,522
|
11,063,920
|
5,447,024
|
30,554,867
|
1,370,749,348
|
|
Market
Value
|
1,273,735,621
|
51,889,718
|
4,575,603
|
4,515,027
|
30,554,867
|
1,365,270,836
|
|
Repurchase
Agreements
|
(1,215,217,000)
|
(19,694,000)
|
(2,750,000)
|
-
|
-
|
(1,237,661,000)
|
|
Hedges
|
(529,075)
|
-
|
-
|
-
|
-
|
(529,075)
|
|
Other
(5)
|
8,098,103
|
(29,483)
|
51,804
|
3,610
|
(103,472)
|
8,020,562
|
|
Restricted Cash
and Due to Broker
|
15,437,341
|
-
|
-
|
-
|
-
|
15,437,341
|
|
Equity
Allocated
|
81,524,990
|
32,166,235
|
1,877,407
|
4,518,637
|
30,451,395
|
150,538,664
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt/Net Equity
(6)
|
14.91
|
0.61
|
1.46
|
-
|
-
|
8.22
|
|
|
|
|
|
|
|
|
For the period
ended
September 30,
2017
|
Agency
MBS
|
Multi-Family
MBS
|
Non-Agency
RMBS
|
Residential
Loans
(7)
|
Unrestricted
Cash
|
Total
|
|
Yield on Earning
Assets (8)
|
2.39%
|
10.35%
|
-0.73%
|
116.13%
|
-
|
2.72%
|
|
Less Cost of
Funds
|
1.28%
|
1.17%
|
1.27%
|
-
|
-
|
1.28%
|
|
Net Interest
Margin (9)
|
1.11%
|
9.18%
|
-2.00%
|
116.13%
|
-
|
1.44%
|
|
|
|
(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 $30,750,419.
|
|
(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 2.54%.
|
|
(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 September 30, 2017 and
June 30, 2017 (percentages are
annualized):
|
Expenses
|
For the quarter
ended
September 30,
2017
|
|
For the quarter
ended
June 30,
2017
|
|
|
|
|
|
Management
Fees
|
$
573,412
|
|
$
552,882
|
|
G&A Expenses
(1)
|
$
609,806
|
|
$
596,921
|
|
Operating Expenses
Reimbursable to Manager
|
$
915,452
|
|
$
961,909
|
|
Other Operating
Expenses
|
$
225,502
|
|
$
324,191
|
|
Compensation
Expense
|
$
49,562
|
|
$
52,948
|
|
Total
Expenses
|
$
2,373,734
|
|
$
2,488,851
|
|
|
|
|
|
Period-End
Capital
|
$
150,538,664
|
|
$
156,881,865
|
|
|
|
|
|
Management
Fees
|
$
573,412
|
|
$
552,882
|
|
G&A, Other
Operating Expenses and Reimbursable
|
$
1,608,438
|
|
$
1,727,631
|
|
Compensation
Expenses
|
$
49,562
|
|
$
52,948
|
|
Expenses related to
Prime Jumbo Loans
|
$
142,322
|
|
$
155,391
|
|
|
|
|
|
Management Fees as %
of Capital
|
1.52%
|
|
1.41%
|
|
G&A, Other,
Reimbursable and Compensation as % of Capital
|
4.41%
|
|
4.54%
|
|
Expenses related to
Prime Jumbo Loans as % of Capital
|
0.38%
|
|
0.40%
|
|
|
|
|
|
|
(1) Excludes $679,172
and $646,336 in non-interest expense attributable to the
consolidated trusts for the quarters ended September 30, 2017 and
June 30, 2017, respectively.
|
Operating Performance
The following table summarizes the Company's GAAP and non-GAAP
earnings measurements for the quarters ended September 30, 2017 and June 30, 2017:
|
Quarter Ended
September 30, 2017
|
Quarter Ended June
30, 2017
|
|
|
|
|
Earnings
|
Earnings
|
Per diluted
weighted share
|
Annualized return
on average equity
|
Earnings
|
Per diluted
weighted share
|
Annualized return
on average equity
|
|
Core Earnings
*
|
$
2,354,565
|
$
0.11
|
4.16%
|
$
2,204,417
|
$
0.12
|
4.25%
|
|
GAAP Net Income
(Loss)
|
$
(5,136,846)
|
$
(0.23)
|
(9.08)%
|
$
(3,167,297)
|
$
(0.17)
|
(6.11)%
|
|
Comprehensive Income
(Loss)
|
$
(2,949,798)
|
$
(0.13)
|
(5.22)%
|
$
(5,297,716)
|
$
(0.29)
|
(10.19)%
|
|
Weighted Ave Shares
Outstanding
|
|
22,139,258
|
|
|
18,297,500
|
|
|
Weighted Average
Equity
|
|
$224,407,206
|
|
|
$207,801,363
|
|
Stockholders' Equity and Book Value Per Share
As of September 30, 2017, our
stockholders' equity was $150.5
million and our book value per common share was $5.12 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
October, September and December
2017.
Fourth Quarter 2017 Common Stock Dividends
|
Month
|
Dividend
|
Record
Date
|
Payment
Date
|
|
|
|
|
|
October
2017
|
$0.05
|
October 16,
2017
|
October 30,
2017
|
|
|
|
|
|
November
2017
|
$0.05
|
November 15,
2017
|
November 29,
2017
|
|
|
|
|
|
December
2017
|
$0.05
|
December 15,
2017
|
December 28,
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 fourth quarter of 2017 of $0.1823 per share of Series A Preferred
Stock:
Fourth Quarter 2017 Series A Preferred Stock
Dividends
|
Month
|
Dividend
|
Record
Date
|
Payment
Date
|
|
|
|
|
|
October
2017
|
$0.1823
|
October 16,
2017
|
October 27,
2017
|
|
|
|
|
|
November
2017
|
$0.1823
|
November 15,
2017
|
November 27,
2017
|
|
|
|
|
|
December
2017
|
$0.1823
|
December 15,
2017
|
December 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 September 30, 2017 and June 30, 2017 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
|
|
|
|
|
September 30,
2017
|
June 30,
2017
|
|
Reconciliation of
GAAP to non-GAAP Information
|
|
|
|
Net Income (loss)
attributable to common shareholders
|
$
|
(5,136,846)
|
$
|
(3,167,297)
|
|
Adjustments for
non-core earnings
|
|
|
|
Realized (Gain) Loss
on sale of investments, net
|
$
|
5,148,445
|
$
|
151,549
|
|
Unrealized (Gain)
Loss on fair value option securities
|
$
|
-
|
$
|
-
|
|
Realized (Gain) Loss
on derivative contracts, net
|
$
|
1,636,725
|
$
|
(1,453,074)
|
|
Unrealized (Gain)
Loss on derivative contracts, net
|
$
|
(307,263)
|
$
|
5,813,275
|
|
Realized (Gain) Loss
on mortgage loans held-for-sale
|
$
|
221,197
|
$
|
249
|
|
Unrealized (Gain)
Loss on mortgage loans held-for-sale
|
$
|
(28,794)
|
$
|
7,358
|
|
Unrealized (Gain)
Loss on mortgage servicing rights
|
$
|
102,945
|
$
|
228,329
|
|
Unrealized (Gain)
Loss on multi-family loans held in securitization trusts
|
$
|
(694,730)
|
$
|
(803,206)
|
|
Unrealized (Gain)
Loss on residential loans held in securitization trusts
|
$
|
155,252
|
$
|
250,079
|
|
Other
income
|
$
|
(8,369)
|
$
|
(12,735)
|
|
Subtotal
|
$
|
6,225,408
|
$
|
4,181,824
|
|
|
Other
Adjustments
|
|
|
|
|
|
Recognized
compensation expense related to restricted common
stock
|
$
|
3,312
|
$
|
6,698
|
|
Adjustment for
consolidated securities/securitization costs
|
$
|
1,262,691
|
$
|
1,183,192
|
|
Adjustment for
one-time charges
|
$
|
-
|
$
|
-
|
|
Core
Earnings
|
$
|
2,354,565
|
$
|
2,204,417
|
|
|
Weighted average
shares outstanding - Basic and Diluted
|
|
22,139,258
|
|
18,297,500
|
|
|
Core Earnings per
weighted average shares outstanding - Basic and Diluted
|
$
|
0.11
|
$
|
0.12
|
Additional Information
As of September 30, 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 September 30, 2017 is set forth below:
|
Multi-Family Loans
held in Securitization Trusts, at fair value (1)
|
$
|
1,154,277,919
|
|
Multi-Family
Securitized Debt Obligations (non-recourse) (2)
|
$
|
(1,133,138,620)
|
|
Net Carrying
Value
|
$
|
21,139,299
|
|
Multi-Family MBS
PO
|
$
|
30,750,419
|
|
Cash and
Other
|
$
|
(29,483)
|
|
Repurchase
Agreements
|
$
|
(19,694,000)
|
|
Net Capital in
Multi-Family
|
$
|
32,166,235
|
|
|
(1)
Includes interest receivable
|
|
(2)
Includes interest payable
|
As of September 30, 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 September 30, 2017 is set forth below:
|
Residential Loans
held in Securitization Trusts, at fair value (1)(2)
|
$
|
124,790,411
|
|
Residential
Securitized Debt Obligations (non-recourse) (3)
|
$
|
(120,214,808)
|
|
Net Carrying
Value
|
$
|
4,575,603
|
|
Non-Agency
RMBS
|
$
|
-
|
|
Cash and
Other
|
$
|
51,804
|
|
Repurchase
Agreements
|
$
|
(2,750,000)
|
|
Net Capital in
Non-Agency
|
$
|
1,877,407
|
|
|
(1)
Excludes $1,025,544 in Mortgage Servicing Rights
|
|
(2)
Includes interest receivable
|
|
(3)
Includes interest
payable
|
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.
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, 19th Floor,
New York, NY 10022, Attention:
Investor Relations.
|
FIVE OAKS
INVESTMENT CORP. AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Statements of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
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|
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|
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|
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|
|
|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Interest
income:
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale
securities
|
$
|
$7,827,281
|
|
$6,549,869
|
|
$21,308,582
|
|
$16,780,701
|
|
|
Mortgage loans
held-for-sale
|
|
12,082
|
|
121,892
|
|
69,416
|
|
411,199
|
|
|
Multi-family loans
held in securitization trusts
|
|
13,473,913
|
|
14,466,946
|
|
40,992,241
|
|
44,597,652
|
|
|
Residential loans
held in securitization trusts
|
|
1,249,966
|
|
1,582,090
|
|
3,903,924
|
|
9,143,343
|
|
|
Cash and cash
equivalents
|
|
63,264
|
|
11,754
|
|
138,745
|
|
26,409
|
|
Interest
expense:
|
|
|
|
|
|
|
|
|
|
|
Repurchase agreements
- available-for-sale securities
|
|
(4,118,639)
|
|
(1,572,062)
|
|
(9,087,956)
|
|
(4,400,290)
|
|
|
Repurchase agreements
- mortgage loans held-for-sale
|
|
-
|
|
(57,449)
|
|
-
|
|
(227,733)
|
|
|
Multi-family
securitized debt obligations
|
|
(12,766,808)
|
|
(13,740,005)
|
|
(38,866,888)
|
|
(41,667,457)
|
|
|
Residential
securitized debt obligations
|
|
(995,293)
|
|
(1,210,186)
|
|
(3,100,616)
|
|
(6,978,474)
|
|
|
Mortgage service
rights
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
|
4,745,766
|
|
6,152,849
|
|
15,357,448
|
|
17,685,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other-than-temporary impairments
|
|
|
|
|
|
|
|
|
|
Increase in credit
reserves
|
|
-
|
|
(374,124)
|
|
-
|
|
(541,342)
|
|
Additional
other-than-temporary credit impairment losses
|
|
-
|
|
(183,790)
|
|
-
|
|
(183,790)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total impairment
losses recognized in earnings
|
|
-
|
|
(557,914)
|
|
-
|
|
(725,132)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income:
|
|
|
|
|
|
|
|
|
|
Realized gain (loss)
on sale of investments, net
|
|
(5,148,445)
|
|
(749,604)
|
|
(14,616,997)
|
|
(3,361,609)
|
|
Change in unrealized
gain (loss) on fair value option securities
|
|
-
|
|
(958,995)
|
|
9,448,270
|
|
(3,569,744)
|
|
Realized gain (loss)
on derivative contracts, net
|
|
(1,636,725)
|
|
(820,974)
|
|
2,049,400
|
|
(3,167,877)
|
|
Change in unrealized
gain (loss) on derivative contracts, net
|
|
307,263
|
|
3,340,600
|
|
(8,583,100)
|
|
(7,172,338)
|
|
Realized gain (loss)
on mortgage loans held-for-sale
|
|
(221,197)
|
|
60,427
|
|
(221,620)
|
|
129,175
|
|
Change in unrealized
gain (loss) on mortgage loans held-for-sale
|
|
28,794
|
|
(138,785)
|
|
17,727
|
|
(2,885)
|
|
Change in unrealized
gain (loss) on mortgage servicing rights
|
|
(102,945)
|
|
(204,505)
|
|
(457,720)
|
|
(1,243,240)
|
|
Change in unrealized
gain (loss) on multi-family loans held in securitization
trusts
|
|
694,730
|
|
930,312
|
|
2,797,566
|
|
(5,604,839)
|
|
Change in unrealized
gain (loss) on residential loans held in securitization
trusts
|
|
(155,252)
|
|
(764,599)
|
|
(773,674)
|
|
80,511
|
|
Other interest
expense
|
|
-
|
|
(1,860,000)
|
|
(152,322)
|
|
(1,860,000)
|
|
Servicing
income
|
|
276,211
|
|
258,458
|
|
721,468
|
|
726,011
|
|
Other
income
|
|
8,369
|
|
3
|
|
33,275
|
|
26,811
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other income
(loss)
|
|
(5,949,197)
|
|
(907,662)
|
|
(9,737,727)
|
|
(25,020,024)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
Management
fee
|
|
573,412
|
|
623,525
|
|
1,670,804
|
|
1,873,486
|
|
General and
administrative expenses
|
|
1,288,978
|
|
1,171,421
|
|
4,120,807
|
|
4,483,064
|
|
Operating expenses
reimbursable to Manager
|
|
915,452
|
|
1,184,391
|
|
3,086,304
|
|
3,573,445
|
|
Other operating
expenses
|
|
225,502
|
|
161,036
|
|
770,189
|
|
1,393,303
|
|
Compensation
expense
|
|
49,562
|
|
50,544
|
|
155,384
|
|
144,431
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
expenses
|
|
3,052,906
|
|
3,190,917
|
|
9,803,488
|
|
11,467,729
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
(4,256,337)
|
|
1,496,356
|
|
(4,183,767)
|
|
(19,527,535)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends to
preferred stockholders
|
|
(880,509)
|
|
(880,509)
|
|
(2,631,744)
|
|
(2,631,744)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to common stockholders
|
$
|
(5,136,846)
|
$
|
615,847
|
|
(6,815,511)
|
|
(22,159,279)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share:
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to common stockholders (basic and diluted)
|
$
|
(5,136,846)
|
$
|
615,847
|
|
(6,815,511)
|
|
(22,159,279)
|
|
|
|
Weighted average
number of shares of common stock outstanding
|
|
22,139,258
|
|
14,600,193
|
|
19,342,188
|
|
14,601,306
|
|
|
|
Basic and diluted
income (loss) per share
|
$
|
(0.23)
|
$
|
0.04
|
|
(0.35)
|
|
(1.52)
|
|
|
Dividends declared
per share of common stock
|
$
|
0.15
|
$
|
0.18
|
|
0.45
|
|
0.54
|
|
FIVE OAKS
INVESTMENT CORP. AND SUBSIDIARIES
|
|
|
|
|
|
Condensed
Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2017
(1)
|
|
December 31, 2016
(1)
|
|
|
|
|
(unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
Available-for-sale
securities, at fair value (includes pledged securities of
$1,212,027,963 and $876,121,505 for
|
|
|
|
|
|
September 30, 2017 and
December 31, 2016, respectively)
|
$
|
$1,304,486,040
|
$
|
$870,929,601
|
|
Mortgage loans
held-for-sale, at fair value
|
|
495,486
|
|
2,849,536
|
|
Multi-family loans
held in securitization trusts, at fair value
|
|
1,149,888,917
|
|
1,222,905,433
|
|
Residential loans
held in securitization trusts, at fair value
|
|
125,403,499
|
|
141,126,720
|
|
Mortgage servicing
rights, at fair value
|
|
2,993,997
|
|
3,440,809
|
|
Cash and cash
equivalents
|
|
30,554,867
|
|
27,534,374
|
|
Restricted
cash
|
|
15,437,341
|
|
10,355,222
|
|
Deferred offering
costs
|
|
78,432
|
|
96,489
|
|
Accrued interest
receivable
|
|
8,732,428
|
|
7,619,717
|
|
Investment related
receivable
|
|
4,699,021
|
|
3,914,458
|
|
Derivative assets, at
fair value
|
|
-
|
|
8,053,813
|
|
Other
assets
|
|
912,719
|
|
775,031
|
|
|
|
|
|
|
|
|
|
Total
assets
|
$
|
2,643,682,747
|
$
|
2,299,601,203
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES:
|
|
|
|
|
|
Repurchase
agreements:
|
|
|
|
|
|
Available-for-sale
securities
|
$
|
$1,237,661,000
|
$
|
$804,811,000
|
|
Multi-family
securitized debt obligations
|
|
1,128,773,402
|
|
1,204,583,678
|
|
Residential
securitized debt obligations
|
|
119,882,464
|
|
134,846,348
|
|
Accrued interest
payable
|
|
5,205,165
|
|
5,467,916
|
|
Derivative
liabilities at fair value
|
|
529,075
|
|
-
|
|
Dividends
payable
|
|
29,349
|
|
39,132
|
|
Deferred
income
|
|
202,896
|
|
203,743
|
|
Due to
broker
|
|
-
|
|
4,244,678
|
|
Fees and expenses
payable to Manager
|
|
587,000
|
|
880,000
|
|
Other accounts
payable and accrued expenses
|
|
273,732
|
|
2,057,843
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
2,493,144,083
|
|
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
September 30,
|
|
|
|
|
|
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, 22,139,258
and 17,539,258
|
|
|
|
|
|
shares issued and
outstanding, at September 30, 2017 and December 31, 2016,
respectively
|
|
221,393
|
|
175,348
|
|
Additional paid-in
capital
|
|
224,063,268
|
|
204,264,868
|
|
Accumulated other
comprehensive income (loss)
|
|
(5,643,099)
|
|
(9,268,630)
|
|
Cumulative
distributions to stockholders
|
|
(100,438,604)
|
|
(89,224,194)
|
|
Accumulated earnings
(deficit)
|
|
(4,821,266)
|
|
(637,499)
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
150,538,664
|
|
142,466,865
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
2,643,682,747
|
$
|
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
September 30, 2017 and December 31, 2016, assets of consolidated
VIEs totaled $1,280,093,874 and $1,369,120,941,
respectively,
and the liabilities of
consolidated VIEs totaled $1,253,353,428 and $1,344,404,080,
respectively
|
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SOURCE Five Oaks Investment Corp.