Attached files
| file | filename |
|---|---|
| 8-K - ORM 8-K - Owens Realty Mortgage, Inc. | orm8k060214.htm |
| EX-99.2 - EXHIBIT 99.2 - Owens Realty Mortgage, Inc. | exhibit99-2.htm |
| EX-99.3 - EXHIBIT 99.3 - Owens Realty Mortgage, Inc. | exhibit99-3.htm |
| EX-99.1 - EXHIBIT 99.1 - Owens Realty Mortgage, Inc. | exhibit99-1.htm |
For Immediate Release
Contact: Investor Relations
Owens Realty Mortgage, Inc.
www.owensmortgage.com
(925) 239-7001
OWENS REALTY MORTGAGE, INC.
REPORTS THIRD QUARTER 2013 FINANCIAL RESULTS
WALNUT CREEK, CA. – November 14, 2013 – Owens Realty Mortgage, Inc. (NYSE MKT: ORM) today reported financial results for the quarter ended September 30, 2013.
Third Quarter 2013 Highlights
|
·
|
Net income attributable to common stockholders of $701,074, or $0.06 per diluted common share.
|
|
·
|
Book value attributable to common stockholders of $16.56 per common share at September 30, 2013 as compared to $16.53 per common share at June 30, 2013.
|
|
·
|
FFO of $476,000 or $0.04 per diluted common share (see Non-GAAP Financial Measures).
|
|
·
|
Completed the sale of one unit in one commercial real estate property for proceeds of $409,000 and gain of $216,000.
|
|
·
|
Recorded a $420,000 reversal of loan loss reserves.
|
Summary of Third Quarter Financial Results
Net income attributable to common stockholders of the Company was $701,074 or $0.06 per basic and diluted common share for the three months ended September 30, 2013 as compared to net income of $1,114,328 or $0.10 per basic and diluted common share for the corresponding quarter of the prior year. The third quarter 2013 net income attributable to common stockholders includes recognized gain of approximately $252,000 from the sale of one office condominium unit in a real estate owned complex and recognition of deferred gain from a property sold during the second quarter of 2013 and approximately $420,000 from the reversal of the provision for loan losses primarily related to a decrease in the balance of non-delinquent loans on which the historical loss factor is applied to arrive at the general loan loss allowance amount.
Quarter End Loan Portfolio Summary
The following tables set forth certain information regarding the Company’s loan portfolio at September 30, 2013 and December 31, 2012.
|
September 30,
2013
|
December 31,
2012
|
||||||
|
By Property Type:
|
|||||||
|
Commercial
|
$
|
19,318,878
|
$
|
21,884,292
|
|||
|
Residential
|
29,124,575
|
19,199,631
|
|||||
|
Land
|
5,175,503
|
29,178,339
|
|||||
|
$
|
53,618,956
|
$
|
70,262,262
|
||||
|
By Position:
|
|||||||
|
Senior loans
|
$
|
50,198,956
|
$
|
53,544,038
|
|||
|
Junior loans
|
3,420,000
|
16,718,224
|
|||||
|
$
|
53,618,956
|
$
|
70,262,262
|
||||
The types of property securing the Company’s commercial real estate loans are as follows:
|
September 30,
2013
|
December 31,
2012
|
||||||
|
Commercial Real Estate Loans:
|
|||||||
|
Retail
|
$
|
2,740,000
|
$
|
10,290,000
|
|||
|
Assisted care
|
4,021,946
|
4,021,946
|
|||||
|
Office
|
10,044,932
|
3,708,468
|
|||||
|
Industrial
|
1,245,000
|
900,878
|
|||||
|
Marina
|
—
|
1,863,000
|
|||||
|
Golf course
|
1,267,000
|
1,100,000
|
|||||
|
$
|
19,318,878
|
$
|
21,884,292
|
||||
Loans by geographic location:
|
September 30, 2013
|
Portfolio
|
December 31, 2012
|
Portfolio
|
||||||||
|
Balance
|
Percentage
|
Balance
|
Percentage
|
||||||||
|
Arizona
|
$
|
7,535,000
|
14.05%
|
$
|
7,535,000
|
10.72%
|
|||||
|
California
|
34,576,739
|
64.50%
|
52,774,682
|
75.12%
|
|||||||
|
Hawaii
|
1,450,000
|
2.70%
|
—
|
—%
|
|||||||
|
Louisiana
|
1,520,000
|
2.83%
|
1,320,000
|
1.88%
|
|||||||
|
Pennsylvania
|
4,021,946
|
7.50%
|
4,021,946
|
5.72%
|
|||||||
|
Utah
|
2,499,268
|
4.66%
|
2,594,631
|
3.69%
|
|||||||
|
Washington
|
2,016,003
|
3.76%
|
2,016,003
|
2.87%
|
|||||||
|
$
|
53,618,956
|
100.00%
|
$
|
70,262,262
|
100.00%
|
||||||
Quarter End Real Estate Property Portfolio Summary
The following tables set forth certain information regarding the Company’s real estate portfolio at September 30, 2013 and December 31, 2012.
Real Estate Held for Investment:
|
September 30,
2013
|
December 31,
2012
|
||||||
|
Land
|
$
|
43,632,440
|
$
|
24,766,280
|
|||
|
Residential
|
47,292,299
|
14,547,406
|
|||||
|
Retail
|
15,637,078
|
11,974,751
|
|||||
|
Office
|
9,407,856
|
9,657,815
|
|||||
|
Industrial
|
4,568,415
|
4,656,936
|
|||||
|
Storage
|
3,967,754
|
4,037,575
|
|||||
|
Marina
|
2,005,490
|
—
|
|||||
|
Golf course
|
—
|
1,959,492
|
|||||
|
$
|
126,511,332
|
$
|
71,600,255
|
||||
Real Estate Held for Sale:
|
September 30,
2013
|
December 31,
2012
|
||||||
|
Residential
|
$
|
93,647
|
$
|
42,458,402
|
|||
|
Land
|
3,462,664
|
7,752,836
|
|||||
|
Retail
|
—
|
5,553,856
|
|||||
|
Golf course
|
1,961,284
|
—
|
|||||
|
Marina
|
408,000
|
408,000
|
|||||
|
$
|
5,925,595
|
$
|
56,173,094
|
||||
Non-GAAP Financial Measures
Funds from Operations
The Company utilizes supplemental non-GAAP measures of operating performance, including funds from operations (“FFO”), an industry-wide standard measure of REIT operating performance. We believe FFO provides investors with additional information concerning our operating performance and a basis to compare our performance with those of other REITs. We determine FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts ("NAREIT"), as net income (loss) attributable to common stockholders (computed in accordance with GAAP), plus depreciation and amortization of real estate assets, plus impairments of real estate assets and provisions for loan losses, reduced by gains (losses) from sales of real estate and extraordinary items, and after adjustments for unconsolidated ventures.
Our calculation of FFO may not be comparable to similar measures reported by other REITs. This non-GAAP financial measure should not be considered as an alternative to net income as a measure of our operating performance or to cash flows computed in accordance with GAAP as a measure of liquidity, nor is it indicative of cash flows from operating and financial activities.
We urge investors to carefully review the GAAP financial information included as part of the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and quarterly earnings releases.
The following table reconciles FFO to comparable GAAP financial measures:
Funds from Operations:
|
For the Three Months Ended
|
For the Nine Months Ended
|
|||||||
|
September 30, 2013
|
September 30, 2012
|
September 30, 2013
|
September 30, 2012
|
|||||
|
Funds from Operations
|
||||||||
|
Net income attributable to common stockholders
|
$ 701,074
|
$ 1,114,328
|
$ 8,562,023
|
$ 242,600
|
||||
|
Adjustments:
|
||||||||
|
Depreciation and amortization of real estate assets
|
516,546
|
315,233
|
1,866,767
|
1,669,822
|
||||
|
Depreciation allocated to non-controlling interests
|
(31,404
|
)
|
(3,164
|
)
|
(151,919
|
)
|
(67,122
|
)
|
|
Provisions for impairment of real estate assets
|
-
|
614,786
|
-
|
1,033,266
|
||||
|
(Reversal of) provision for loan losses
|
(419,860
|
)
|
551,570
|
(7,376,344
|
)
|
399,179
|
||
|
Gain on sales of real estate assets
|
(251,887
|
)
|
(1,859,230
|
)
|
(2,712,096
|
)
|
(2,652,542
|
)
|
|
Adjustments for unconsolidated ventures
|
(38,946
|
)
|
(37,921
|
)
|
(38,572
|
)
|
(51,094
|
)
|
|
FFO attributable to common stockholders
|
$ 475,523
|
$ 695,602
|
$ 149,859
|
$ 574,109
|
||||
|
Basic and diluted FFO per common share
|
$ 0.04
|
$ 0.06
|
$ 0.01
|
$ 0.05
|
||||
Subsequent Events
Common Stock Dividend
The Board of Directors declared a dividend of $0.016 per share of common stock that was payable on October 14, 2013 to stockholders of record at the close of business on October 5, 2013.
The Board of Directors declared a dividend of $0.016 per share of common stock that is payable on November 13, 2013 to stockholders of record at the close of business on November 5, 2013.
Pursuant to the Company’s Rule 10b5-1 stock repurchase plan, the Company repurchased an additional 226,895 shares of its common stock subsequent to September 30, 2013 through November 6, 2013 (settlement date) for a total cost of approximately $2,840,000.
About Owens Realty Mortgage, Inc.
Owens Realty Mortgage, Inc., a Maryland corporation, is a specialty finance company that invests in commercial real estate mortgage loans primarily in the Western U.S. The Company provides customized, short-term capital to small and middle-market investors and developers who require speed and flexibility. We are organized and conduct our operations to qualify as a real estate investment trust, or REIT, for U.S. federal income tax purposes. Owens Realty Mortgage, Inc., is headquartered in Walnut Creek, California, and is externally managed and advised by Owens Financial Group, Inc.
Additional information can be found on the Company’s website at www.owensmortgage.com.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Actual results may differ from expectations, estimates and projections and, consequently, readers should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “target,” “assume,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believe,” “predicts,” “potential,” “continue,” and similar expressions are intended to identify such forward-looking statements.
Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. The Company does not undertake or accept any obligation to release publicly any updates or revisions to any forward-looking statement to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based. Additional information concerning these and other risk factors is contained in the Company’s most recent filings with the Securities and Exchange Commission. All subsequent written and oral forward looking statements concerning the Company or matters attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above.
Selected Financial Data:
OWENS REALTY MORTGAGE, INC.
Consolidated Balance Sheets as Recast (1)
(UNAUDITED)
|
September 30,
|
December 31,
|
||||||
|
2013
|
2012
|
||||||
|
ASSETS
|
|||||||
|
Cash and cash equivalents
|
$
|
24,726,665
|
$
|
21,131,505
|
|||
|
Restricted cash
|
3,984,474
|
6,264,110
|
|||||
|
Loans, net of allowance for losses of $5,184,856 in 2013 and $24,417,897 in 2012
|
48,434,100
|
45,844,365
|
|||||
|
Interest and other receivables
|
1,501,004
|
3,485,061
|
|||||
|
Other assets, net of accumulated depreciation and amortization of $952,709 in 2013 and $877,589 in 2012
|
1,100,526
|
1,126,723
|
|||||
|
Investment in limited liability company
|
2,180,349
|
2,141,777
|
|||||
|
Real estate held for sale
|
5,925,595
|
56,173,094
|
|||||
|
Real estate held for investment, net of accumulated depreciation of $9,077,635 in 2013 and $6,518,160 in 2012
|
126,511,332
|
71,600,255
|
|||||
|
Total Assets
|
$
|
214,364,045
|
$
|
207,766,890
|
|||
|
LIABILITIES AND EQUITY
|
|||||||
|
LIABILITIES:
|
|||||||
|
Dividends payable
|
$
|
180,000
|
$
|
1,234,352
|
|||
|
Due to Manager
|
271,391
|
298,349
|
|||||
|
Accounts payable and accrued liabilities
|
5,342,705
|
4,012,650
|
|||||
|
Deferred gains
|
3,635,310
|
1,327,406
|
|||||
|
Notes payable
|
14,160,565
|
13,384,902
|
|||||
|
Total Liabilities
|
23,589,971
|
20,257,659
|
|||||
|
Commitments and Contingencies (Note 12)
|
|||||||
|
EQUITY:
|
|||||||
|
Stockholders’ equity:
|
|||||||
|
Preferred stock, $.01 par value per share, 5,000,000 shares authorized, no shares issued and outstanding at September 30, 2013 and December 31, 2012
|
—
|
—
|
|||||
|
Common stock, $.01 par value per share, 50,000,000 shares authorized, 11,198,119 shares issued, 11,161,259 and 11,198,119 shares outstanding at September 30, 2013 and December 31, 2012, respectively
|
111,981
|
111,981
|
|||||
|
Additional paid-in capital
|
182,437,522
|
182,985,281
|
|||||
|
Treasury stock, at cost – 36,860 shares at September 30, 2013
|
(459,634
|
)
|
—
|
||||
|
Retained earnings (accumulated deficit)
|
2,714,664
|
(3,637,331
|
)
|
||||
|
Total stockholders’ equity
|
184,804,533
|
179,459,931
|
|||||
|
Non-controlling interests
|
5,969,541
|
8,049,300
|
|||||
|
Total Equity
|
190,774,074
|
187,509,231
|
|||||
|
Total Liabilities and Equity
|
$
|
214,364,045
|
$
|
207,766,890
|
(1) As recast to reflect the balances of Owens Mortgage Investment Fund, LP combined with the balances of Owens Realty Mortgage, Inc. beginning January 1, 2012, as required under the accounting guidelines for a transfer of an entity under common control (refer to Note 1).
OWENS REALTY MORTGAGE, INC.
Consolidated Statements of Operations as Recast (1)
(UNAUDITED)
|
For the Three Months Ended
|
For the Nine Months Ended
|
||||||||||||
|
September 30, 2013
|
September 30, 2012
|
September 30, 2013
|
September 30, 2012
|
||||||||||
|
Revenues:
|
|||||||||||||
|
Interest income on loans
|
$
|
749,929
|
$
|
859,636
|
$
|
2,360,891
|
$
|
2,009,445
|
|||||
|
Gain on foreclosure of loan
|
—
|
—
|
952,357
|
—
|
|||||||||
|
Rental and other income from real estate properties
|
2,887,984
|
3,427,716
|
8,408,351
|
10,105,320
|
|||||||||
|
Income from investment in limited liability company
|
38,946
|
37,921
|
118,572
|
116,094
|
|||||||||
|
Other income
|
98
|
1,574
|
1,620
|
5,168
|
|||||||||
|
Total revenues
|
3,676,957
|
4,326,847
|
11,841,791
|
12,236,027
|
|||||||||
|
Expenses:
|
|||||||||||||
|
Management fees to Manager
|
373,067
|
405,324
|
1,264,668
|
1,301,201
|
|||||||||
|
Servicing fees to Manager
|
33,915
|
41,158
|
115,333
|
123,300
|
|||||||||
|
General and administrative expense
|
496,088
|
370,706
|
1,193,954
|
1,148,608
|
|||||||||
|
Rental and other expenses on real estate properties
|
2,071,900
|
2,626,057
|
6,403,757
|
7,786,233
|
|||||||||
|
Depreciation and amortization
|
539,532
|
371,937
|
1,941,887
|
1,846,158
|
|||||||||
|
Interest expense
|
129,229
|
131,360
|
385,064
|
392,735
|
|||||||||
|
Environmental remediation expense
|
—
|
—
|
—
|
100,000
|
|||||||||
|
(Reversal of) provision for loan losses
|
(419,860
|
)
|
551,570
|
(7,376,344
|
)
|
399,179
|
|||||||
|
Impairment losses on real estate properties
|
—
|
614,786
|
—
|
1,033,266
|
|||||||||
|
Total expenses
|
3,223,871
|
5,112,898
|
3,928,319
|
14,130,680
|
|||||||||
|
Operating income (loss)
|
453,086
|
(786,051
|
)
|
7,913,472
|
(1,894,653
|
)
|
|||||||
|
Gain on sales of real estate, net
|
251,887
|
1,859,230
|
2,712,096
|
2,652,542
|
|||||||||
|
Net income and comprehensive income
|
704,973
|
1,073,179
|
10,625,568
|
757,889
|
|||||||||
|
Less: Net (income) loss attributable to non-controlling interests
|
(3,899
|
)
|
41,149
|
(2,063,545
|
)
|
(515,289
|
)
|
||||||
|
Net income and comprehensive income attributable to common stockholders
|
$
|
701,074
|
$
|
1,114,328
|
$
|
8,562,023
|
$
|
242,600
|
|||||
|
Per common share data:
|
|||||||||||||
|
Basic and diluted earnings per common share
|
$
|
0.06
|
$
|
0.10
|
$
|
0.76
|
$
|
0.02
|
|||||
|
Basic and diluted weighted average number of common shares outstanding
|
11,196,646
|
11,198,119
|
11,197,622
|
11,198,119
|
|||||||||
|
Dividends declared per share of common stock
|
$
|
0.05
|
$
|
0.03
|
$
|
0.20
|
$
|
0.06
|
|||||
(1) As recast to reflect the balances of Owens Mortgage Investment Fund, LP combined with the balances of Owens Realty Mortgage, Inc. beginning January 1, 2012, as required under the accounting guidelines for a transfer of an entity under common control (refer to Note 1).