MuniMae Announces 2012 Results
BALTIMORE, March 27, 2013 /PRNewswire/ -- Municipal Mortgage & Equity, LLC (OTC: MMAB) ("MuniMae" or "the Company,") filed its Annual Report on Form 10-K for the year ended December 31, 2012 (the "2012 Annual Report") with the SEC on March 26, 2013.
The Company reported that comprehensive income allocable to common shareholders, which includes both net income and total other comprehensive income, was $37.7 million for the year ended December 31, 2012 as compared to $39.4 million for the year ended December 31, 2011.
As of December 31, 2012, there was no longer substantial doubt regarding the Company's ability to continue as a going concern. This assessment was supported by cash flow projections indicating the Company's expected ability to meet its obligations as they become due. However, these projections reflected management's expectations and are not guarantees of future performance. As disclosed in the Company's prior annual reports and in its 2012 Annual Report, there are many risk factors, including in particular interest rate risk, which could negatively impact the Company's financial condition and operating results, in some cases, significantly.
Michael Falcone, MuniMae's Chief Executive Officer and President stated, "Our business was severely affected by the financial crisis, but we have been able to stabilize the Company through a combination of actions taken over the course of the past several years including business unit sales, cost reductions, and multiple debt restructurings. Now we look forward to an opportunity to create additional shareholder value. Today's announcements are the first steps in that journey."
The Company's bond portfolio increased in value by $34.3 million during the year ended December 31, 2012 and $33.0 million during the year ended December 31, 2011. These unrealized gains are recognized through a combination of net income and total other comprehensive income. Common equity was $44.9 million at December 31, 2012, representing an increase of $40.1 million from reported common equity of $4.8 million at December 31, 2011. Based on shares issued and outstanding and including employee and Director deferred shares issued at each year-end, the Company's common book value per share at December 31, 2012 was $1.06, compared to a common book value per share at December 31, 2011 of $0.11. Additional financial details are incorporated in the table below.
| Summary Financial Information |
|||||||||
| For the year ended December 31, |
|||||||||
| (in thousands, except per share data) |
2012 |
2011 |
Variance |
||||||
| 1 |
Adjusted interest income(1) |
$ |
72,038 |
$ |
83,898 |
$ |
(11,860) |
||
| 2 |
Income on preferred stock investment |
5,749 |
6,228 |
(479) |
|||||
| 3 |
Adjusted asset management fees(1) |
6,341 |
8,445 |
(2,104) |
|||||
| 4 |
Adjusted interest expense(1) |
(58,856) |
(72,167) |
13,311 |
|||||
| 5 |
Operating expenses(2) |
(28,711) |
(28,380) |
(331) |
|||||
| 6 |
Impairment on bonds |
(7,217) |
(12,815) |
5,598 |
|||||
| 7 |
Net loan loss recovery (provision) |
5,647 |
(858) |
6,505 |
|||||
| 8 |
Adjusted net gains on sale of bonds(1) |
4,718 |
13,465 |
(8,747) |
|||||
| 9 |
Adjusted net gains due to real estate consolidation and foreclosure(1) |
5,404 |
27,992 |
(22,588) |
|||||
| 10 |
Adjusted other net (losses) gains(1) |
(1,897) |
2,429 |
(4,326) |
|||||
| 11 |
Income tax expense |
(101) |
(239) |
138 |
|||||
| 12 |
Net income to common shareholders |
$ |
3,115 |
$ |
27,998 |
$ |
(24,883) |
||
| 13 |
Total other comprehensive income to common shareholders |
34,633 |
11,425 |
23,208 |
|||||
| 14 |
Comprehensive income to common shareholders |
$ |
37,748 |
$ |
39,423 |
$ |
(1,675) |
||
| 15 |
Common shareholders' equity at December 31, |
$ |
44,901 |
$ |
4,832 |
$ |
40,069 |
||
| 16 |
Common shares outstanding at December 31,(3) |
42,512 |
42,119 |
||||||
| 17 |
Book value at December 31, |
$ |
1.06 |
$ |
$0.11 |
$ |
0.95 |
||
| (1) Indicates a non-GAAP financial measure. See Exhibit A for a reconciliation between the adjusted measures presented above and the GAAP financial measure contained in the Consolidated Statements of Operations in the Company's 2012 Annual Report. |
|||||||||
| (2) Includes "Salaries and benefits", "General and administrative", "Professional fees" and "Other expenses" as reported on the Company's Consolidated Statements of Operations. |
|||||||||
| (3) Includes deferred shares held by directors and employees. |
|||||||||
The non-GAAP summary financial information presented above include amounts which are reallocated primarily from the following line items within the Company's audited GAAP financial statements: Revenue from consolidated funds and ventures ("CFVs"); Expenses from CFVs; Net gains related to CFVs; Equity in losses from LTPPs of CFVs; Net losses allocable to noncontrolling interests in CFVs and IHS; and Income from discontinued operations, net of tax. These lines are presented separately in the Consolidated Statements of Operations in the 2012 Annual Report, as required by GAAP. The footnotes to the financial statements in the 2012 Annual Report contain an attribution of these line items which provides investors with additional information regarding the nature of the Company's income or loss associated with its CFVs. The adjusted measures presented above are used by management and are disclosed supplementally to provide investors a tool to more easily review the impact of CFVs and discontinued operations on individual items of income and expense reflected in the Consolidated Statements of Operations in the Company's 2012 Annual Report.
Conference Call Information
The Company plans to host a conference call on Wednesday, April 3, 2013 at 5:00 p.m. ET to provide a business update and review financial results for 2012. The conference call will be webcast. All interested parties are welcome to join the live webcast, which can be accessed through the Company's web site at www.munimae.com, under Investor Relations. Participants may also join the conference call by dialing toll free 1-800-860-2442 or 1-412-858-4600 for international participants and 1-866-605-3852 for Canadian participants.
An archived replay of the event will be available one hour after the event through 9:00 a.m. on April 11, 2013, toll free at 1-877-344-7529, or 1-412-317-0088 for international participants (Passcode: 10026659). The conference call transcript will also be archived on our website through July 1, 2013.
The Form 10-K is posted to MuniMae's web site at www.munimae.com, under Investor Relations, and is available at the Securities and Exchange Commission's web site at www.sec.gov.
Cautionary Statement Regarding Forward-Looking Statements
This Release contains forward-looking statements intended to qualify for the safe harbor contained in Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements often include words such as "may," "will," "should," "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "seek," "would," "could," and similar words or are made in connection with discussions of future operating or financial performance.
Forward-looking statements reflect our management's expectations at the date of this Release regarding future conditions, events or results. They are not guarantees of future performance. By their nature, forward-looking statements are subject to risks and uncertainties. Our actual results and financial condition may differ materially from what is anticipated in the forward-looking statements. There are many factors that could cause actual conditions, events or results to differ from those anticipated by the forward-looking statements contained in this Release. These factors include changes in market conditions that affect the willingness of potential investors or lenders to provide us with debt or equity, changes in market conditions that affect the value or marketability of assets we own, changes in market conditions or other factors that affect our access to cash that we may need to meet our commitments to other persons, changes in interest rates or other conditions that affect the value of mortgage loans we have made, changes in interest rates that affect our cost of funds, tax laws, environmental laws or other conditions that affect the value of the real estate underlying mortgage loans we own, and changes in tax laws or other things beyond our control that affect the tax benefits available to us and our investors. Readers are cautioned not to place undue reliance on forward-looking statements. We have not undertaken to update any forward-looking statements in this Release.
MUNIMAE: INTEGRITY. INNOVATION. SERVICE.
www.MuniMae.com
| EXHIBIT A |
For the year ended December 31, |
||||||
| 2012 |
2011 |
||||||
| Adjusted Interest Income |
|||||||
| 1 |
Interest income on the Consolidated Statements of Operations ("Income Statement") |
$ |
65,791 |
$ |
82,167 |
||
| 2 |
Note 16-Discontinued Operations - Interest income |
1,034 |
(b) |
266 |
(b) |
||
| 3 |
Note 17-CFVs-Interest income |
5,213 |
(a) |
1,465 |
(a) |
||
| 4 |
Total |
$ |
72,038 |
$ |
83,898 |
||
| Adjusted Asset Management Fees |
|||||||
| 5 |
Note 17 -CFVs-Asset management fees |
$ |
5,459 |
(a) |
$ |
7,532 |
(a) |
| 6 |
Reported through Other income on the Income Statement |
882 |
913 |
||||
| 7 |
Total |
$ |
6,341 |
$ |
8,445 |
||
| Adjusted Interest Expense |
|||||||
| 8 |
Total interest expense on the Income Statement |
$ |
(26,659) |
$ |
(35,526) |
||
| 9 |
Interest expense on the Income Statement |
(18,565) |
(21,498) |
||||
| 10 |
Income allocable to perpetual preferred shareholders on the Income Statement |
(9,443) |
(9,598) |
||||
| 11 |
Reported through Net losses on derivatives on the Income Statement |
(4,189) |
(5,545) |
||||
| 12 |
Total |
$ |
(58,856) |
$ |
(72,167) |
||
| Adjusted Net Gains on Sale of Bonds |
|||||||
| 13 |
Reported as Net gains on bonds on the Income Statement |
$ |
1,397 |
$ |
13,465 |
||
| 14 |
Note 16-Discontinued Operations-Net gains on bonds |
3,321 |
(b) |
− |
(b) |
||
| 15 |
Total |
$ |
4,718 |
$ |
13,465 |
||
| Adjusted Net Gains Due to Real Estate Consolidation and Foreclosure |
|||||||
| 16 |
Net gains due to real estate consolidation and foreclosure on the Income Statement |
$ |
5,404 |
$ |
13,329 |
||
| 17 |
Note 16-Discontinued Operations-Net gains due to real estate consolidation |
− |
(b) |
14,663 |
(b) |
||
| 18 |
Total |
$ |
5,404 |
$ |
27,992 |
||
| Adjusted Other Net (Losses) Gains |
|||||||
| 19 |
Net gains (losses) on loans on the Income Statement |
$ |
332 |
$ |
(835) |
||
| 20 |
Other (losses) gains on the Income Statement |
(1,774) |
752 |
||||
| 21 |
Reported through Other income on the Income Statement |
1,655 |
2,186 |
||||
| 22 |
Reported through Net losses on derivatives on the Income Statement |
2,541 |
(3,454) |
||||
| 23 |
Note 16-Discontinued Operations-Income from REO operations |
57 |
(b) |
916 |
(b) |
||
| 24 |
Note 16-Discontinued Operations-Other income |
497 |
(b) |
590 |
(b) |
||
| 25 |
Note 16-Discontinued Operations-Guarantee expense |
(1,554) |
(b) |
(60) |
(b) |
||
| 26 |
Note 16-Discontinued Operations-Net gains on sale of real estate |
− |
(b) |
3,512 |
(b) |
||
| 27 |
Note 17 -CFVs-Guarantee fees |
1,383 |
(a) |
1,374 |
(a) |
||
| 28 |
Note 17 -CFVs-Equity in losses from LTPPs |
(4,312) |
(a) |
(2,770) |
(a) |
||
| 29 |
Note 17 -CFVs-Equity in income from SA Fund |
336 |
(a) |
200 |
(a) |
||
| 30 |
Note 17 -CFVs-Other expenses |
(1,582) |
(a) |
(312) |
(a) |
||
| 31 |
Equity in income from IHS reported through an allocation of income |
524 |
(a) |
330 |
(a) |
||
| 32 |
Total |
$ |
(1,897) |
$ |
2,429 |
||
| Activity Related to CFVs |
|||||||
| 33 |
Revenue from CFVs on the Income Statement |
$ |
25,084 |
$ |
6,975 |
||
| 34 |
Expenses from CFVs on the Income Statement |
(41,359) |
(31,843) |
||||
| 35 |
Net gains related to CFVs on the Income Statement |
12,441 |
12,241 |
||||
| 36 |
Equity in losses from LTPPs of CFVs on the Income Statement |
(39,391) |
(35,751) |
||||
| 37 |
Net losses allocable to noncontrolling interest in CFVs and IHS-continuing operations on the Income Statement |
50,246 |
56,197 |
||||
| 38 |
Total |
$ |
7,021 |
$ |
7,819 |
||
| 39 |
Sum of (a)s |
$ |
7,021 |
$ |
7,819 |
||
| Discontinued Operations |
|||||||
| 40 |
Income from discontinued operations, net of tax on the Income Statement |
$ |
2,382 |
$ |
19,679 |
||
| 41 |
Net losses allocable to noncontrolling interest in CFVs and IHS-discontinued operations on the Income Statement |
973 |
208 |
||||
| 42 |
Total |
$ |
3,355 |
$ |
19,887 |
||
| 43 |
Sum of (b)s |
$ |
3,355 |
$ |
19,887 |
||
SOURCE Municipal Mortgage & Equity, LLC
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