OWENS REALTY MORTGAGE INC WALNUT CREEK, Calif., May 9, 2017 /PRNewswire/ -- Owens Realty Mortgage, Inc. (the "Company") (NYSE MKT: ORM) today reported financial results for the first quarter ended March 31, 2017.
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First Quarter 2017 Financial Highlights
-- Net income attributable to common stockholders of $191,678, or $0.02 per
fully-diluted common share
-- Book value attributable to common stockholders of $20.97 per common
share at March 31, 2017 as compared to $21.03 per common share at
December 31, 2016
-- Declared quarterly dividends of $0.08 per share of common stock
First Quarter 2017 Operational Highlights
-- Originated five new loans in the quarter totaling $14,943,000 (note
amount) and received full or partial payoffs on eight loans totaling
$8,695,000
-- Average balance of performing loans for the three months ended March 31,
2017 as compared to the three months ended March 31, 2016 increased by
approximately 29%
-- Sold two real estate properties for net proceeds of $872,000 resulting
in an insignificant loss
Subsequent Events
-- In April 2017, the Company sold the approximately 8.0 acres of land and
entitlements, including related parking and garage structures, owned by
Tahoe Stateline Venture, LLC located in South Lake Tahoe, California for
net sales proceeds of approximately $42,300,000, resulting in a gain of
approximately $13,200,000
"The first quarter's results were significantly affected by the timing of our lending activity. Although we cannot predict loan originations in a given period, the first quarter of the year has historically been slow. In addition, as of quarter end, we had many loans in the pipeline delayed for a variety of reasons, primarily related to borrowers. Also, our net income from real estate was lower than expected due primarily to a one-time charge and the effects of weather on our golf course asset. However, with the recent sale of the land held within Tahoe Stateline Venture, LLC, we have positioned the Company to capitalize on lending opportunities in the near term which would be further enhanced by sales of other real estate" said Bryan Draper, the Company's CEO.
Summary of First Quarter 2017 Financial Results
The Company reported net income attributable to common stockholders of $191,678, or $0.02 per fully-diluted common share, for the quarter ended March 31, 2017 as compared to net income of $4,734,262, or $0.46 per fully-diluted common share, for the quarter ended March 31, 2016. The decrease was primarily a result of the following:
-- A decrease in gain on sale of real estate of $4,839,000 for the quarter
ended March 31, 2017 due to the sale of two properties during the
quarter ended March 31, 2016 with gains totaling $4,839,000 as compared
to the sale of two properties during the quarter ended March 31, 2017
that resulted in an insignificant loss.
-- A decrease in rental and other income from real estate properties net of
expenses on such properties of $573,000 for the quarter ended March 31,
2017 (from income of $6,000 in 2016 to loss of $567,000 in 2017) as a
result of the sale of four operating properties during 2016, a one-time
increase in property tax assessments levied on our property located in
Tacoma, Washington of $170,000 and decreased revenue on our golf course
located in Auburn, California as a result of inclement weather in
Northern California. Many of the remaining properties held by us are
non-operating properties that do not generate income and, thus, will
likely continue to generate a loss until they are disposed of in 2017
and beyond.
-- An increase in management and service fees of $199,000 for the quarter
ended March 31, 2017 due to an increase in the average balance of loans
in the Company's portfolio of 24% between the quarters ended March 31,
2017 and March 31, 2016.
These items that decreased net income during the three months ended March 31, 2017 were partially offset by the following:
-- An increase in interest income on loans secured by trust deeds of
$504,000 for the quarter ended March 31, 2017 due to an increase in the
average balance of performing loans between the quarter ended March 31,
2016 and the quarter ended March 31, 2017 of approximately 29%.
-- A decrease in interest expense of $396,000 for the quarter ended March
31, 2017 due to the sale of the TOTB Miami properties and repayment of
the debt securing the properties during the third quarter of 2016 and a
decrease in the average balance on our line of credit during the quarter
ended March 31, 2017 as compared to the quarter ended March 31, 2016.
We believe, from period to period in the near term, there could be fluctuations in earnings and net income resulting from the lag time between the sale of our income-producing real estate assets and deployment of the proceeds into new loan investments.
Quarter End Loan Portfolio Summary
The following tables set forth certain information regarding the Company's loan portfolio at March 31, 2017 and December 31, 2016.
March 31, December
31, 2016
2017
----
By Property Type:
-----------------
Commercial $110,682,477 $102,442,111
Residential 17,783,924 19,001,677
Land 8,238,523 8,238,523
--------- ---------
$136,704,924 $129,682,311
============ ============
By Position:
------------
Senior loans $133,897,052 $126,873,673
Junior loans 2,807,572 2,808,638
--------- ---------
$136,704,924 $129,682,311
============ ============
The types of property securing the Company's commercial real estate loans are as follows:
March 31, December 31,
2017 2016
---- ----
Commercial Real
Estate Loans:
---------------
Office $30,305,689 $33,608,898
Retail 29,947,791 19,959,635
Storage 13,751,272 13,015,175
Hotel 9,784,098 9,567,143
Apartment 9,638,644 11,366,570
Industrial 4,376,477 7,376,477
Marina 3,500,000 3,500,000
Warehouse 3,000,000 -
Parking garage 2,200,000 -
Assisted care 1,458,506 1,328,213
Church 1,175,000 1,175,000
Golf course 1,145,000 1,145,000
Restaurant 400,000 400,000
------- -------
$110,682,477 $102,442,111
============ ============
Loans by geographic location:
March 31, 2017 December 31, 2016
-------------- -----------------
Balance Percentage Balance Percentage
------- ---------- ------- ----------
California $101,970,731 74.59% $98,319,923 75.81%
Arizona 3,952,974 2.89% 4,655,517 3.59%
Colorado 5,100,274 3.73% 1,595,000 1.23%
Hawaii 1,450,000 1.06% 1,450,000 1.12%
Michigan 10,601,297 7.76% 10,337,157 7.97%
Nevada 3,669,583 2.68% 3,669,584 2.83%
Ohio 3,698,234 2.71% 3,627,506 2.80%
Texas 6,261,831 4.58% 6,027,624 4.65%
--------- ---- --------- ----
$136,704,924 100.00% $129,682,311 100.00%
============ ====== ============ ======
Quarter End Real Estate Property Portfolio
The following tables set forth certain information regarding the Company's real estate portfolio at March 31, 2017 and December 31, 2016.
Real Estate Held for Sale:
March 31, December 31,
2017 2016
---- ----
Land (including land under
development) $78,068,730 $73,140,659
Golf course 1,970,437 1,970,437
Marina 1,462,876 -
Office - 732,539
$81,502,043 $75,843,635
=========== ===========
Real Estate Held for Investment:
March 31, December 31,
2017 2016
---- ----
Retail $16,646,653 $16,829,995
Land 4,235,465 4,234,806
Residential 2,393,328 2,405,439
Assisted care 5,786,246 5,820,709
Office 3,925,360 3,962,869
Marina 2,539,637 4,025,945
$35,526,689 $37,279,763
=========== ===========
Conference Call
The Company will host a conference call to discuss the results on Wednesday, May 10, 2017, at 10:00 a.m. PT / 1:00 p.m. ET.
To participate in the call, please dial (844) 850-0545 (United States) or (412) 317-5202 (International) and request the Owens Realty Mortgage call. A live webcast of the call will also be available on the Company's website at www.owensmortgage.com. Please allow 10 minutes prior to the call to visit this site to download and install any necessary audio software.
An archive of the webcast will be available approximately one hour after completion of the live event and will be accessible on the Investor Relations section of the Company's website at www.owensmortgage.com until June 9, 2017. To access the replay, dial (877) 344-7529 (United States) or (412) 317-0088 (International) and enter code: 10106081.
About Owens Realty Mortgage, Inc
Owens Realty Mortgage, Inc., a Maryland corporation, is a specialty finance mortgage company organized to qualify as a real estate investment trust ("REIT") that focuses on the origination, investment, and management of small balance and middle-market commercial real estate loans. We provide customized, short-term acquisition and transition capital to commercial real estate investors that require speed and flexibility. Our primary objective is to provide investors with attractive current income and long-term shareholder value. 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. Forward-looking statements about Owens Realty Mortgage Inc.'s plans, strategies, prospects, and anticipated events, including the maximum borrowings available under its credit facilities, anticipated construction progress and completion, potential leasing activities, and repositioning and possible sale of real estate assets, are based on current information, estimates, and projections; they are subject to, risks and uncertainties, as well as known and unknown risks, which could cause actual results to 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
(UNAUDITED)
March 31, December 31,
2017 2016
---- ----
ASSETS
------
Cash and cash equivalents $601,734 $434,243
Restricted cash 6,500,000 6,500,000
Loans, net of allowance for
losses of $2,636,859 in 2017
and $2,706,822 in 2016 134,068,065 126,975,489
Interest and other receivables 2,166,239 2,164,335
Other assets, net of accumulated
depreciation and amortization
of $266,097 in 2017 and
$251,729 in 2016 857,489 803,676
Deferred financing costs, net of
accumulated amortization of
$144,570 in 2017 and $107,744
in 2016 135,029 171,855
Deferred tax assets, net 7,259,013 7,248,977
Investment in limited liability
company 2,184,474 2,140,482
Real estate held for sale 81,502,043 75,843,635
Real estate held for investment,
net of accumulated depreciation
of $3,363,333 in 2017 and
$3,151,427 in 2016 35,526,689 37,279,763
---------- ----------
Total assets $270,800,775 $259,562,455
============ ============
LIABILITIES AND EQUITY
----------------------
LIABILITIES:
Dividends payable $819,798 $1,402,496
Due to Manager 372,532 360,627
Accounts payable and accrued
liabilities 2,511,774 3,699,859
Deferred gains on sales of real
estate 209,662 209,662
Lines of credit payable 14,164,000 4,976,000
Notes and loans payable on real
estate 37,823,252 33,385,934
---------- ----------
Total liabilities 55,901,018 44,034,578
---------- ----------
Commitments and Contingencies
EQUITY:
Stockholders' equity:
Preferred stock, $.01 par value
per share, 5,000,000 shares
authorized, no shares issued
and outstanding at March 31,
2017 and December 31, 2016 - -
Common stock, $.01 par value per
share, 50,000,000 shares
authorized, 11,198,119 shares
issued, 10,247,477 shares
outstanding at March 31, 2017
and December 31, 2016 111,981 111,981
Additional paid-in capital 182,437,522 182,437,522
Treasury stock, at cost -
950,642 shares at March 31,
2017 and December 31, 2016 (12,852,058) (12,852,058)
Retained earnings 45,202,312 45,830,432
---------- ----------
Total stockholders' equity 214,899,757 215,527,877
Total liabilities and equity $270,800,775 $259,562,455
============ ============
OWENS REALTY MORTGAGE, INC.
Consolidated Statements of Income
(UNAUDITED)
Three Months Ended March 31,
----------------------------
2017 2016
---- ----
Revenues:
Interest income on loans $2,547,042 $2,043,008
Rental and other income from real
estate properties 946,371 2,139,985
Income from investment in limited
liability company 43,992 42,624
Total revenues 3,537,405 4,225,617
--------- ---------
Expenses:
Management fees to Manager 947,514 765,515
Servicing fees to Manager 86,138 69,592
General and administrative expense 483,814 553,417
Rental and other expenses on real
estate properties 1,203,319 1,790,379
Depreciation and amortization 309,960 343,649
Interest expense 286,801 683,051
Provision for loan losses 38,036 111,075
Total expenses 3,355,582 4,316,678
Operating income (loss) 181,823 (91,061)
(Loss) gain on sales of real estate,
net (181) 4,838,815
---- ---------
Net income before income taxes 181,642 4,747,754
Income tax benefit 10,036 -
------ ---
Net income 191,678 4,747,754
Less: Net income attributable to non-
controlling interests - (13,492)
--- -------
Net income attributable to common
stockholders $191,678 $4,734,262
Per common share data:
Basic and diluted earnings per common
share $0.02 $0.46
===== =====
Basic and diluted weighted average
number of common shares outstanding 10,247,477 10,247,477
========== ==========
Dividends declared per share of
common stock $0.08 $0.08
===== =====
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SOURCE Owens Realty Mortgage, Inc.
