Capmark Financial Group Inc. Announces 2013 Results

  Capmark Financial Group Inc. Announces 2013 Results  Business Wire  HORSHAM, Pa. -- March 28, 2014  Capmark Financial Group Inc. (the “Company”) today issued its Report as of and for the years ended December 31, 2013 and December 31, 2012. The Company reported net income of $91.7 million for the year ended December 31, 2013 and had consolidated total assets of $681.1 million, consolidated total liabilities of $273.8 million, and stockholders’ equity of $373.6 million as of December 31, 2013.  Highlights for 2013 were:    *Total cash received from asset collections and revenue was $718 million.     Included in the total cash received, the Company realized total proceeds     of $597 million from the monetization of loan and REO assets, $36 million     from investment securities and $66 million of distributions from real     estate equity and debt funds.   *The Company achieved net consolidated income of $92 million primarily as a     result of net gains on loans, investments and real estate of $106 million     and interest income of $30 million partially offset by $52 million of     noninterest expense. The net gains included a $41 million realized gain on     interests in collateralized debt obligations that were redeemed or sold.   *The Company repaid all outstanding deposits at Capmark Bank, which caused     its deposit insurance to terminate as of December 31, 2013, after which it     was no longer a regulated bank. The shareholder’s equity of Capmark Bank     was $75.9 million as of December 31, 2013. On January 1, 2014, the     articles of organization of Capmark Bank were amended to change its name     to Capmark Utah Inc., which continues to be a wholly-owned subsidiary of     CFGI. Capmark Utah Inc. no longer has employees or an independent board of     directors.   *The Company made aggregate distributions to stockholders of $1.05 billion,     or $10.50 per share, in 2013 and ended the year with $374 million of     stockholders’ equity. Aggregate distributions to stockholders since     emergence from bankruptcy, including those in 2013, have been $25.00 per     share.   *The Company paid an additional $74 million to prepetition creditors,     including $23 million under the settlement agreement with the Japanese     lenders, $7 million under the settlement agreement with creditors of     Crystal Ball Holdings of Bermuda Limited and $44 million from the disputed     claims reserve. The settlement agreements and the Company’s obligations     thereunder were terminated.  On March 5, 2014, the Company entered into an agreement (the “Investment Agreement”) with Centerbridge Capital Partners II, L.P. and certain of its affiliates (“Centerbridge”) for a strategic investment in the Company by Centerbridge, subject to certain terms and conditions. The closing under the Investment Agreement is subject to certain conditions, including approval by the Company’s stockholders of an amendment and restatement of the Company’s existing articles of incorporation required for Centerbridge to make its investments.  Consolidated Balance Sheet  The Company had consolidated total assets of $681.1 million and $2.9 billion as of December 31, 2013 and 2012, respectively, primarily comprised of a portfolio of loans, real estate, real estate-related assets and cash and cash equivalents. Capmark Bank had assets of $83.0 million and $1.4 billion as of the same dates. Assets totaling $135.2 million and $253.5 million were associated with discontinued operations as of December 31, 2013 and 2012, respectively.  The Company had consolidated total liabilities of $273.8 million and $1.5 billion as of December 31, 2013 and 2012, respectively. The Company had liabilities of $77.4 million and $114.7 million associated with discontinued operations as of December 31, 2013 and 2012, respectively.  Total stockholders’ equity was $373.6 million at December 31, 2013 compared to $1.3 billion at December 31, 2012. The decrease is due primarily to the $1.05 billion of cash distributions to holders of the Company’s common stock.  Consolidated Results of Operations  The Company had income from continuing operations before income taxes of $99.0 million in the year ended December 31, 2013, primarily due to $127.7 million of noninterest income and $30.0 million of interest income partially offset by $52.4 million of noninterest expense and $6.3 million of interest expense. Noninterest income of $127.7 million primarily included $41.5 million of realized gains on the dispositions of real estate investments, $40.6 million of realized gains on the redemption and sale of interests in collateralized debt obligations, $23.7 million of realized gains on full or partial dispositions of loans held for sale and $21.0 million due primarily to unrealized gains on real estate equity investment funds and joint ventures. Interest income in the year ended December 31, 2013 included the recognition of $5.5 million of previously deferred interest on loans held for sale. The $52.4 million of noninterest expense included $25.9 million of compensation and benefits costs and $19.6 million of professional fees. The $6.3 million of interest expense primarily included $20.9 million of contractual interest expense from deposit liabilities at Capmark Bank offset by $17.4 million from the accretion of the fresh start accounting premium for the deposit liabilities.  Liquidity  As of December 31, 2013, the Company’s continuing operations had $138.4 million in total cash and cash equivalents (including restricted cash). The following table summarizes the cash, cash equivalents and restricted cash from continuing operations (in thousands):                                                           Cash, Cash Equivalents and             December 31, 2013     December 31, 2012 Restricted Cash Non-Capmark Bank: Cash and cash equivalents              $     99,086          $    182,726 Restricted cash                              11,861               75,219 Capmark Bank cash and cash                  27,449              1,296,156 equivalents Total cash, cash equivalents and restricted cash attributable to        $     138,396         $    1,554,101 continuing operations                                                                The Company’s primary sources of liquidity from the existing assets are expected to be (1)distributions received from equity investments, (2) proceeds from the resolution of loans, including par payoffs and discounted payoffs received in connection with loan workout efforts and (3) sales of other assets in its portfolio. The Company expects to generate sufficient liquidity from the existing assets to meet its needs for cash in its operations over the next 12 months, including paying its operating expenses.  The following table summarizes the components of restricted cash from continuing operations (in thousands):                                                           Restricted Cash                        December 31, 2013     December 31, 2012 Distribution escrow                    $      9,480          $      7,462 Bankruptcy disputed administrative, priority and                  501                   8,865 convenience class claims escrow Cash from consolidated variable               —                     49,663 interest entities Other                                        1,880                9,229 Restricted cash from continuing        $      11,861         $      75,219 operations                                                                       In 2013, the Company paid cash distributions to the holders of the Company’s common stock as follows:                                                                                          Distribution Record Date            Distribution Paid                                               Amount Per Share March 15, 2013         March 22, 2013         $4.50 June 17, 2013          June 21, 2013          2.50 September 23, 2013     September 27, 2013     1.65 December 27, 2013      December 30, 2013      1.85                                                 The Company does not anticipate making additional distributions to shareholders in the near term. The terms of the Investment Agreement with Centerbridge contain certain prohibitions on future distributions by the Company and certain of its subsidiaries. If the Investment Agreement with Centerbridge does not close, the Company will evaluate how to utilize its cash, including whether to make distributions to stockholders.  Supplemental Financial Information  The Company’s Report as of and for the years ended December 31, 2013 and December 31, 2012 and related supplemental financial information may be found on the Company’s website (www.capmark.com) under the heading “Financial Reporting.”  Investor Conference Call  The Company will host an investor call to be broadcast live over the internet on April 1, 2014 at 2:00 p.m. Eastern Time to discuss, among other items, the Report as of and for the years ended December 31, 2013 and December 31, 2012.  To listen to the investor call, please go to www.capmark.com under the heading “Investor Relations” at least fifteen minutes prior to the scheduled start time to download and install any necessary audio software. For those who are unable to listen to the live broadcast, an archived replay will be available on the website for a period of time. Investors who have questions for the Company’s management can participate in the conference call by dialing the following:    *Toll Free: 877-254-2825   *Conference ID #20518362  Forward-Looking Statements  Certain statements in this release may constitute forward-looking statements. These statements are based on management’s current expectations and beliefs but are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Such forward-looking statements are made only as of the date of this release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or changes in events, conditions, or circumstances on which any such statement is based.  About Capmark®:  Capmark is a real estate finance company focused on the management of its commercial real estate-related assets and businesses with a view to maximizing their value. Capmark is headquartered in Horsham, Pennsylvania and operates principally in North America. For more information, visit www.capmark.com   CAPMARK FINANCIAL GROUP INC. Consolidated Balance Sheet (in thousands, except share amounts)                                        December 31, 2013   December 31, 2012 Assets Cash and cash equivalents              $     126,535         $   1,478,882 Restricted cash (1)                          11,861              75,219 Accounts and other receivables (1)           61,019              51,496 Investment securities available              4,974               4,611 for sale Loans held for sale (1)                      156,870             591,814 Real estate investments (1)                  —                   154,112 Equity investments                           177,534             248,350 Other assets (1)                             7,172               13,048 Assets of discontinued operations           135,177            253,518     (1) Total assets                           $     681,142         $   2,871,050   Liabilities and Equity Liabilities: Secured and other borrowings (1)             130,449             222,062 Deposit liabilities                          —                   1,018,601 Other liabilities (1)                        65,922              127,457 Liabilities of discontinued                 77,438             114,719     operations (1) Total liabilities                           273,809            1,482,839   Commitments and Contingent Liabilities Equity: Common stock, $.001 par value; shares authorized — 110,000,000; shares issued and outstanding —              100                 100 100,182,419 at December 31, 2013 and 100,242,722 at December 31, 2012 Capital paid in excess of par                189,820             1,240,834 value Retained earnings                            182,015             90,313 Accumulated other comprehensive             1,627              (4,885     ) income (loss), net of tax Total Capmark Financial Group Inc.           373,562             1,326,362 stockholders’ equity Noncontrolling interests                    33,771             61,849      Total equity                                407,333            1,388,211   Total liabilities and equity           $     681,142         $   2,871,050    ____________________        The following table presents assets of consolidated variable interest        entities (“VIEs”) included in each balance sheet line item that can be        used only to settle the obligations of the consolidated VIE and (1)   liabilities of the consolidated VIE included in each balance sheet line        item for which creditors or other interest holders do not have recourse        to the general credit of Capmark Financial Group Inc. and its        subsidiaries.                                                                                           December     December                    December    December                31,          31,                         31,         31,                 2013         2012                        2013        2012 Assets                                  Liabilities Restricted                              Secured and cash           $  —         $  49,663   other           $  —        $  4,903                                         borrowings Accounts and                            Other other             —            1,055    liabilities        —           2,011 receivables Loans held for                          Liabilities of sale              —            181,794  discontinued      7,929      13,580                                         operations Real estate       —            22,225   Total           $  7,929    $  20,494 investments                             liabilities Other assets      —            1,482 Assets of discontinued     41,685      65,606 operations Total assets   $  41,685    $  321,825                                                                        CAPMARK FINANCIAL GROUP INC. Consolidated Statement of Comprehensive Income (in thousands, except per share data)                                        Year ended          Year ended                                        December 31, 2013     December 31, 2012 Net Interest Income Interest income                        $   29,999            $   108,985 Interest expense                          6,286               48,675     Net interest income                       23,713              60,310     Noninterest Income Net gains on loans                         26,290                179,019 Net gains (losses) on investments          79,453                (10,733   ) and real estate Other losses, net                          (5,511    )           (12,226   ) Equity in income of joint ventures         24,260                25,452 and partnerships Fee revenue                                341                   3,527 Net real estate investment and            2,899               (333      ) other income Total noninterest income                  127,732             184,706    Net revenue                               151,445             245,016    Noninterest Expense Compensation and benefits                  25,943                63,580 Professional fees                          19,624                32,034 Occupancy and equipment                    2,251                 9,498 Other expenses                            4,578               27,599     Total noninterest expense                 52,396              132,711    Income from continuing operations          99,049                112,305 before income tax benefit Income tax benefit                        (851      )          (1,700    ) Income from continuing operations          99,900                114,005 after income tax benefit Loss from discontinued operations,        (22,630   )          (44,329   ) net of tax Net income                                 77,270                69,676 Plus: Net loss attributable to            14,432              52,288     noncontrolling interests Net income attributable to Capmark     $   91,702           $   121,964    Financial Group Inc. Other comprehensive income (loss) Net change in unrealized gains and         (1,923    )           2,300 losses on investment securities Net foreign currency translation          8,435               (5,568    ) Other comprehensive income (loss)         6,512               (3,268    ) Comprehensive income attributable      $   98,214           $   118,696    to Capmark Financial Group Inc. Basic and diluted net income per       $   1.15              $   1.67 share - continuing operations Basic and diluted net income per share attributable to Capmark             0.92                1.22       Financial Group Inc. Basic weighted average shares              99,728                99,607 outstanding Diluted weighted average shares            99,761                99,734 outstanding                                                                               CAPMARK FINANCIAL GROUP INC. Consolidated Statement of Changes in Stockholders’ Equity (in thousands, except number of shares)                                        Year ended          Year ended                                        December 31, 2013     December 31, 2012 Common Stock Number of shares outstanding at           100,242,722           100,052,475 beginning of period Additional shares issued                  —                     243,767 Treasury shares retired                  (60,303      )       (53,520      ) Number of shares outstanding at          100,182,419         100,242,722   end of period Common Stock Balance at beginning of period         $  100                $  100 Additional shares issued (retired)       —                   —             Balance at end of period                 100                 100           Capital Paid in Excess of Par Value Balance at beginning of period            1,240,834             2,692,602 Additional shares issued                  —                     — Stockholder distributions                 (1,052,548   )        (1,454,296   ) Treasury shares retired                   (267         )        (648         ) Stock-based compensation                 1,801               3,176         Balance at end of period                 189,820             1,240,834     Retained Earnings (Accumulated Deficit) Balance at beginning of period            90,313                (31,651      ) Net income attributable to Capmark       91,702              121,964       Financial Group Inc. Balance at end of period                 182,015             90,313        Accumulated Other Comprehensive Income (Loss), net of tax Balance at beginning of period            (4,885       )        (1,617       ) Other comprehensive income (loss)        6,512               (3,268       ) Balance at end of period                 1,627               (4,885       ) Total Capmark Financial Group Inc.       373,562             1,326,362     Stockholders’ Equity Noncontrolling Interests Balance at beginning of period            61,849                178,960 Net loss attributable to                  (14,432      )        (52,288      ) noncontrolling interests Other (includes impact of sale of        (13,646      )       (64,823      ) discontinued operations assets) Balance at end of period                 33,771              61,849        Total Equity                           $  407,333           $  1,388,211                                                                                     CAPMARK FINANCIAL GROUP INC. Consolidated Statement of Cash Flows (in thousands)                                        Year ended          Year ended                                        December 31, 2013     December 31, 2012 Operating Activities of Continuing Operations Net income                             $  77,270             $  69,676 Net loss from discontinued               (22,630     )        (44,329     ) operations Net income from continuing                99,900                114,005 operations Adjustments to reconcile net income from continuing operations to net cash provided by operating activities of continuing operations: Net gains                                 (100,232    )         (156,060    ) Net accretion of fresh start              (17,395     )         (65,242     ) accounting adjustments Equity in net gains of investees          (20,454     )         (22,970     ) and cash return on investment Stock-based compensation expense          1,801                 3,380 Other, net                                1,540                 9,430 Net change in assets and liabilities which provided (used) cash: Accounts and other receivables            (1,951      )         91,306 Other assets                              5,344                 90,493 Other liabilities                         (58,090     )         (108,017    ) Current taxes payable                     (19         )         111 Proceeds from sales of/payments          455,407             3,075,582    from loans held for sale Net cash provided by operating activities of continuing                 365,851             3,032,018    operations Investing Activities of Continuing Operations Net decrease in restricted cash           63,358                54,045 Proceeds from sales of investment securities classified as available        46,541                18,916 for sale Repayments of investment securities classified as available        176                   570,657 for sale Purchases of investment securities        (11,027     )         — classified as available for sale Proceeds from sales of real estate        195,575               281,577 investments Proceeds from sales of/capital distributions from equity                 88,829                101,463 investments Other investing activities, net          1,782               (1,689      ) Net cash provided by investing activities of continuing                 385,234             1,024,969    operations Financing Activities of Continuing Operations Repayments of debt                        —                     (738,959    ) Repayments of secured and other           (91,613     )         (427,810    ) borrowings Transfer of deposit liabilities           —                     (874,026    ) Repayment of deposit liabilities          (1,001,206  )         (1,909,451  ) Distributions to stockholders             (1,052,548  )         (1,454,296  ) Other financing activities, net          (9,955      )        2,348        Net cash used in financing activities of continuing                 (2,155,322  )        (5,402,194  ) operations Effect of Foreign Exchange Rates         (1,024      )        (89         ) on Cash Discontinued Operations Net cash used in operating activities of discontinued                (6,757      )         (18,192     ) operations Net cash (used in) provided by investing activities of                   (7,496      )         259,613 discontinued operations Net cash used in financing activities of discontinued               (22,340     )        (65,016     ) operations Net cash (used in) provided by           (36,593     )        176,405      discontinued operations Net Decrease in Cash and Cash             (1,441,854  )         (1,168,891  ) Equivalents Cash and Cash Equivalents,               1,568,920           2,737,811    Beginning of Period(1)(2) Cash and Cash Equivalents, End of      $  127,066           $  1,568,920    Period(2)(3)                                                              Supplemental Disclosures of Cash Flow Information: Income taxes refunded, net             $  877                $  11,248 Interest paid                             34,849                143,276 Non-cash Investing and Financing Activities: Transfer of loans held for sale to        —                     20,309 real estate Transfer of real estate to loans          —                     14,549 held for sale  ____________________ Notes:            Cash and cash equivalents exclude restricted cash of $232.7 million from (1)   continuing and discontinued operations and include non-restricted cash       of discontinued operations of $4.4 million, respectively as of December       31, 2011.              Cash and cash equivalents exclude restricted cash of $150.4 million from (2)   continuing and discontinued operations and include non-restricted cash       of discontinued operations of $90.0 million, respectively as of December       31, 2012.              Cash and cash equivalents exclude restricted cash of $93.9 million from (3)   continuing and discontinued operations and include non-restricted cash       of discontinued operations of $0.5 million, respectively as of December       31, 2013.         Contact:  Capmark Financial Group Inc. Thomas L. Fairfield, 215-328-1555  
Press spacebar to pause and continue. Press esc to stop.