RAIT Financial Trust Announces Second Quarter 2013 Financial Results
RAIT Financial Trust Announces Second Quarter 2013 Financial Results
PHILADELPHIA--(BUSINESS WIRE)-- RAIT Financial Trust ("RAIT") (NYS: RAS) today announced second quarter 2013 financial results.
Highlights
Adjusted funds from operations ("AFFO") increased 78% to $22.1 million for the quarter ended June 30, 2013 from $12.4 million for the quarter ended June 30, 2012.
AFFO per share increased 28% to $0.32 for the quarter ended June 30, 2013 from $0.25 for the quarter ended June 30, 2012.
Operating income increased 126% to $14.7 million for the quarter ended June 30, 2013 from $6.5 million for the quarter ended June 30, 2012.
Total revenues grew 22% to $58.6 million for the quarter ended June 30, 2013 from $47.9 million for the quarter ended June 30, 2012.
RAIT originated $170.8 million of loans in the quarter ended June 30, 2013 consisting of $139.0 million conduit loans, $19.2 million bridge loans and a $12.6 million mezzanine loan. RAIT originated $265.7 million of loans in the six-month period ended June 30, 2013.
RAIT sold $78.8 million of conduit loans during the quarter ended June 30, 2013 which generated $4.5 million of fee income. RAIT sold $120.2 million of conduit loans during the six-months ended June 30, 2013 and generated $7.7 million of fee income.
Rental income increased 9% to $27.9 million during the quarter ended June 30, 2013 from $25.5 million during the quarter ended June 30, 2012.
Average effective rent per unit per month in RAIT's multifamily portfolio increased 5% to $727 for the quarter ended June 30, 2013 from $695 for the quarter ended June 30, 2012.
On April 3, 2013, RAIT raised proceeds of $70.2 million in an underwritten public offering of RAIT's common shares.
RAIT declared a second quarter 2013 common dividend of $0.13 per share, representing an 8% increase from the prior quarter's dividend of $0.12 per common share and a 63% increase from the second quarter 2012 dividend of $0.08 per common share.
Scott Schaeffer, RAIT's Chairman and CEO, said, "The second quarter results demonstrate our ability to profitably deploy capital into our lending lines and to manage our existing real estate portfolio. During the first half of 2013, loan originations and loan sales continue to trend higher resulting in increased operating income and AFFO per share from the second quarter of 2012. Notwithstanding the increase in outstanding shares from two secondary offerings, RAIT's performance led to an 8% increase in the common dividend from the first quarter of 2013 and a 63% increase from the second quarter 2012 dividend of $0.08 per common share."
Second Quarter 2013 Results
RAIT reported AFFO, a non-GAAP financial measure, for the three-month period ended June 30, 2013 of $22.1 million, or $0.32 per share - diluted based on 69.8 million weighted-average shares outstanding - diluted, as compared to AFFO for the three-month period ended June 30, 2012 of $12.4 million, or $0.25 per share - diluted based on 49.9 million weighted-average shares outstanding - diluted. RAIT reported a net loss allocable to common shares for the three-month period ended June 30, 2013 of $65.9 million, or $0.94 total loss per share - diluted based on 69.8 million weighted-average shares outstanding - diluted, as compared to net loss allocable to common shares for the three-month period ended June 30, 2012 of $7.0 million, or $0.14 total loss per share - diluted based on 49.9 million weighted-average shares outstanding - diluted. The second quarter 2013 net loss includes $76.0 million of unrealized losses relating primarily to non-cash mark-to-market adjustments in RAIT's legacy Taberna portfolios and the associated hedges. Non-cash mark-to-market gains and losses are excluded from AFFO.
RAIT reported AFFO for the six-month period ended June 30, 2013 of $40.6 million, or $0.62 per share - diluted based on 65.1 million weighted-average shares outstanding - diluted, as compared to AFFO for the six-month period ended June 30, 2012 of $21.7 million, or $0.46 per share - diluted based on 47.0 million weighted-average shares outstanding - diluted. RAIT reported a net loss allocable to common shares for the six-month period ended June 30, 2013 of $156.4 million, or $2.40 total loss per share - diluted based on 65.1 million weighted-average shares outstanding - diluted, as compared to net loss allocable to common shares for the six-month period ended June 30, 2012 of $114.0 million, or $2.42 total loss per share - diluted based on 47.0 million weighted-average shares outstanding - diluted.
A reconciliation of RAIT's reported net income (loss) allocable to common shares to its AFFO is included as Schedule I to this release. A reconciliation of RAIT's total shareholders' equity to its adjusted book value, a non-GAAP financial measure, is included as Schedule II to this release. Schedule I and Schedule II also include management's respective rationales for the usefulness of each of these non-GAAP financial measures.
RAIT also reported the following:
Investments in Real Estate. As of June 30 2013, RAIT had investments in real estate of $949.6 million as compared to $918.2 million at December 31, 2012.
Average Occupancy. The average occupancy of RAIT's portfolio of investments in real estate increased to 87.1% at June 30, 2013 from 85.1% at December 31, 2012.
CRE CDO Coverage Tests. As of the most recent reporting date, RAIT CRE CDO I, Ltd's overcollateralization test was passing at 126.9% with a trigger of 116.2% and RAIT Preferred Funding II, Ltd's overcollateralization test was passing at 117.7% with a trigger of 111.7%.
Provision for losses. The provision for losses on RAIT's commercial real estate loan portfolio was $0.5 million for the quarter ended June 30, 2013 unchanged from the quarter ended June 30, 2012.
Dividends. On June 20, 2013, RAIT declared a second quarter common dividend of $0.13 per common share to shareholders of record on July 12, 2013. The dividend was paid on July 31, 2013. On May 14, 2013, RAIT's Board of Trustees declared a second quarter 2013 cash dividend of $0.484375 per share on RAIT's 7.75% Series A Cumulative Redeemable Preferred Shares, $0.5234375 per share on RAIT's 8.375% Series B Cumulative Redeemable Preferred Shares and $0.5546875 per share on RAIT's 8.875% Series C Cumulative Redeemable Preferred Shares. The preferred dividends were paid on July 1, 2013 to holders of record on June 3, 2013.
Key Statistics | ||||||||||
(Unaudited and dollars in thousands, except per share information) | ||||||||||
As of or For the Three-Month Periods Ended | ||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||
2013 | 2013 | 2012 | 2012 | 2012 | ||||||
Financial Statistics: | ||||||||||
Assets under management | $3,692,349 | $3,669,564 | $3,630,959 | $3,598,503 | $3,642,189 | |||||
Total revenue | $58,622 | $58,251 | $54,922 | $52,193 | $47,873 | |||||
Earnings per share - diluted | $(0.94) | $(1.50) | $(0.99) | $(0.37) | $(0.14) | |||||
Funds from Operations ("FFO") per share | $(0.81) | $(1.37) | $(0.83) | $(0.21) | $0.01 | |||||
AFFO per share | $0.32 | $0.31 | $0.33 | $0.30 | $0.25 | |||||
Common dividend declared | $0.13 | $0.12 | $0.10 | $0.09 | $0.08 | |||||
Commercial Real Estate ("CRE") Loan Portfolio: | ||||||||||
CRE loans-- unpaid principal | $1,154,306 | $1,118,519 | $1,068,984 | $1,042,047 | $1,072,655 | |||||
Non-accrual loans -- unpaid principal | $65,597 | $68,257 | $69,080 | $70,419 | $73,592 | |||||
Non-accrual loans as a % of reported loans | 5.7% | 6.1% | 6.5% | 6.8% | 6.9% | |||||
Reserve for losses | $24,222 | $26,206 | $30,400 | $32,738 | $35,426 | |||||
Reserves as a % of non-accrual loans | 36.9% | 38.4% | 44.0% | 46.5% | 48.1% | |||||
Provision for losses | $500 | $500 | $500 | $500 | $500 | |||||
CRE Property Portfolio: | ||||||||||
Reported investments in real estate | $949,649 | $914,919 | $918,189 | $906,487 | $911,128 | |||||
Net operating income | $12,947 | $12,759 | $12,184 | $12,158 | $12,053 | |||||
Number of properties owned | 60 | 59 | 59 | 58 | 58 | |||||
Multifamily units owned | 8,535 | 8,206 | 8,206 | 8,014 | 8,014 | |||||
Office square feet owned | 2,015,576 | 2,015,524 | 2,015,524 | 2,015,524 | 2,015,524 | |||||
Retail square feet owned | 1,421,059 | 1,422,572 | 1,422,572 | 1,422,481 | 1,422,298 | |||||
Land (acres owned) | 21.92 | 21.92 | 21.92 | 21.92 | 21.92 | |||||
Average occupancy data: | ||||||||||
Multifamily | 92.6% | 92.6% | 90.0% | 90.2% | 91.2% | |||||
Office | 74.3% | 70.3% | 72.8% | 71.9% | 71.0% | |||||
Retail | 68.7% | 68.9% | 73.2% | 73.2% | 70.0% | |||||
Total | 87.1% | 85.9% | 85.1% | 84.6% | 85.2% | |||||
Average Effective Rent per Unit/Square Foot (1): | ||||||||||
Multifamily (2) | $727 | $720 | $718 | $699 | $695 | |||||
Office (3) | $18.77 | $18.91 | $18.82 | $19.08 | $19.07 | |||||
Retail (3) | $11.78 | $11.95 | $12.53 | $11.74 | $12.44 | |||||
(1) | Based on properties owned as of June 30, 2013. | |
(2) | Average effective rent is rent per unit per month. | |
(3) | Average effective rent is rent per square foot per year. | |
Conference Call
All interested parties can listen to the live conference call webcast at 9:00 AM EDT on Thursday, August 1, 2013 from the home page of the RAIT Financial Trust website at www.raitft.com or by dialing 866.788.0542, access code 21823316. For those who are not available to listen to the live call, the replay will be available shortly following the live call on RAIT's website and telephonically until Thursday, August 8, 2013, by dialing 888.286.8010, access code 84101872.
About RAIT Financial Trust
RAIT Financial Trust is an internally-managed real estate investment trust that provides debt financing options to owners of commercial real estate and invests directly into commercial real estate properties located throughout the United States. In addition, RAIT is an asset and property manager of real estate-related assets. For more information, please visit www.raitft.com or call Investor Relations at 215.243.9000.
Forward-Looking Statements
This press release may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as "may," "trend", "will," "expect," "intend," "anticipate," "estimate," "believe," "continue," "goal" or other similar words. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such forward-looking statements. These risks, uncertainties and contingencies include, but are not limited to, those disclosed in RAIT's filings with the Securities and Exchange Commission. RAIT undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may be required by law.
RAIT Financial Trust | ||||||||||||||||
Consolidated Statements of Operations | ||||||||||||||||
(Dollars in thousands, except share and per share information) | ||||||||||||||||
(unaudited) | ||||||||||||||||
For the Three-Month | For the Six-Month | |||||||||||||||
Period Ended | Period Ended | |||||||||||||||
June 30 | June 30 | |||||||||||||||
Revenues: | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Net interest margin: | ||||||||||||||||
Investment Interest income | $ | 31,256 | $ | 28,745 | $ | 62,536 | $ | 56,701 | ||||||||
Investment Interest expense | (7,278 | ) | (8,474 | ) | (14,761 | ) | (16,923 | ) | ||||||||
Net interest margin | 23,978 | 20,271 | 47,775 | 39,778 | ||||||||||||
Rental income | 27,858 | 25,540 | 55,027 | 50,371 | ||||||||||||
Fee and other income | 6,786 | 2,062 | 14,071 | 3,520 | ||||||||||||
Total revenue | 58,622 | 47,873 | 116,873 | 93,669 | ||||||||||||
Expenses: | ||||||||||||||||
Interest expense | 9,978 | 10,764 | 19,644 | 21,663 | ||||||||||||
Real estate operating expense | 14,911 | 13,487 | 29,321 | 27,284 | ||||||||||||
Compensation expense | 6,337 | 5,246 | 13,284 | 10,984 | ||||||||||||
General and administrative expense | 3,562 | 3,783 | 7,338 | 7,608 | ||||||||||||
Provision for loan losses | 500 | 500 | 1,000 | 1,000 | ||||||||||||
Depreciation and amortization | 8,618 | 7,631 | 17,188 | 15,294 | ||||||||||||
Total expenses | 43,906 | 41,411 | 87,775 | 83,833 | ||||||||||||
Operating income | 14,716 | 6,462 | 29,098 | 9,836 | ||||||||||||
Interest and other income (expense) | 69 | (1,471 | ) | 145 | (1,438 | ) | ||||||||||
Gains (losses) on sale of assets | 224 | 2,518 | 221 | 2,529 | ||||||||||||
Gains (losses) on extinguishment of debt | - | - | - | 1,574 | ||||||||||||
Change in fair value of financial instruments | (76,020 | ) | (11,169 | ) | (175,777 | ) | (120,092 | ) | ||||||||
Income (loss) before taxes and discontinued operations | (61,011 | ) | (3,660 | ) | (146,313 | ) | (107,591 | ) | ||||||||
Income tax benefit (provision) | 673 | 90 | 634 | 357 | ||||||||||||
Income (loss) from continuing operations | (60,338 | ) | (3,570 | ) | (145,679 | ) | (107,234 | ) | ||||||||
Income (loss) from discontinued operations | - | - | - | - | ||||||||||||
Net income (loss) | (60,338 | ) | (3,570 | ) | (145,679 | ) | (107,234 | ) | ||||||||
(Income) loss allocated to preferred shares | (5,589 | ) | (3,419 | ) | (10,807 | ) | (6,829 | ) | ||||||||
(Income) loss allocated to noncontrolling interests | 50 | 38 | 77 | 93 | ||||||||||||
Net income (loss) allocable to common shares | $ | (65,877 | ) | $ | (6,951 | ) | $ | (156,409 | ) | $ | (113,970 | ) | ||||
Earnings (loss) per share—Basic: | ||||||||||||||||
Continuing operations | $ | (0.94 | ) | $ | (0.14 | ) | $ | (2.40 | ) | $ | (2.42 | ) | ||||
Discontinued operations | - | - | - | - | ||||||||||||
Total earnings (loss) per share—Basic | $ | (0.94 | ) | $ | (0.14 | ) | $ | (2.40 | ) | $ | (2.42 | ) | ||||
Weighted-average shares outstanding—Basic | ||||||||||||||||
