Colony Financial Announces Fourth Quarter and Full Year 2012 Financial Results
Colony Financial Announces Fourth Quarter and Full Year 2012 Financial
Results
Business Wire
LOS ANGELES -- March 6, 2013
Colony Financial, Inc. (NYSE: CLNY) (the “Company”) today announced financial
results for the fourth quarter and full year ended December 31, 2012.
Fourth Quarter 2012 Highlights
* Core Earnings, a non-GAAP financial measure, of $18.0 million, or $0.41
per basic and diluted share and net income attributable to common
stockholders of $13.5 million, or $0.31 per basic and diluted share
* During the quarter, the Company invested approximately $243 million,
composed of $105 million additional equity into CSFR Operating
Partnership, L.P. (“CSFR”), our single family home rental platform, $52
million into two loan originations with a blended interest rate of 10% and
$86 million into four separate transactions involving the discounted
purchase of performing and non-performing first mortgage loans or loan
portfolios at an average price of 61% of par
* Raised net proceeds of approximately $221 million through the sale of 11.5
million shares of the Company’s common stock to underwriters at a net
price of $19.29 per share
* Declared and paid a fourth quarter dividend of $0.35 per share of common
stock, consistent with the third quarter, and a special dividend for 2012
of $0.05 per common share
* The plan of reorganization for the 103 property Hotel Portfolio was
approved by a bankruptcy court accomplishing a number of matters,
including a restructuring of the mortgage loan, a change in hotel
management, a sale of a minority equity interest, and a re-flagging of the
hotels with various nationally recognized brands
* Subsequent to quarter end, the Company invested and agreed to invest
approximately $481 million, composed of an additional $295 million into
CSFR (for an aggregate investment and commitment of $550 million into
CSFR), $23 million into a loan acquisition at a purchase price of 78% of
par and $163 million into three new first mortgage originations that have
a blended interest rate of approximately 9%
* Subsequent to quarter end, the Company raised additional net proceeds of
$232 million through the sale of 11.5 million shares of its common stock
to underwriters at a net price of $20.20 per share
Fourth Quarter Operating Results
For the fourth quarter of 2012, equity in income of unconsolidated joint
ventures and interest income and other income from affiliates contributed
$21.5 million and $11.2 million, respectively, to total income of $32.7
million. Total expenses for the quarter were $11.4 million including
administrative expenses of $1.6 million. During the fourth quarter of 2012,
the Company reported net income attributable to common stockholders of $13.5
million, or $0.31 per basic and diluted share. Colony Financial’s Core
Earnings were $18.0 million, or $0.41 per basic and diluted share, for the
fourth quarter of 2012.
“2012 was a breakthrough year for Colony Financial,” said Richard Saltzman,
Colony Financial’s President and Chief Executive Officer. “The Company doubled
in size from an aggregate asset and equity capitalization standpoint since
year end 2011 and is now more than five times our size at IPO in September
2009. Simultaneously, our three primary investment strategies were operating
on all cylinders in terms of new acquisitions and ‘day 2’ asset management
successes. This most notably includes our recent foray into the acquisition of
single family houses for rent in select major US markets where we now own an
interest in approximately 7,000 homes. Finally, our pipeline of new potential
transactions is extremely robust, including some burgeoning European
opportunities, which bodes well for sustaining this trajectory in 2013 and
beyond.”
Fourth Quarter Activity
* The Company increased its investment to $255 million (up from $150 million
invested through the third quarter) in CSFR. At December 31, 2012, CSFR
owned approximately 5,400 homes in six states and as of March 6, 2013,
CSFR owned approximately 7,000 homes in seven states.
* The Company invested $19 million in a joint venture with investment funds
managed by an affiliate of the Company’s Manager (“Co-Investment Fund(s)”)
that acquired a portfolio of 60 performing and non-performing first
mortgage recourse loans at the purchase price of approximately 53% of the
portfolio’s unpaid principal balance (“UPB”) of $69 million. Our share of
this investment is 50%.
* The Company invested $35 million in a joint venture with Co-Investment
Funds that acquired a portfolio of first mortgage loans collateralized
primarily by multifamily properties which are substantially concentrated
in California and New York. The portfolio included 79 performing and
non-performing loans with an aggregate UPB of approximately $95 million.
The purchase price for the portfolio was approximately $69 million, or 73%
of the portfolio’s UPB. The Company’s share of this investment is 50%.
* The Company invested $16 million in a joint venture with Co-Investment
Funds that acquired a sub-performing first mortgage loan secured by an
office tower in Phoenix, Arizona. The purchase price for the loan was
approximately $32 million, or 59% of its UPB of $54 million. Our share of
this investment is 50%.
* The Company invested $16 million in a joint venture with Co-Investment
Funds that consummated a structured transaction with the FDIC. The joint
venture acquired a 40% managing member equity interest in a newly formed
limited liability company created to hold a portfolio of acquired loans,
with the FDIC retaining the other 60% equity interest. The financing of
the transaction included 50% leverage in the form of a $72 million
zero-coupon note provided by the FDIC. The portfolio included 492
performing and non-performing loans with an aggregate UPB of $289 million,
consisting of substantially all first mortgage recourse commercial real
estate and acquisition, development and construction loans. The portfolio
was acquired at approximately 48% of the portfolio's UPB.
* The Company committed $14 million to a joint venture with a Co-Investment
Fund that originated a $28 million loan facility secured by a
master-planned housing development located in Orange County, California.
The loan bears interest at 10% per annum. The loan includes a 50% profit
participation after the lenders and the equity sponsor have each attained
a 14% annual return. Through December 31, 2012, the Company funded $8
million to the joint venture. The Company’s share of this investment is
50%.
* During the quarter, Extended Stay Hotels Inc. (“Extended Stay”), the
borrower on the $37.5 million junior mezzanine loan originated in October
2010, fully paid off the outstanding loan through a refinancing. Extended
Stay is a hotel chain owning properties across the United States and in
Canada. The Company used the proceeds from the pay-off to reinvest in the
two most junior mezzanine loan tranches of the new debt facility. The two
new mezzanine loans bear interest at a blended 10.5% per annum through
their maturity in December 2019 and are collateralized by equity interests
in Extended Stay’s real estate portfolio, as well as the Extended Stay
brands and other intangible assets.
* By means of an initial fulcrum mezzanine loan purchase and subsequent
January 2012 foreclosure, the Company and a Co-Investment fund currently
own equity interests and a mezzanine loan interest in a portfolio of 103
select service hotels (the “Hotel Portfolio”). Our cost basis in the
portfolio is approximately $35,000 per key. In December, a plan of
reorganization was approved by a bankruptcy court accomplishing a number
of matters, including an extension of the mortgage loan which carries an
interest rate of LIBOR plus 110 basis points, a change in hotel
management, a sale of a minority equity interest to the new management
company, and a re-flagging of the hotels with various nationally
recognized brands. To date, the Company and the borrower entities have
incurred approximately $10.7 million of various costs related to the
foreclosure, bankruptcy and restructuring plans, of which, $8.4 million
was recovered in a damages settlement. The Company’s share of the net
costs post settlement was $0.8 million.
* The Company and Co-Investment Funds achieved various other favorable asset
management accomplishments including discounted payoffs, loan
modifications and sales in our small balance loan portfolios, full
repayment of the restructured William Lyon Homes secured loan, and
resolved an office building asset located in Berlin in one of our German
loan portfolios through a receivership sale.
Activities Subsequent to Fourth Quarter 2012
* The Company increased its investment in CSFR to $375 million (up from $255
million invested through the fourth quarter) and increased its commitment
by $100 million to $550 million (up from a previously announced aggregate
commitment of $450 million), on the same cost basis as all other
commitments raised to date by CSFR. Inclusive of the Company’s aggregate
commitment, CSFR has received aggregate commitments of approximately $2.2
billion, of which an aggregate $1.1 billion has been called to date. Based
on data as of March 6, 2013, the current occupancy of CSFR’s plus 180 day
inventory is approximately 90%. Over the past few months, acquisition
activity has outpaced leasing activity (for example, in the month of
February 2013, CSFR acquired 790 homes and leased 390 homes) which has
caused overall portfolio occupancy to recently trend downwards to 53%.
While this trend may continue over the next few months, we believe it will
ultimately reverse itself as renovation and leasing activity increases to
absorb the new inventory and relative acquisition activity declines. The
average cost (purchase price plus renovation costs) basis of CSFR’s owned
inventory is approximately $130,000 and the net yield achieved on CSFR’s
leased portfolio is in the range of 6% to 7%.
* In January, the Company invested in a joint venture with a Co-Investment
Fund and a strategic partner that funded a $41 million first mortgage loan
secured by a 7 acre multifamily development parcel located in Florida. The
loan bears an interest rate of 12%; of which 3.5% may be paid-in-kind,
with a 1.5% origination fee and a 1% exit fee. The initial term of the
loan is three years. The Company’s share of the investment was 49.5%, or
$20 million.
* In January, the Company invested in a joint venture with a Co-Investment
Fund that originated a $22 million first mortgage loan secured by a
waterfront development parcel located in Florida. The loan bears an
interest rate of 14%; of which 4.5% may be paid-in-kind, with a 1%
origination fee and a 1% exit fee. Additionally, upon certain conditions
being achieved, the lender has the unilateral option to convert its
position into subordinated development financing. The initial term of the
loan is two years, plus two 6-month extensions. The Company’s share of the
investment was 50%, or $11 million.
* In February, the Company invested in a joint venture with Co-Investment
Funds that acquired a performing $59 million senior mortgage loan secured
by a retail asset in Florida. The loan was acquired for $46 million, or
78% of the unpaid principal balance. The loan bears a 6.0% fixed interest
rate with a 30-year amortization schedule and matures in May 2021. The
current yield is approximately 9% based on purchase price. The Company’s
share of this investment is 50%.
* In February, the Company, through a joint venture with Co-Investment
Funds, de-securitized the loans held in a CMBS trust, in which the joint
venture acquired the most senior bond in February 2012 for $226 million,
or 73% of par. Concurrent with the unwinding of the trust, the joint
venture sold a 40% participation interest in each of the approximately 220
multifamily first mortgage loans previously held in the CMBS trust to
another financial institution. The Company’s share of the original
purchase price was $25 million.
Full Year 2012 Operating Results
For the full year 2012, equity in income of unconsolidated joint ventures and
interest income and other income from affiliates contributed $68.7 million and
$38.4 million, respectively, to total income of $107.2 million. Total expenses
for the year were $36.6 million. Administrative expenses accounted for $6.3
million. During the full year 2012, the Company reported net income
attributable to common stockholders of $48.1 million, or $1.33 per basic share
and $1.32 per diluted share, compared to $1.47 per basic share and $1.46 per
diluted share for 2011. Core Earnings were $59.8 million, or $1.65 per basic
share and diluted share for 2012, compared to $1.50 per basic share and $1.49
per diluted share for 2011.
Common Stock Offerings
In December 2012, the Company completed a sale of 11,500,000 shares of its
common stock at a net price of $19.29 per share. The net offering proceeds,
after deducting underwriting discounts and commissions and offering costs
payable by the Company, were approximately $221 million. In January 2013, the
Company completed a sale of 11,500,000 shares of its common stock at a net
price of $20.20 per share. The net offering proceeds, after deducting
underwriting discounts and commissions and offering costs payable by the
Company, were approximately $232 million. The Company used a portion of the
net proceeds from both offerings to make an additional investment in CSFR and
a portion of the remaining proceeds to fund acquisitions of target assets.
Book Value
The Company’s GAAP book value per common share was $18.30 on December 31,
2012, compared to GAAP book value of $18.13 per common share on September 30,
2012. As of December 31, 2012, the Company had 53,091,623 shares of common
stock outstanding and as of March 6, 2013, the Company had 64,591,623 shares
of common stock outstanding.
Fair Value
If the Company accounted for all of its financial assets and liabilities at
fair value, the net fair value of the Company’s financial assets and
liabilities at December 31, 2012 would have been $56.1 million in excess of
the net carrying value of the Company’s financial assets and liabilities as of
the same date.
Common and Preferred Stock Dividends
The Company's Board of Directors declared a regular way quarterly dividend of
$0.35 per common share for the fourth quarter of 2012. The dividend was paid
on January 15, 2013, to stockholders of record on December 27, 2012.
In addition, the Company’s Board of Directors declared a special dividend for
2012 of $0.05 per common share in order to distribute the balance of the
Company’s estimated taxable income for 2012. The special dividend was paid on
January 15, 2013 to stockholders of record on December 27, 2012.
In addition, the Company's Board of Directors declared a cash dividend of
$0.53125 per share on the Company's 8.50% Series A Cumulative Perpetual
Preferred Stock with liquidation preference of $25 per share for the quarterly
period ending January 15, 2013. The dividend was paid on January 15, 2013, to
stockholders of record on December 31, 2012.
Core Earnings
Core Earnings, a non-GAAP financial measure, is used to compute incentive fees
payable to the Company’s manager and the Company believes it is a useful
measure for investors to better understand the Company’s recurring earnings
from its core business. For these purposes, “Core Earnings” mean the net
income (loss), computed in accordance with GAAP, excluding (i) non-cash equity
compensation expense, (ii) the expenses incurred in connection with the
formation of the Company and the Initial Public Offering, including the
initial and additional underwriting discounts and commissions, (iii) the
incentive fee, (iv) real estate depreciation and amortization, (v) any
unrealized gains or losses from mark to market valuation changes (other than
permanent impairment) that are included in net income, (vi) one-time events
pursuant to changes in GAAP and (vii) non-cash items which in the judgment of
management should not be included in Core Earnings. For clauses (vi) and
(vii), such exclusions shall only be applied after discussions between the
Manager and the Independent Directors and approval by a majority of the
Independent Directors.
Conference Call
Colony Financial, Inc. will conduct a conference call to discuss the results
on Thursday, March 7, 2013, at 7:00 a.m. PT / 10:00 a.m. ET. To participate in
the event by telephone, please dial (877) 407-0784 ten minutes prior to the
start time (to allow time for registration) and use conference ID 408775.
International callers should dial (201) 689-8560 and enter the same conference
ID number. For those unable to participate during the live broadcast, a replay
will be available beginning March 7, 2013 at 10:00 a.m. PT / 1:00 p.m. ET,
through March 21, 2013, at 8:59 p.m. PT / 11:59 p.m. ET. To access the replay,
dial (877) 870-5176 (U.S.), and use passcode 408775. International callers
should dial (858) 384-5517 and enter the same conference ID number. The call
will also be broadcast live over the Internet and can be accessed on the
Investor Relations section of the Company’s Web site at
www.colonyfinancial.com. A replay of the call will also be available for 90
days on the Company’s Web site.
About Colony Financial, Inc.
Colony Financial, Inc. is a real estate investment and finance company that is
focused on acquiring, originating and managing a diversified portfolio of
opportunistic real estate-related debt and equity investments at attractive
risk-adjusted returns. Our investment portfolio and target assets are
primarily composed of interests in: (i) secondary loans acquired at a discount
to par; (ii) new originations; and (iii) equity in single family homes to be
held for investment and rented to tenants. Secondary debt purchases may
include performing, sub-performing or non-performing loans (including
loan-to-own strategies). Colony Financial has elected to be taxed as a real
estate investment trust, or REIT, for U.S. federal income tax purposes. Colony
Financial is a component of the Russell 2000® and the Russell 3000® indices.
For more information, visit www.colonyfinancial.com.
Forward-Looking Statements
This press release may contain forward-looking statements within the meaning
of the federal securities laws. Forward-looking statements relate to
expectations, beliefs, projections, future plans and strategies, anticipated
events or trends and similar expressions concerning matters that are not
historical facts. In some cases, you can identify forward-looking statements
by the use of forward-looking terminology such as "may," "will," "should,"
"expects," "intends," "plans," "anticipates," "believes," "estimates,"
"predicts," or "potential" or the negative of these words and phrases or
similar words or phrases which are predictions of or indicate future events or
trends and which do not relate solely to historical matters. Forward-looking
statements involve known and unknown risks, uncertainties, assumptions and
contingencies, many of which are beyond the Company's control, that may cause
actual results to differ significantly from those expressed in any
forward-looking statement. Statements regarding the following subjects, among
others, may be forward-looking: business and investment strategy; investment
portfolio; projected operating results; ability to obtain financing
arrangements; financing and advance rates for the Company's target assets;
general volatility of the markets in which the Company invests; expected
investments; expected co-investment allocations and related requirements;
interest rate mismatches between the Company's target assets and its
borrowings used to fund such investments; changes in interest rates and the
market value of the Company's target assets; changes in prepayment rates on
the Company's target assets; effects of hedging instruments on the Company's
target assets; rates of default or decreased recovery rates on the Company's
target assets; the degree to which the Company's hedging strategies may or may
not protect the Company from interest and foreign exchange rate volatility;
impact of changes in governmental regulations, tax law and rates, and similar
matters; the Company's ability to maintain its qualification as a REIT for
U.S. federal income tax purposes; the Company's ability to maintain its
exemption from registration under the 1940 Act; availability of investment
opportunities in mortgage-related and real estate-related investments and
other securities; availability of qualified personnel; the Company's
understanding of its competition; and market trends in the Company's industry,
interest rates, real estate values, the debt securities markets or the general
economy.
All forward-looking statements reflect the Company’s good faith beliefs,
assumptions and expectations, but they are not guarantees of future
performance. Furthermore, the Company disclaims any obligation to publicly
update or revise any forward-looking statement to reflect changes in
underlying assumptions or factors, of new information, data or methods, future
events or other changes. For a further discussion of these and other factors
that could cause the Company’s future results to differ materially from any
forward-looking statements, see the section entitled “Risk Factors” in the
Company’s Annual Report on Form 10-K for the year ended December 31, 2011
filed with the Securities and Exchange Commission on March 9, 2012, the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2012
filed with the SEC on May 8, 2012, the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 2012 filed with the SEC on August 9, 2012, the
Company’s Quarterly Report on Form 10-Q for the quarter ended September 30,
2012 filed with the SEC on November 9, 2012, and other risks described in
documents subsequently filed by the Company from time to time with the SEC.
COLONY FINANCIAL, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
December 31,
2012 2011
ASSETS
Cash $ 170,199 $ 3,872
Investments in unconsolidated joint ventures 877,081 443,500
Loans held for investment, net 333,569 232,619
Beneficial interests in debt securities, 32,055 32,427
available-for-sale, at fair value
Other assets 22,663 15,101
Total assets $ 1,435,567 $ 727,519
LIABILITIES AND EQUITY
Liabilities:
Line of credit $ — $ 69,000
Secured financing 108,167 13,845
Accrued and other liabilities 12,944 16,304
Due to affiliates 4,984 3,788
Dividends payable 26,442 11,092
Total liabilities 152,537 114,029
Commitments and contingencies
Equity:
Stockholders’ equity:
Preferred stock, $0.01 par value, 8.5%
Series A Cumulative Redeemable Perpetual,
liquidation preference of $25 per share, 101 —
50,000,000 shares authorized, 10,080,000 and
no shares issued and outstanding,
respectively
Common stock, $0.01 par value, 450,000,000
shares authorized, 53,091,623 and 32,624,889 531 326
shares issued and outstanding, respectively
Additional paid-in capital 1,222,682 599,470
(Distributions in excess of) retained (5,167 ) 5,510
earnings
Accumulated other comprehensive income 5,184 (2,330 )
(loss)
Total stockholders’ equity 1,223,331 602,976
Noncontrolling interests 59,699 10,514
Total equity 1,283,030 613,490
Total liabilities and equity $ 1,435,567 $ 727,519
COLONY FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
Three Months Ended December Year Ended December 31,
31,
2012 2011 2012 2011
(Unaudited) (Unaudited)
Income
Equity in
income of $ 21,464 $ 12,852 $ 68,737 $ 46,720
unconsolidated
joint ventures
Interest 10,752 5,898 36,445 16,775
income
Other income
from 458 431 1,973 1,974
affiliates
Total income 32,674 19,181 107,155 65,469
Expenses
Management 6,706 2,548 18,982 8,477
fees
Investment 690 929 2,977 2,793
expenses
Interest 2,375 1,359 8,248 3,011
expense
Administrative 1,597 1,334 6,346 5,780
expenses
Total expenses 11,368 6,170 36,553 20,061
Other gain 603 (702 ) (232 ) (853 )
(loss), net
Income before 21,909 12,309 70,370 44,555
income taxes
Income tax 764 938 2,165 1,191
provision
Net income 21,145 11,371 68,205 43,364
Net income
attributable
to 2,261 305 6,194 1,104
noncontrolling
interests
Net income
attributable
to Colony 18,884 11,066 62,011 42,260
Financial,
Inc.
Preferred 5,355 — 13,915 —
dividends
Net income
attributable $ 13,529 $ 11,066 $ 48,096 $ 42,260
to common
stockholders
Net income per
common share:
Basic $ 0.31 $ 0.34 $ 1.33 $ 1.47
Diluted $ 0.31 $ 0.34 $ 1.32 $ 1.46
Weighted
average number
of common
shares
outstanding:
Basic 43,969,100 32,684,100 35,925,600 28,732,200
Diluted 43,969,100 32,684,100 35,943,200 28,993,700
COLONY FINANCIAL, INC.
CORE EARNINGS
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended December Year Ended December 31,
31,
2012 2011 2012 2011
GAAP net
income
attributable $ 13,529 $ 11,066 $ 48,096 $ 42,260
to common
stockholders
Adjustments
to GAAP net
income to
reconcile to
Core
Earnings:
Noncash
equity 2,870 19 6,133 116
compensation
expense
Incentive fee — 261 936 349
Depreciation 1,674 — 4,478 —
expense
Net
unrealized
(gain) loss (36 ) 510 119 518
on
derivatives
Core Earnings $ 18,037 $ 11,856 $ 59,762 $ 43,243
Basic $ 0.41 $ 0.36 $ 1.65 $ 1.50
Diluted $ 0.41 $ 0.36 $ 1.65 $ 1.49
Basic
weighted
average 43,969,100 32,684,100 35,925,600 28,732,200
number of
common shares
outstanding
Diluted
weighted
average 43,969,100 32,684,100 35,943,200 28,993,700
number of
common shares
outstanding
Contact:
Investor Contact:
Colony Financial, Inc.
Darren Tangen, 310-552-7230
Chief Operating Officer and Chief Financial Officer
or
Addo Communications, Inc.
Lasse Glassen, 310-829-5400
lasseg@addocommunications.com
or
Media Contact:
Owen Blicksilver P.R., Inc.
Caroline Luz, 203-656-2829
caroline@blicksilverpr.com
Sponsored Links
Advertisement
Advertisements
Sponsored Links
Advertisement
Rate this Page