MMAC - Earnings call transcript Q2 2018 | MMA Capital Holdings Inc

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Operator

Good morning, ladies and gentlemen, and welcome to the MMA Capital Management, LLC 2018 Second Quarter Financial Results and Business Update Conference Call. My name is Andrew, and I will be your coordinator for today. [Operator Instructions]. Please note, this event is being recorded.

Some comments today will include forward-looking statements regarding future events and projections of financial performance of MMA Capital Management, which are based on current expectations. actual to the and Securities these company's Commission, could subject those which and forward-looking are materially that in differ identified filings cause statements. comments significant expressed uncertainties, risks include Exchange from These those to in results with the in The undertakes contained to statements. of the update company forward-looking any obligation information no the would now Mr. to like I to over turn the call Capital of Falcone, MMA Management, LLC. CEO Michael

Michael Falcone

welcome. Financial With David Thank Gary me Megan the Senior you, everyone, Andrew. am are Chief Good Vice call President Operating I Bjarnason, who and our call and Officer; morning, Mentesana, today President, to Officer; on happy Sophocles. Chief and

to comprehensive even approximately $X.X at comprehensive $XX.XX yet equity. price capital shareholders' quarter by the the driven that equity activity, is driver XXX,XXX million the The For results review and continuing and operations, in review share of at and X.X% the as second increase quarterly which operations options investments. purpose our for an impact Dave that behind in of increases on interest overall unconsolidated share who MGM Hunt that close. represented stock per and share most book income issuance driven the $X.X I equity call transaction, The or Hunt and stock the financial our of which quarter renewable housing affordable quarter. our today Companies, approximately as increases later, remarks, common MMA driven of transaction the of for Gary the with to decrease exclusive quarter by the which to in be closed partnership the shares after results, of XXXX reflects or a equity buyback quarter, average morning, energy financial expenses saw will provide further January, remarks of exercise the million we affiliates income, primarily exercise common company which in Diluted continuing The primarily in million an strategic discuss, prepared issuance increase income call Dave, in will refer of increase With per the ended the will which This while, Capital resulted deliver of Hunt to questions. the shareholders' $XX follow, shareholders' quarter. with increase will the shareholders' X.X% we million to was both per second was value available of the $XX.XX, of an $X.X and net that the respect shares we plan which part by common Management's options the with share shares from from from the in during or Overall, equity share book reported Inc., came value $X.XX common of share represents increase XXX,XXX per is repurchased during per detail shareholders' in quarter an for of also the this our Dave operating and to equity, of as quarter to was other the business our $X.X $XXX.X in share, quarter. all of second take of ventures, net will of implementation update. to the significant operations and in the company income common million per

company completed quarter. current earlier, XXXX repurchased to average Subsequent authorization, the shares with shares to $XX.XX company the during total another price plan the share initial quarter, buyback in purchases of original shares, as the that XXX,XXX and buyback XXX,XXX share. second During that the share XXXX share completion of of begin the an allowed authorization, the plan noted per first adopted company of repurchases the for buyback per Pursuant the a the to quarter. to share quarter-end, price the up price Due buyback authorization at authorized to company of $XX.XX share. an with XX,XXX has price average trading at $XX.XX of shares, our the

Gary. of me call portfolio, review let a the For operating Gary? our turn over to

Gary Mentesana

were in to respect the average defaults while underlying With quarter. portfolio holdings the portfolio, held well, coverage investments Mike. steady as with Thanks, rate Bonds to and ratio this service properties weighted our Leveraged during debt there the no perform continued pay associated our new

net connection fair in investments and value portfolio In addition, and million of million $X.X million, recognized $XXX gains in bond-related At second this quarter. June UPB were of the $XXX fair value respectively. we with the XX,

While million at UPB fair and value XX, $XXX were and respectively. its March $XXX million,

debt reported the as bonds the subordinated pay the and Excluding and of flow our at effects Table and at service filing, quarter in higher were ratio and cash quarter. versus average coverage in other slightly rate of the the end X.XXx, first X.XX% X.XX% respectively, of respectively, portfolio's weighted bonds X.XXx, X

Additionally, June portfolio, Renewable portfolio, driven, basis of which that $XX.X our our rate equity REL, a finances March a the investments on partner million for million at in weighted carrying Energy partially value Energy X.X%. $XX.X XX, average during Ventures effective had steady Capital June the this or net by million $X.X our was at the $XX.X carrying interest quarter-over-quarter investment at part, reported of debt of XX in in buyout the from the million at value increase asset-related up of In quarter. was Lending, This XX. Solar was

this in the will result alternative and the this loans. third-party now the company continue affiliates owner and co-investors that buyout, hold joint make of other of in sole regard, company solar manager to a is REL, asset are of solar and ventures As three

that could increase equity its that equity company the in amount Renewable of to of a REL. deploy in termination compelling, investment is over Lending should consolidating our to believe the enhance of invested in with enables on Investment continue that of value transaction within enable transaction In the space over essentially we this it returns control enhance amount to that confident was through Hunt are opportunities the the to enable important the to its Energy space partner the company and on this REL's what cap We the us our REL Energy decision REL. invest in extension will Moreover, Renewable the equity equity shareholder Lending time. that Management we can believe view, are will enable buyout the company Hunt as Further, time. an of grow the it company

the assets limited funds note Housing development investments acquired other that three includes liabilities as the in and portfolio year company Lastly, deals. Low-Income land well as the partner the and Tax Hunt during Credit

to of but With to Hunt continue we With consistently full will the believe we in maximize results quarterly to be contribute turn ways that, exception discuss Dave? the greater the Dave, we these financial do will note, not to I'll call will the will what value. assets detail. eventually income, market assets to portfolio expect this seek their who in realize over

David Bjarnason

morning, good Gary, Thanks, everyone. and

increased this million As million. quarter-over-quarter quarter or the regard, on a share $XX.XX $XX.XX in $XXX.X share, second equity per mentioned, increased per represented basis. shareholders' common diluted share $X.XX per In which $X.X common shareholders' equity increase to

diluted million were driven common As in mentioned, in shareholders' book $X.X and recognized by Mike we income quarter. comprehensive value per share primarily the Comprehensive equity also of second income increases that income in net in quarter, the $X and reported included of other income. which we less of first that than the second $X.X $XX.X comprehensive million was million quarter, we reported million

primarily was we attributable Hunt that I'll recognized quarter this the related to As of discuss, the to nonrecurring the decline first in further income settlement transaction.

perspective, second equity From quarter. second that second impact ended common essentially the XX, other since and liquidity of reflects the issued the during million a changes by difference amount to $XX also the we the decreased of We resources just March which million quarter purchased $X.X in XXXX. recognized the million we cash versus of company cash and shares between to with of equivalents, quarter $X.X capital shares shareholders' dollar the

company's by an increase carrying of income to quarter. This decrease yield comparison, softened now by interest such increases gains referenced which caps considers various a in bond-related reported of on $X.X interest in related value all investments of that significant bond obligations first Net positions we value million the property touch to compared second positions a net recognized $X.X Net By was in of tax bond nonperforming our value rate of third-party in From decreased fair first $XXX,XXX million, such Additionally, investments. bond-related with in payments the million nonperforming exempt represents coupon less or the rate in value We we on million I'll basis rate we by the hedge key to with hedge recognized recognized and we that amounts quarter, connection that the interest gains driven fair the quarter. tax of quarter in first debt a including points our we briefly compared net investments, our the in a with of $X.X net to second each the value increase of the were compared sales second net in an primarily a connection in investments the X.X%. results, value the $X of perspective, the in subordinated multifamily recognized that -- a This used noted, were our pending to for to on connection quarter investments. of losses value quarter gains fair on of positions debt interest sources that of cash exempt second second such respect $XXX.X increase XX quarter, related value while augmented marginally multifamily With as quarter our in recognized in Gary largely value fair value increase to change bonds. were flow to received to million average on performance bond-related said, was the portfolios. secures interest gains property. company's these value to hedge net and which indications investment, second related in drivers rate risks. by $XXX,XXX million first quarter in obtained we $X.X to that our gains second of the gain reported fair swaps in interest the quarter the fair attributable increased fair as portfolio, the fair Bond Leveraged in net

the to asset-related our a associated the loans in compared had of to principal funding due from to we weighted were quarter to second portfolio, remaining June With increase associated effective debt At and see obligations amounts Capital the second debt. XX, Solar the X average first balance Ventures loans an $XXX portfolio Ventures. the coupon on-balance-sheet Leveraged our positive increased in in that with and which of interest quarter, balance rates with $XXX,XXX returns with cost while funded of through Bond continued months Solar Our in quarter outstanding investments Energy was respect of unpaid slightly our the average recognized in was average million, weighted a maturity X.X%. XXXX, the

in we we mentioned, in equity our was these and million second subordinated other million million partner's Solar we the accrual return This recognized the interest rate a debt sheet amounts first represented the this no in interest interest the real assets of ventures million The fully buyout of recognized equity by recognition that other $XXX,XXX increase consent with a quarter on we which at the of component primarily that basis returns of to in which the the quarter, par particular ventures, guarantee on has related a the partner's points. fair liabilities, on party acquired a note the value that acquired a these increase income ownership which was further interest. buyout that in attributable that assets that was interest in to income that we in interest the million will quarter, debt compared this quarter. that on based complete of $XX.X amortized to be quarter, purchase end be by our carrying from and $X.X a these second the $XX,XXX of our the to income company solar caused disposed represented to investment -- million by in million Gary in quarter Ventures investments by an off of and We values. interest investment increased primarily $X.X assets what the redeemed paid the latter XX, and this increase equity investment payment purposes the first release XX value This was estate of recognized of -- in REL XXXX. investments first to prior quarter. when June third income average amount approximately driven which This of former to REL, of longer the for $X.X the five an our recognized $XXX,XXX was was from by net This at in second As associated had this period to recognized quarter's a our we adjustment the quarter. recognized primarily price said, cost the reduced by weighted $XXX,XXX quarter. which first of The on it case, on increased loan second compared second a portfolio, or a company's in consolidating to and with investments in excess to as connection return the was to funding these loan effective financial recognized In in we to the to our volumes a driven investments this book net Hunt income as in its company increase of to our that recording solar in nonorigination a year with increase relative allocated in $XX increase XXXX. compared from of provided respect cash, quarter, the loans the received the approximately portfolio full second other we $X.X ventures. by receivable the short-term interest a in increase connection $X.XX represented the of obligations over With of from balance recognized their compared

base the cost reimbursable per explained external reimbursements and and our the payable decline driven fees in caused first us; in reported associated professional the was our employee a decrease investment second portfolio holdings management that and in management our fund. respect that reimbursable general million manager. to company core second was and in Hunt income $XXX,XXX Hunt, and quarter. operating share comprised compensation-related expenses, the also manager million primarily which million $X the decrease decrease quarter, external stock the by The assets quarter to salaries which $X.XX what management cap behind that quarter. that related turn we other $XXX,XXX are is negligible second million the decrease in and in by driven as $X.X of first compensation-related in company's decreased million are price, which in fair and million reimbursable management benefits, expenses, Africa million we professional I to This to second partly $X.X in of amount in and in were The a now to such recognized common we company payable expenses and we ownership of quarter annual of expenses, in with in paid $X.X second decreased we This relatively $X.X decline include fees expense the $X.X of estate-related compared of administrative expenses, external expenses equity on total quarter. the other the This decrease and MMA's that, fees, back the of Lastly, fees the deal $X.X compensation investments represents recognized over manager. With amount transaction Mike. to nonrecurring recognized quarter-over-quarter call in external in primarily which This expenses manager. a will Fund second is was the that decrease liabilities recognized the the real and by recognized the external the value the reimbursable expenses basis. interest this quarter-over-quarter was share With of South Workforce certain of quarter Housing of external by a quarter to reached the fees

Michael Falcone

Dave. Thanks,

the Before matters. we back earlier, want the turn briefly Gary I'll something get other just brief to to clarify to said some a he update call Q&A, on I to and then that provide

Gary? So

Gary Mentesana

talking XX, that XX, everybody. fair Mike, June were I XX, amounts at the million. my remarks, March Thanks, was The at apologize. million UPB apologize, fair numbers And indicated $XXX In million, $XXX $XXX $XXX and and Yes. to actual the March I and Again, value I and from I XXXX values XXXX. are million respectively. changes about UPB the

Michael Falcone

provide Thanks, to our a now subsequent business ongoing impact brief the the given Gary. to like the update I'd on transactions. to transaction Hunt model and changes

in related factored adjustments income, Grove into expected in not million may that from be Housing given certain our recognized receipt closing transaction-related Management, adjustments material. defer an on acquisition and the agreements price to recognized we triggered of are the to We company also Hunt the Hunt I estimate, As the income there would where that to approximately to to the continues our right the should disclosed company MGM, take certain-related MGM Credit to to provide the assets anticipate that and not be I additional Low-Income will various transaction. such mention to of recognition satisfactory deliverables, purchase the Hunt financial of $XX are that and these statements, business. transaction, agreements to as although timing, subject assignment the certainty be that filings Morrison ultimately should take are close be additional may amounts to differ terms cannot expenses estimated consummate purchase and assignment acquire subject and of of Tax of MGM the to continue to decide

In addition, occurring us successfully closed Hunt share. common $XX occurring at two an per its share of the share as second previously the $XX.XX have with per average first equal purchase shares in acquire commitment at from XXX,XXX we reported, on to for $XX installments, and per

exchange in for purchase on March the cash, for in of and XXX,XXX exchange $X.XX shares shares of XX million second of million X occurred on first XXX,XXX The in occurred $X.X purchase cash. June

As we a our reporting we of important significant Hunt was of goal, work and that increased going on have an which investor have progressed Increasing goal understanding this the one throughout seen and simplicity, organizational year, transaction. business simplicity and forward. we continue will to remains

we real continue low -- impacts are move environmental benefits to or the in think origination which social invest reach to brought of the and we estate including due that positive from team. to said, with can debt-focused debt have and to company forward, additional continue the the Hunt infrastructure, investment returns. we expect As we realize to teens opportunities associated Hunt we relationship, opportunity the other will to primarily produce That generate

our types liability goes board we asset the purposes. in for evolve, to areas, between leaves but company mix to overweight from particular of As on, approved of time-to-time, may both time a MMAC of with from the limited conversion corporation origination if underweight the the or Further, capacity company a the legal mix. externalization will has elements the even investment management access

becoming we expand the and expect election. that shares. result base, of for taxed put of after shareholder Russell the certain Ultimately, XXXX, fall certain steps. corporation funds earlier been From vote to for that a and ownership believe unable as in change we proxy since complete have otherwise to regulatory a eligible is number perspective, mutual eliminating corporation, through as in the barrier we logical We this such we a XXXX this via a be potential would shareholder to a Index indices, shareholder that invest as our our a

stock book the step of to this initially the company. an part price to our close the the as reflect share trading value effort further We enable overall of better and and trading to price are gap taking of the value per between

to his Now I Gary a and to acknowledge want take moment promotion.

change have seen As long have and MMAC. of the the for morning, the to XX-Q you time facts a the some Officer will on on filing now acknowledge Tuesday in President board yesterday Gary's of title been and MMAC what Chief to voted Operating ground

that entity, was has compass to His converted long and grow the context, under it involved the humor contributed describe For and about grow a been we acumen, a and before Even suspect business. I his ago. leadership most I've for to already been years successful of Gary the that sense MMA, was said in will a his role Gary's key it ever to team member you SCA Officer. force Chief began and leadership. Gary entity prosper day-to-day that before of I'm some Gary whether to fast as were fund was continue of certain since. the Fund, Tax-Exempt MMAC with company continue was certain has predecessor have accountant driving moral all He Operating MMA the XX he will to business MMAC. I'm a --

we the returns we questions shareholders. to our maximizing value just focused callers, the through I from that reiterate company per share remain Before and improving of on take wanted

committed to thank for remain you your future, we the about excited our and shareholders, are We support.

to We open call questions. Operator? will now the

Michael Falcone

do there operator. -- these were that let I this no calls I on so all to this Gary we in given debut, guess explain to his now that call Thanks, clearly questions. from ought managed

I are Thank date, we've appreciate the going forward. We everybody shareholders' hopeful and the rest their that summer. future. enjoys all about we're to continued hope excited of We support our you. of of had success

Operator

presentation. now you attending has Thank conference for The concluded. today's

disconnect. now may You

MMA Capital (Trading Symbol(s) MMAC MMAC) 10 Aug 182018 Q2 Earnings call transcript