Exhibit 99.2
| Supplemental Financial Data First Quarter 2018 |
| This presentation contains statements that constitute "forward-looking statements," as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. These statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements; Sutherland Asset Management Corporation (the "Company") can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from the Company's expectations include those set forth in the Risk Factors section of the most recent Annual Report on Form 10-K filed with the SEC and other reports filed by the Company with the SEC, copies of which are available on the SEC's website, www.sec.gov. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law. This presentation includes certain non-GAAP financial measures, including Core Earnings. These non-GAAP financial measures should be considered only as supplemental to, and not as superior to, financial measures in accordance with GAAP. Please refer to Appendix A for the most recent GAAP information. This presentation also contains market statistics and industry data which are subject to uncertainty and are not necessarily reflective of market conditions. These have been derived from third party sources and have not been independently verified by the Company or its affiliates. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. All data is as of March 31, 2018, unless otherwise noted. 1 DISCLAIMER |
| Net income of $18.5 million(1), or $0.56 per common share Core earnings of $15.5 million(1), or $0.47 per common share Declared dividend of $0.37 per share Q1 Return on Equity(2) of 13.1% Q1 Core Return on Equity(3) of 11.0% Q1 Dividend Yield(4) of 9.8% SBC loan originations of $211.6 million SBA loan originations of $48.3 million Residential mortgage loan originations of $439.0 million Acquired $142.2 million of SBC loans Completed the securitization of $165.0 million SBC loans and sold $148.5 million of senior bonds at a weighted average pass-through rate of 3.8% Adjusted net book value(6) of $16.88 per common share as of March 31, 2018 Loans increased by 4.4% to $2.2 billion(7) Income to Core Earnings Q1 Dividend yield for the period based on the 3/31/2018 closing share price of $15.15 Represents fully committed amounts Excludes the equity component of our 2017 convertible note issuance (4) (5) (6) (7) Represents carrying value of loans (8) Represents unpaid principal balance of loans Servicing portfolio increased by 5.1% to $7.9 billion(8) (1)Inclusive of non-controlling interest (2)Return on Equity is an annualized percentage equal to quarterly net income over the average monthly total stockholders’ equity for the period (3)Core Return on Equity is an annualized percentage equal to core earnings over the average monthly total stockholders’ equity for the period. Refer to slide 20 for a reconciliation of GAAP Net2 BALANCE SHEET LOAN ORIGINATIONS(5) / ACQUISITIONS RETURNS EARNINGS / DIVIDENDS FIRST QUARTER 2018 HIGHLIGHTS |
| GAAP ROE (2) Core ROE (2) Core Levered Levered Equity Q4'17(4) Q4'17(4) Q1'18 Q1'18 Segment Yield (1) Allocation Yi eld (1) Loan Acquisitions SBC Originations SBA Originations, Acquisitions, & Servicing 56.1 % 20.1 % 56.1 % 20.1 % 13.9 % 40.6 % 30.4 % 30.4 % 26.0 % (3) 32.4 % 18.2 % 19.5 % Residential Mortgage Banking Corporate finance and non-earning assets, net Gross return on equity Realized & unrealized gains, net Other income and expenses, net Investment advisory fees Provision for income taxes Return on equity unrealized gains (losses) on loans held for sale and servicing income net of interest expense and amortization of deferred financing costs on an annualized basis. (3) (4) ROE based on net income before tax of the Residential Mortgage Banking business line divided by the business line’s equity. Prior period updated to conform with current period presentation. (1) Levered yields include interest income, accretion of discount, MSR creation, income from our unconsolidated joint venture, realized gains (losses) on loans held for sale,3 (2) GAAP ROE is based on GAAP Net Income, while Core ROE is based on Core Earnings, which adjusts GAAP Net Income for the items in slide 20. (2.0) 16.5 % 4.3 (10.0) (1.5) (0.4) 8.9 % (5.7) 21.7 % 3.7 (10.9) (1.7) (1.8) 11.0 % (2.0) 16.5 % 4.3 (10.0) (1.5) (0.2) 9.1 % (6.4) 23.8 % 3.7 (10.9) (1.7) (1.8) 13.1 % 18.5 % 27.4 % 18.5 % 30.2 % RETURN ON EQUITY |
| 120 100 $87.2 80 $75.4 60 40 20 0 Q1'17 Q2'17 SBA Q3'17 Freddie Mac Q4'17 Q1'18 Conventional Transitional Fully committed ($ in millions) (1) (1) Origination volumes are based on fully committed amounts4 Highlights • Total SBC loan originations of $211.6 million for the quarter • SBA loan originations increased by $10.0 million, or 26%, for the quarter • Strong Q2 2018 origination pipeline $111.4$110.6 $105.2 $91.0 $78.0 $69.7 $39.5 $47.4 $46.7 $38.3 $48.3 $39.3 $38.9 $26.0 $28.5 $23.0 $29.7 SBC ORIGINATION VOLUME BY PRODUCT TYPE $126.9 |
| ► Acquired $142.2 million of SBC loans, comprised of primarily performing loans. ► Funded $250.5 million(1) of SBC and SBA loan originations. HELD FOR SALE TOTAL HELD FOR INVESTMENT SBC TRANSITIONAL SBA(7) SBA(7) FREDDIE MAC + 285 (2) $ in millions (4) (5) (6) Gross yield equals contractual interest rates and accretion of discount based on the Company’s estimates of loan performance, where applicable Weighted average advance rate of all assets of this loan type currently financed on the Company’s facilities Weighted average debt cost of all assets of this loan type currently financed on the Company’s facilities Gross investments(2) Number of loans Average balance(3) Gross Yield(4) Weighted average duration(3) FX / ARM Avg. Advance Rate(5) Debt Cost(6) $142.2 $23.1 $68.0 $12.2 $36.6 $110.6 $250.5 179 7 18 66 66 45 136 $0.8 $3.3 $3.8 $0.2 $0.5 $2.5 $1.2 6.7% 5.8% 6.7% 6.5% 6.5% 4.3% 5.5% 6 years 10 years 3 years 19 years 19 years 14 years 11 years 81% / 19% 100% / 0% 0% / 100% 0% / 100% 0% / 100% 56% / 44% 29% / 71% 77% 60% 63% 55% 55% 100% 76% 3M Libor + 273 3M Libor + 254 3M Libor + 277 3M Libor + 350 3M Libor + 350 1M Libor + 175 1M / 3M Libor (1)Represents actual disbursements during the quarter.(7) SBA loan counts include the guaranteed and unguaranteed loan portion.5 (3)Based on fully funded loan amount LOANS ACQUISITIONS(2) ORIGINATIONS(2) Q1 2018 QUARTERLY SBC INVESTMENT ALLOCATION ► Total funded investments of $392.7 million added during the quarter. |
| CURRENT QUARTER HIGHLIGHTS GROSS LEVERED YIELD ► Originations of $211.6 million(1), 60% of loans held-for-investment are floating rate 22.5% 20.5% 18.5% 16.5% 14.5% 12.5% 10.5% 8.5% 6.5% 4.5% 2.5% ► Gains on sales of Freddie Mac loans of $2.1 million (2) ► Origination pipeline of $477.9 million ► $223.0 million of Freddie Mac loans ► $163.1 million of transitional loans ► $91.8 million of conventional SBC loans Q1 '17 Q2 '17 Q3 '17 (5) Q4 '17 Q1 '18 (6) (3) $ in millions, as of quarter end. (5) (6) Includes interest income, accretion of discount, and servicing income net of interest expense and amortization of deferred financing costs. Includes realized and unrealized gains (losses) on loans held for sale and MSR creation. Gross Levered Yield (ex. Gains)Gains on Loans, held for sale (1) Represents fully committed amounts. (2) As of April 30, 2018, including April 2018 fundings.6 (4) Represents fixed rate loans that have been securitized. 4.2% 3.3% 4.5% 15.9% 13.8% 1.5% 1.7% 11.2% 11.2% 11.4% Portfolio Me trics (B alance Shee t) Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Number of loans 297 326 368 365 357 (3) Unpaid Principal Balance $785 $971 $1,068 $1,094 $1,120 (3) Carrying Value $801 $989 $1,088 $1,108 $1,132 Weighted Average LTV 62% 63% 60% 61% 61% Weighted Average Coupon 6.1% 6.2% 6.3% 6.2% 6.4% Weighted Average Maturity 5 y ears 5 y ears 5 y ears 5 y ears 5 y ears (3) Weighted Average Principal Balance $2.6 $3.0 $2.9 $3.0 $3.1 Percentage of loans fixed / floating 73% / 27% 62% / 38% 64% / 36% 58% / 42% 56% / 44% (4) Percentage of fixed, match funded 76.8% 70.5% 60.2% 60.4% 82.2% Percentage of loans 30+ days delinquent 1.2% 0.9% 0.2% 1.4% 1.3% SBC ORIGINATIONS - SEGMENT SNAPSHOT |
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| CURRENT QUARTER HIGHLIGHTS GROSS LEVERED YIELD 32.5% ► $33.6 million of SBA secondary market loans sales, with an average sale premium of 11.6% 27.5% ► Originations of $48.3 million(1) 22.5% 17.5% ► Origination pipeline in excess of $120 million SBA loans(2) and an acquisition pipeline of $16.0 million in SBA loans 12.5% 7.5% 2.5% Q1 '17 Q2 '17 Q3 '17 (4) Q4 '17 Q1 '18 (5) Gross Levered Yield (ex. Gains) Gains on Loans, held for sale (2) As of April 30, 2018, including April 2018 fundings. (4) (5) Includes interest income, accretion of discount, and servicing income net of interest expense and amortization of deferred financing costs. Includes realized and unrealized gains (losses) on loans held for sale and MSR creation. (1) Represents fully committed amounts.7 (3) $ in millions, as of quarter end. 8.8% 10.6% 3.2% 5.9% 25.6% 6.4% 21.9% 21.7% 19.8% 17.0% Portfolio Me trics (B alance Shee t) Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Number of loans 2,398 2,280 2,194 2,106 2,062 (3) Unpaid Principal Balance $588 $549 $530 $508 $502 (3) Carrying Value $521 $486 $471 $455 $452 Weighted Average LTV 80% 78% 78% 78% 78% Weighted Average Coupon 5.4% 5.7% 5.9% 5.9% 6.2% Weighted Average Maturity 14 y ears 14 y ears 14 y ears 14 y ears 14 y ears (3) Weighted Average Principal Balance $0.2 $0.2 $0.2 $0.2 $0.2 Percentage of loans fixed / floating 1% / 99% 1% / 99% 1% / 99% 1% / 99% 1% / 99% Percentage of loans 30+ days delinquent 7.8% 5.9% 5.7% 6.9% 6.0% SBA ORIGINATIONS, ACQUISITIONS & SERVICING – SEGMENT SNAPSHOT |
| CURRENT QUARTER HIGHLIGHTS GROSS LEVERED YIELD 65.0% ► At this stage of the credit cycle, ample inventory opportunistic performing SBC loans of 55.0% 45.0% ► Acquired $142.2 million of SBC loans 35.0% 25.0% ► Acquisition pipeline of $259.6 million SBC loans (4) 15.0% 5.0% Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Gross Levered Yield (ex. Gains) Income on joint venture investment (2) $ in millions, as of quarter end. (4) As of April 30, 2018, including April 2018 acquisitions. (1) Excludes joint venture investment.8 (3) Represents fixed rate loans that have been securitized. 36.9% 8.0% 19.0% 19.2% 14.3% 15.0% 14.5% Portfolio Me trics (1) (B alance Shee t) Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Number of loans 885 882 766 858 976 (2) Unpaid Principal Balance $467 $411 $378 $417 $525 (2) Carrying Value $408 $368 $335 $376 $488 Weighted Average LTV 55% 53% 52% 49% 50% Weighted Average Coupon 6.0% 6.1% 6.3% 6.3% 6.5% Weighted Average Maturity 10 y ears 11 y ears 9 y ears 10 y ears 8 y ears (2) Weighted Average Principal Balance $0.5 $0.5 $0.5 $0.5 $0.5 Percentage of loans fixed / floating 46% / 54% 47% / 53% 46% / 54% 49% / 51% 58% / 42% (3) Percentage of fixed, match funded 14.9% 14.3% 55.1% 43.7% 27.0% Percentage of loans performing / non-performing 94% / 6% 95% / 5% 93% / 7% 96% / 4% 97% / 3% LOAN ACQUISITIONS – SEGMENT SNAPSHOT |
| CURRENT QUARTER HIGHLIGHTS MSR SERVICING PORTFOLIO (UPB IN $BILLIONS) $7.0 $6.8 $6.6 $6.4 $6.2 $6.0 $5.8 $5.6 $5.4 $5.2 ► MSR portfolio of approximately $6.8 billion in UPB, up 4% compared to Q4 ► Fair market value of $81.6 million, up 13% compared to Q4 ► Originations of $438.9 million(2), down 4% compared to Q4 ► Loan sales of $475.5 million, up 11% compared to Q4 ► Origination pipeline of $224.1 million in commitments originate residential agency loans(2) to Q1' 17 Q2' 17 Q3' 17 Q4' 17 Q1'18 (2) Represents fully committed amounts Originations (1) $ in millions. Represents activity during the quarter.9 Fair Q1' 17 Q2' 17 Q3' 17 Q4' 17 Q1' 18 Value ($ mm) $ 64.6 $ 66.8 $ 68.8 $ 72.3 $ 81.6 $6.8 $6.6 $6.3 $6.1 $5.8 Portfolio Me trics (quarte rly activity) Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Unpaid principal balance (1) $ 461.0 $560.0 $490.9 $458.7 $438.9 % of Originations Purchas ed 74.4% 80.1% 78.8% 71.9% 72.8% % of Originations Refinanced 25.6% 19.9% 21.2% 28.1% 27.2% Channel - % Corres pondent 43.2% 40.1% 37.7% 38.6% 41.0% Channel - % Retail 33.4% 35.9% 37.6% 41.1% 39.3% Channel - % Wholes ale 23.4% 24.0% 24.7% 20.3% 19.7% Unpaid principal balance (1) $ 481.7 $547.0 $503.9 $429.1 $475.5 les % of UPB - Fannie/ Freddie s ecuritizations 62.0% 62.7% 62.0% 60.6% 68.8% Sa % of UPB - Ginnie Mae s ecuritizations 25.5% 27.3% 26.4% 28.8% 20.4% % of UPB - Other inves tors 12.5% 10.0% 11.6% 10.6% 10.8% RESIDENTIAL MORTGAGE BANKING – SEGMENT SNAPSHOT |
| Los s (1) Represents remaining collateral in the securitization10 Recent transactions: ► In March, priced a $165.0 million securitization of fixed-rate SBC loans, at 6 basis points tighter than AAA-rated large balance CMBS. ► $148.5 million of bonds issued, collateralized by $165.0 million of originated fixed-rate SBC loans. S ecuritization Date Original Collateral Balance Pool - Factor(1 ) Delinquency 30+ Delinquency 60+ Delinquency 90+ Cumulative Fixed Rat e $727,75 4 RCMT 2014 -1 Sept ember 2014 181,92 2 0.37 0.0% 0.0 % 0.0% 0.0% RCMT 2015 -2 November 2015 218,75 7 0.82 0.0% 0.0 % 0.0% 0.0% RCMT 2016 -3 November 2016 162,07 5 0.71 1.8% 0.0 % 0.0% 0.0% RCMT 2018 -4 March 2018 165,00 0 1.00 0.0% 0.0 % 0.0% 0.0% Float ing Rat e $243,79 7 RCMF 2017 -FL1 August 2017 243,79 7 0.69 0.0% 0.0 % 0.0% 0.0% Freddie Mac $809,87 2 FRESB 2016 -SB11 January 2016 109,96 5 0.74 0.0% 0.0 % 0.0% 0.0% FRESB 2016 -SB18 July 2 016 118,03 7 0.90 0.0% 0.0 % 0.0% 0.0% FRESB 2017 -SB33 June 2 017 219,85 2 0.96 0.0% 0.0 % 0.0% 0.0% FRESB 2018 -SB45 January 2018 362,01 8 1.00 0.0% 0.0 % 0.0% 0.0% SBA $189,49 2 RCLT 2015-1 June 2 015 189,49 2 0.49 4.2% 2.9 % 2.6% 0.7% Acquired - Non -performing $270,06 0 W VMT 2011 -SBC1 February 2011 130,71 0 0.02 7 6.9% 7.4 % 7.4% N/A SCML 2015-SBC4 August 2015 139,35 0 0.31 1 7.2% 13.8% 11.9% N/A Acquired - P erforming $252,48 6 W VMT 2011 -SBC2 March 2011 97,55 7 0.28 3.4% 3.4 % 2.9% 3.6% SCMT 2017-SBC6 August 2017 154,92 9 0.80 0.7% 0.2 % 0.0% 0.0% Total l oan s e cu ri ti z a ti on s $2,493,46 1 SBC AND SBA LOAN SECURITIZATION PERFORMANCE |
| ► 54% of our held-for-investment loan portfolio is floating rate ► 67% of our fixed rate loan portfolio is match funded ► a 100 basis point increase in LIBOR would increase annual pre-tax net interest income by approximately $0.07 per share(3) Annu al Net Interest Inco me Per Share (Pre-tax) $0.08 $0.07 $0.06 $0.05 $0.04 $0.03 $0.02 $0.01 $-25 basis point increase 50 basis p oint increase 75 basis p oint increase 100 basis p oint increase (2) Excludes loans held-for-sale, at fair value (1) As a percent of carrying value11 (3) Based on portfolio as of March 31, 2018 and assumes no future changes in the composition of the portfolio. PORTFOLIO - FIXED VS FLOATING INTEREST RATE SENSITIVITY INTEREST RATE RISK SENSITIVITY |
| Other, 0.7% Subordinated Mortgage, 1.9% California, 13.8% Texas, 11.9% Florida, 11.6% New York, Other, 49.8% First Mortgage, 97.4% Georgia, 6.0% 6.9% Physicians Offices, 16.2% Other, 15.0% Industrial, 7.9% Day Care Services, 11.7% Lodging, 10.7% SBA, 23.1% Other, 48.9% Office, 14.9% Multi-Family, 21.4% (3) Retail, 17.7% Eating Places, 5.5% Veterinarians, 7.0% (2) Excludes loans held-for-sale, at fair value (3) Average carrying value of Retail exposure is $1.5 million as of March 31, 2018 and December 31, 2017 (1) As a percent of unpaid principal balance12 SBA COLLATERAL TYPE (1)(2) COLLATERAL TYPE (1)(2) LIEN POSITION (1)(2) GEOGRAPHIC LOCATION (1)(2) LOAN PORTFOLIO COMPOSITION AS OF MARCH 31, 2018 |
| Total Debt + Equity and an additional $50 million in April 2018: $154.9 $165.0 Funding Mix ► Since going public in Q4 2016, we continue to optimize our capital structure: Issued $295 million in non-recourse debt through 3/31/18 -Convertible notes: 6 year notes, 7.0% coupon, $115 million -Senior secured notes: 5 year notes, 7.5% coupon -$75 million in February 2017; YTM of 7.5% -$65 million in June 2017; YTM of 6.75% -$40 million in January 2018, YTM of 6.5% -Senior notes: 3 year notes, 6.5% coupon, $50 million Sponsored two securitizations in 2017 and one in Q1 2018 -$198.8 million of bonds issued, collateralized by $243.8 million of originated transitional loans -$139.4 million of bonds issued, collateralized by million of acquired SBC owner-occupied loans -$148.5 million of bonds issued, collateralized by million of originated fixed-rate SBC loans Paid down recourse debt of approximately $300 million 13 CURRENT SOURCES OF FUNDING HISTORICAL CAPITAL STRUCTURE $1,964$1,923$2,012$2,038$2,193 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Common Equity Convertible senior notes Senior secured notes Credit facilities and repurchase agreements Securitized debt obligations 22% 21% 34% 29% 31% 43% 46% 31% 30% 26% 7% 7% 8% 7% 5% 5% 4% 5% 29% 28% 27% 28% 26% CAPITAL STRUCTURE |
| HISTORICAL LEVERAGE 3.5 3 2.5 2 1.5 1 0.5 0 2.9x 2.7x 2.4x 2.0x 1.9x 1.7x 1.6x 1.6x 1.2x 1.1x Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 RecourseTotal 14 3/31/2018 Total de bt-to-e quity ratio (in millions) Secured borrowings (warehous e credit facilities and borrowings under repo trans actions ) $ 657.2 Promis s ory note 5.9 Securitized debt obligations 679.9 Senior s ecured note 178.7 Convertible note 109.2 Total Debt $ 1,630.9 Total Stockholders ' Equity $ 561.8 Total debt-to-equity ratio 2.90 Total re cours e de bt-to-e quity ratio Total Debt $ 1,630.9 Les s : Securitized debt obligations (679.9) Total recours e debt $ 951.0 Total Stockholders ' Equity $ 561.8 Total recours e debt-to-equity ratio 1.69 FINANCING AND LEVERAGE |
| Facility S ize (1) Available Capacity (1) Bank Maturity Rate Description (1) $ in millions15 Borrowings unde r cre dit facilitie s JPMorgan June '18 3M L + 3.25 to 3.50% $ 250 $ 179 Borrowings are used to finance SBC and SBA loan acquisitions, and SBA loan originations. Keybank Feb '19 1M L + 1.75% 125 76 Borrowings are used to finance Freddie M ac SBC loan originations. GMFS Credit Facilities < 1 year 1M L + 2.13 to 2.50% 230 139 Borrowings are used to finance Residential Agency loan originations. Total borrowings unde r cre dit facilitie s $ 605 $ 394 Borrowings unde r re purchase agre e me nts Deutsche Bank Feb '20 3M L + 2.30 to 2.80% $ 275 $ 137 Borrowings are used to finance SBC loan originations and Transitional loan originations. JPMorgan Dec '20 3M L + 2.50 to 4.50% 200 152 Borrowings are used to finance SBC loan originations, Transitional loan originations, and SBC loan acquisitions. Citibank June '18 3M L + 2.50% 200 19 Borrowings are used to finance SBC loan originations and SBC loan acquisitions. Total borrowings unde r re purchase agre e me nts $ 675 $ 308 Total se cure d borrowings $ 1,280 $ 702 Senior Secured Notes Feb '22 7.5% $ 180 N/A Long term financing used primarily to finance newly originated and acquired SBC and SBA loans Convertible Notes Aug '23 7.0% 115 N/A Long term financing used primarily to finance newly originated and acquired SBC and SBA loans Total $ 1,575 $ 702 LOAN WAREHOUSE FACILITIES |
| AVG. DEBT BALANCE LEVERED YIELD GROSS YIELD(2) DEBT COST(3) INVESTMENT TYPE CARRYING VALUE(1) unrealized gains (losses) on loans held for sale and servicing income net of interest expense and amortization of deferred fi nancing costs on an annualized basis. (3) Sutherland finances the assets included in the Investment Type through securitizations, repurchase agreements, warehouse facilities and bank credit facilities. Interest expense is calculated based on interest expense and deferred financing amortization for the quarter ended 3/31/2018 on an annualized basis. (4) Excludes loans, held for sale, at fair value Book Equity Value Metrics (5) Excludes the equity component of our 2017 convertible note issuance Q1 2018 Earnings Data Metrics Management Corporation$17,854 Loan Portfolio Metrics (4) Servicing Portfolio Metrics (1) Average carrying value includes average quarterly carrying value of loan and servicing asset balances (2) Gross yields include interest income, accretion of discount, MSR creation, income from our unconsolidated joint venture, realized gains (losses) on loans h eld for sale, 16 Net income attributable to Sutherland Asset Earnings per share – Basic and diluted$0.56 Core Earnings per Common Share$0.47 Return on Equity per Common Share13.1% Core Return on Equity per Common Share11.0% Dividend yield9.8% SBA servicing rights - UPB$437,177 SBA servicing rights - carrying value$16,318 Freddie Mac servicing rights - UPB$676,928 Freddie Mac servicing rights - carrying value$6,704 Residential servicing rights - UPB$6,817,646 Residential servicing rights - carrying value$81,591 % Fixed vs Floating Rate45.8% / 54.2% % Originated vs Acquired56.8% / 43.2% Weighted Average LTV-SBC61% Weighted Average LTV-SBA78% Weighted Average LTV-Acquired50% Common Stockholders’ equity$542,019 Common Stockholders’ equity (adjusted)(5) $539,961 Total Common Shares outstanding31,996,440 Net Book value per Common Share$16.94 Adjusted Net Book value per Common Share$16.88 Loan Acquisitions$463,49212.5%$401,3835.8%56.1% SBC origination portfolio$1,166,2807.4%$985,0115.1%20.1% SBA Originations, Acquisitions & Servicing$470,31810.6%$354,1184.1%30.4% Total$2,100,0909.2%$1,740,5125.0%29.6% SUTHERLAND SNAPSHOT ($ AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA) AVG. |
| APPENDIX |
| Q1’18 earnings per share up $0.18, or 47%, compared to the previous quarter Adjusted net book value of $16.88 per common share as of March 31, 2018 17 $0.60 $0.50 $0.40 $0.30 $0.20 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Earnings Core earnings Dividends declared $0.56 $0.47 (1) $0.38 $0.38 $0.37 $0.37 $0.37 $0.37 $0.37 $0.37 $0.37 $0.34 $0.34 $0.33 $0.29 Per Share Trends PER SHARE FINANCIAL PERFORMANCE |
| Cash and cash equivalent s $ 40,000 $ 63,931 $ 70,590 $ 63,425 $ 86,773 Short -t erm invest ment s 239,856 — 99,994 — — Loans, held for sale, at fair value 152,231 206,706 200,318 216,022 160,999 Loans eligible for repurchase from Ginnie Mae 117,229 105,244 101,408 95,158 81,484 Derivat ive inst rument s 4,351 4,187 4,131 4,725 5,022 Receivable from t hird part ies 111,221 106,562 6,756 6,756 11,064 Asset s of consolidat ed VIEs 631,765 597,277 944,894 861,662 968,999 Li abi l i ti e s P romissory not e, net 7,046 6,773 6,494 6,107 5,883 Convert ible not e, net — — 109,414 108,991 109,226 Guarant eed loan financing 361,916 332,812 313,388 293,045 278,500 Liabilit ies for loans eligible for repurchase from Ginnie Mae 117,229 105,244 101,408 95,158 81,484 Dividends payable 12,162 12,289 12,289 12,289 12,335 Total Li abi l i ti e s $ 1,977,662 $ 1,894,109 $ 1,948,090 $ 1,968,036 $ 2,079,198 Common st ock 3 4 3 3 3 Ret ained earnings (Deficit ) (2,648) (4,030) (3,952) (3,385) 2,559 Non-cont rolling int erest s 38,847 19,394 19,338 19,394 19,737 Total Li abi l i ti e s an d S tock h ol de rs ’ Equ i ty $ 2,527,522 $ 2,446,920 $ 2,503,143 $ 2,523,503 $ 2,640,954 (1) Certain balances have been reclassified to match current period presentation18 (2) Excludes the equity component of our 2017 convertible note issuance. Adju s te d B ook Val u e pe r S h are (2 ) $ 16.73 $ 16.67 $ 16.68 $ 16.69 $ 16.88 Total S tock h ol de rs ’ Equ i ty $ 549,860 $ 552,811 $ 555,053 $ 555,467 $ 561,756 T ot al Sut herland Asset Management Corporat ion equit y 511,013 533,417 535,715 536,073 542,019 Addit ional paid-in capit al 513,658 537,443 539,664 539,455 539,457 S tock h ol de rs ’ Equ i ty Account s payable and ot her accrued liabilit ies 63,130 53,768 54,579 74,636 64,490 Derivat ive inst rument s 619 931 358 282 756 Cont ingent considerat ion 8,841 8,939 9,037 10,016 10,732 Senior secured not e, net 73,390 138,311 138,074 138,078 178,688 Securit ized debt obligat ions of consolidat ed VIEs, net 434,055 397,911 680,282 598,148 679,871 Secured borrowings 899,274 837,131 522,767 631,286 657,233 Total As s e ts $ 2,527,522$ 2,446,920$ 2,503,143$ 2,523,503$ 2,640,954 Ot her asset s 60,938 39,452 35,356 56,840 53,592 Servicing right s 84,997 86,751 89,372 94,038 104,613 Invest ment in unconsolidat ed joint vent ure — — — 55,369 50,229 Mort gage backed securit ies, at fair value 31,365 43,877 41,371 39,922 47,181 Loans, net 1,033,7971,175,370892,896 1,017,9201,057,034 Rest rict ed cash 19,772 17,563 16,057 11,666 13,964 As s e ts BALANCE SHEET BY QUARTER (In Th ou s an ds ) 3/31/2017 (1 ) 6/30/2017 (1 ) 9/30/2017 12/31/2017 3/31/2018 |
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| 8 Int erest expense (16,441) (17,230) (19,908) (21,067) (22,666) P rovision for loan losses (1,232) (159) (466) (506) (167) Non -i n te re s t i n com e Ot her income 839 1,588 1,853 3,130 1,334 Servicing income, net of amort izat ion and impairment 4,442 5,631 6,134 6,787 6,410 Non -i n te re s t e xpe n s e Allocat ed employee compensat ion and benefit s from relat ed part y (1,012) (1,008) (990) (833) (1,200) Management fees – relat ed part y (1,977) (2,007) (2,034) (2,041) (2,013) Loan servicing expense (1,513) (2,611) (3,388) (2,811) (4,093) Total n on -i n te re s t e xpe n s e $ (25,659) $ (27,306) $ (29,725) $ (30,434) $ (33,693) Ne t u n re al i z e d gai n on fi n an ci al i n s tru m e n ts 1,282 974 2,678 2,066 3,008 P rovision for income t axes (1,034) (1,069) 340 (76) (2,563) Less: Net income at t ribut able t o non-cont rolling int erest 701 657 533 633 664 Earn i n gs pe r com m on s h are - bas i c $ 0.29 $ 0.34 $ 0.37 $ 0.38 $ 0.56 Weight ed-average shares out st anding - Basic 30,549,806 30,768,900 32,026,494 32,031,494 32,036,504 Di vi de n ds de cl are d pe r s h are of com m on s tock $ 0.37 $ 0.37 $ 0.37 $ 0.37 $ 0.37 (1) Certain balances have been reclassified to match current period presentation19 Weight ed-average shares out st anding - Dilut ed 30,549,806 30,769,332 32,028,980 32,034,610 32,045,844 Earn i n gs pe r com m on s h are - di l u te d $ 0.29 $ 0.34 $ 0.37 $ 0.38 $ 0.56 Ne t i n com e attri bu tabl e to S u th e rl an d As s e t Man age m e n t C orporati on $ 8,856 $ 10,496 $ 11,841 $ 12,097 $ 17,854 Ne t i n com e $ 9,557 $ 11,153 $ 12,374 $ 12,730 $ 18,518 Income before provision for income t axes (benefit ) $ 10,591 $ 12,222 $ 12,034 $ 12,806 $ 21,081 Ne t re al i z e d gai n on fi n an ci al i n s tru m e n ts 2,966 4,491 5,695 6,177 12,232 Ot her operat ing expenses (5,534) (6,206) (7,447) (7,752) (8,011) Incent ive fees – relat ed part y — — — (408) P rofessional fees (2,159) (2,023) (2,151) (2,588) (2,648) Employee compensat ion and benefit s (13,464) (13,451) (13,715) (14,409) (15,320) Total n on -i n te re s t i n com e $ 15,791 $ 18,204 $ 18,722 $ 20,435 $ 25,217 Income on unconsolidat ed joint vent ure — — — 1,048 5,739 Gains on resident ial mort gage banking act ivit ies, net of variable loan expenses $ 10,510 $ 10,985 $ 10,735 $ 9,470 $ 11,734 Ne t i n te re s t i n com e afte r provi s i on for l oan l os s e s $ 16,211 $ 15,859 $ 14,664 $ 14,562 $ 14,317 Ne t i n te re s t i n com e be fore provi s i on for l oan l os s e s $ 17,443 $ 16,018 $ 15,130 $ 15,068 $ 14,484 Int erest income $ 33,884 $ 33,248 $ 35,038 $ 36,135 $ 37,150 STATEMENT OF INCOME BY QUARTER (In Th ou s an ds , e xce pt s h are data) Q 1 2017 (1 ) Q 2 2017 (1 ) Q 3 2017 Q 4 2017 Q 1 201 |
| (In Th ou s ands ) Q 1 2017 Q 2 2017 Q 3 2017 Q 4 2017 Q 1 2018 Re con cilin g ite m s : Unrealized (gain) loss on mort gage servicing right s 1,120 1,671 1,728 47 (4,155) Rest rict ed st ock unit grant t o independent direct ors 290 — — — — C ore e arn i n gs be fore i n com e taxe s $ 11,082 $ 11,662 $ 13,908 $ 12,801 $ 14,442 C ore e arni ngs $ 10,860 $ 11,161 $ 12,871 $ 12,442 $ 15,489 C ore e arni ngs attri butabl e to C ommon Stockhol de rs $ 10,063 $ 10,503 $ 12,317 $ 11,824 $ 14,934 W e i gh te d ave rage com m on s h are s ou ts tan di n g 30,549,806 30,768,900 32,026,494 32,031,494 32,036,504 20 C ore e arni ngs pe r s h are $ 0.33 $ 0.34 $ 0.38 $ 0.37 $ 0.47 Less: Core earnings at t ribut able t o non-cont rolling int erest s $ 797 $ 657 $ 554 $ 619 $ 555 Income t ax adjust ment s (222) (501) (1,037) (359) 1,047 T ot al reconciling it ems $ 1,525 $ 509 $ 1,534 $ 71 $ (4,076) Merger t ransact ion cost s 70 — — — — Unrealized (gain) loss on mort gage-backed securit ies $ 45 $ (1,162) $ (194) $ 24 $ 79 Ne t In com e $ 9,557 $ 11,153 $ 12,374 $ 12,730 $ 18,518 CORE EARNINGS RECONCILIATION |
