MMAC - Earnings call transcript Q3 2018 | MMA Capital Holdings Inc

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen, and welcome to the MMA Capital Management, LLC 2018 Third Quarter Financial Results and Business Update Conference Call. My name is Andrea, and I will be your coordinator for today. At this time, all participants are in a listen-only mode.

We will facilitate a question-and-answer session at the end of this conference call.

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 which Listeners cautioned statements, place as of on these undue are only reliance the to forward-looking not speak date hereof. statements. obligation to information the forward-looking the update contained of no any undertakes company The in I like to turn Mr. conference the over would call now to Capital Management, MMA Michael Fe of [ph], LLC. CEO

Michael Falcone

Andrea. the Dave you, Gary me Chief and Officer; everyone, happy Veterans welcome, Sophocles. Thank Megan Operating Officer; Good and call and morning Day. Financial President, Senior Mentesana, Chief With Bjarnason, on our are Vice today our

remarks, questions. after to Capital we overall third be which call available posted evening, Presentation purpose an reference review is XXXX night, Friday all we our The financial business our which On XX-Q our results provide remarks. our during earnings morning, and this I will Last our prepared site, For will Web take Form our to Gary third quarter issued on quarter and release. update. MMA to Dave, our we call of Management's Investor today will filed our we and deliver

reflects or at value shareholders' of impact X.X% increase that which on value financial strategic of see, the As represents or equity, share comprehensive with million, $X.XX $XXX.X $XX.XX, equity quarter. per income for which which positioning of per Investor for book share Dave an Presentation of per the the the providing the quarter. or quarter third of in company. primarily implemented in $X.X results, quarter, we company Diluted you on the approximately reported increase X.X% detail share, the enhancements we later, the will respect common hopes portfolio will our more of per number a to million the an in came to and common ended book the review information in With shareholders' share of on

happy to of end addition, company's MGM. its quarter In that assignment acquire right take right to say after the just exercised I'm Hunt to

based This of increase represents to completion related of on simplifying September and a XXXX. equity book $XX.X As approximately Hunt the step of fourth business of goal the shareholders' assignment quarter, the of closing transaction of shares as company an outstanding million the recognize result that $X.XX by towards and our per XX, of expects in significant realization in the approximately and company's Hunt, value a the subsequent or share reporting. financial the

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

Gary Mentesana

invested good the renewable In of Assets morning September Other The carrying to into three an has ventures partner Energy Capital $XXX.X and company's in the quarter. projects. Leveraged portfolio, Solar the Bonds, alongside during of Ventures Energy the by Mike, to the of everyone. construction XX, Thanks, our equity million company Liabilities. and primarily capital energy capital the in value investments Capital, million, institutional and Ventures Solar portfolios at development due increased primarily that the the In $XX.X and the consist finance third contributions quarter,

in these investments buyout additional the experienced with that principle. of Solar underwritten, XXXX investments of have June, We for In affords company's gigawatts its target loss enable generating of From at have return X.X%; has XX.X% most million, returns. completion inception portfolio, these invested a investments that XX, company increase opportunity weighted capital million the Consequently, Ventures excess the the fees energy. originated had ranged efforts over been likely aggregate and billion have investment and Ventures over former to from believe coupon months, The Solar UPB. better over to of time. Solar generated company on than that will X% will the of X% which XX, the maturity raise loans is in and to an UPB average that capital, committed featured ranged a coupons additional in happy attractive none are coupled looking origination $XXX.X September report loans the the that in any the the exiting the pipeline, capital $X.X remaining X% As performed XXXX, partner, financing to September the current risk-adjusted five I'm redeemed, of will these of project-based $XXX through to X.X below debt on from Ventures of this on strength weighted of include returns. average of and a make that of renewable for

was the rate and million and new properties average In interest interest contractually Turning $XXX that ratio a positions X.XX a hedged with no by rate and rate to value in primarily $XXX the and quarter, notional of amount, XX, a XX. at a million debt pay are that $XX exposure of SIFMA disposition were the UPB coverage interest well investments two rate September weighted are portfolio, of XXX.X% balance collection had times TRS we and average end the the Bonds associated Hedged quarter, perform million UPB third of weighted million, there $XX a TRS as XXXX. The due combined portfolio unchanged investments. the bonds at and we June our bond which mature million, of $XXX defaults, bond to $XX Return declined weighted plus X.X% underlying both SIFMA. during the while value of spread using Total million, generally X.XX%. bond the fair or Swap, to the are service have Leveraged swaps relatively result of fair as of notional tied their since of financing, continue The was represented average The terms, to of rate XXXX. a fixed cap notional pay

new $X our net most over in fall of with of will years. passage portfolio runoff, in few value calls, on the meet being that bond regardless values prepaid returns with below sourcing Consequently, to of low are approximately XXXX. par the zero next target prior par bond XX% difficult spreads, million premiums our essentially returns the compress fair decrease targeted portfolio investments is of fair and a investment credit rates Therefore, in which that changes to the of is eligible to our the the be expected at cause in projected time, discussed bond rate environment. interest period. As over returns by to bond such bonds And

UPB on Center, result, company or with capital. invested the also mention of in Town of Spanish development capital looking Fort premiums some $XX.X exempt XX.X tax bond a X.X%, October restructuring, center was infrastructure recycle weighted $XX.X a are coupon the September of Mobile, has we contractual these term a respectively issued the mixed-use the a and the coupon to investments company a UPB increase that years. Under development XX, to early and energy restructure and million, years. of As agreed of bond the briefly finance the near X.XX% equity XX.X two Alabama. a should at company's of at and terms Of had return municipal to maturity into all that town million of average the that to two I a single combined investments in invested a bond fair million investments bonds On of $XX.X a value

The in tax undeveloped owners financial fees. company community owns the to that is increase undeveloped principal bond. its fee satisfy of estate district that order and undeveloped on venture land that is an parcels to the generated associated payments license make venture assess revenues for development. its in located contributions will will venture member obligations the building development venture. in the owns land the with the will make of interest the Members XX% Additionally, land funds to incremental to the license This the parcels the fee CDD. supplement company amount from which development available real the in and undeveloped land in all the new CDD capital will the also And

portfolio, third developed Dave? but closing or parties the the except company for time expect assets in of in of in the the to liabilities turn those September However, October, their sold fees Hunt quarterly such of that portfolio to agreement, a I upon license bear to through consistently other pursue call and of to until the the the opportunities acquisition amendments we the undeveloped million results the what contribute discuss are note, we by which realize land increased value. to and parcels the to XX these that, $XX assets XXX% greater ventures venture. $XX in assets MGM With land will believe we burden continue to economic be respect who million Dave in financial this to not will to With from detail. market operating do to income, over monetize and Hunt will UPB

Dave Bjarnason

good everyone. Thanks, Gary, morning and

of $X.X third share per As equity $X.X million the which comprehensive in $X.X a to which mentioned, net quarter. income income, common that value per share Increases $X.X share in million quarter. shareholders' increased second third million regard, we by million. quarter-over-quarter this common of compared million other comprehensive were In share $X.X quarter $XX.XX $X.XX in to loss, basis. the shareholder's book primarily per on book increased driven equity included represented to million recognized income, increased of $XXX.X and increase the per Comprehensive the value

touch revenue comprehensive part income decline will level, in the very to I on bond our gains At in more in a quarter Now performance net soften on investments. due drivers detail. in high large third

and quarter filing there unconsolidated million the increase. Compared increased Page is equity quarterly were ventures increase quarter our of And income of components two for Table XX, second offset in desegregates a seven impact. in quarter, However, net on to net the this third income drivers the quarter. income. $X.X partially located key this over which funding

$X.X result of by holding were reclassified upon had gains of increased net de-recognition. into the their as First, bond that primarily on of AOCI net $X.X unrealized million two gains out that investments income disposition a approximately million

and investment in portfolios, funding was largely second prior Secondly, the income attributable to LP these increase in the assets saw higher company's portfolio. million to quarter. quarter. other pushed the Partnerships and property equity unconsolidated associated across all third This of income compared compared ventures share investments $X.X two quarter in investments liabilities to to increased

portfolio unchanged also decline relatively net both to two other non-performing in drivers was was $XXX,XXX the In interest a Interest as and drove liabilities due primarily the bond bonds. debt cash, cost basis. on in cost there in these largest other our several items with this Net well loans, funding the associated quarter. assets with and short-term debt relatively interest and are decline subordinated on and obligations associated portfolio decreased on multifamily taxes This a associated quarter-over-quarter cash was received While noting. change of in regard, funding compared margin income, investments quarter-over-quarter payments other a worth the steady to second our basis. asset-related income with as flow,

net recognized partially increase gain with our the hedge million offset on a our also the position. fair interest net TRS, our positions. in to our $XXX,XXX $XXX,XXX of the adjustments foreign in compared associated $X.X quarter gains third second We It net Incidentally, in rate value TRS fair reflected a quarter net value was on this value derivatives. fair currency derivatives interest decrease the hedge rate adjustments by

also about Lastly, $XXX,XXX associated $XXX,XXX of transaction, of losses due due quarter-over-quarter were foreign in liabilities. a the dominated foreign professional assets company's in with connection currency MGM this and that while third increased to non-recurring increased on the to regard, increased fees expenses quarter fees In the currency with basis. re-measurement expenses completion professional the recognized by other operating $XXX,XXX

incurred was impact was in decrease the the the second partially by thereby agreement large management the by of part flex compensation million $X.X reimbursed company reached reducing in expense, external declined because items However, quarter. cap, the the a company's fees two management offset amount third bonds quarter, of the in in of these which reimbursement

of net the in primary of drivers comprehensive million which quarter, five $X.X the on to by the while quarterly two increased filing were in XX, income comprehensive other comprehensive And on the other our income. compared income third Page our Table desegregates for located there other second decreased $X.X income. components decrease is mentioned, million As the quarter.

unrealized the of that holding out two of million earnings in reclassified other third quarter First, mentioned a $X.X gains income as of result I disposition were our bond comprehensive earlier. of investments

recognized company reduced consequently the was income for them comprehensive it other While amount equity-neutral, this of the reclassification that quarter.

Secondly, there in remaining of investments. million recognized amount we in decrease value the $X.X bond that fair was a net gains

non-performing home connection million $X.X with recognized the in second quarter investment. we a lien in discussed, As bond

related third magnitude bond similar the for the in of However, quarter. not value were adjustment recognized

addition million stock increase equity recognized shareholders' that to equity comprehensive mentioned, ops of shares changes quarter. issuance in As by These changes common $X.X to quarter. in a $X.X that third income, during the company million the settle in driven the was exercised common to shareholders the were included other of

third the $XX,XXX approximately in average shareholders $XX.XX of the common at However, quarter, also purchased per the in offsetting share of equity. company an resulted price reduction which shares in $XXX,XXX

including the restricted XX equivalents cash XX, decrease respect conveyance during of with company's decrease between of the liquidity and part the when XXXX; cash, flow company's XXXX, the activities first operating nine required for while added affiliate operating capital months of million evenly resources, $XX.X the used balance I these activities breaks and as million the cash which of for net activities. sale. decreased investments is to as cash our MGM restricted this of cash as the $XX.X The cash saying in XX% other of should in And in and we deconsolidation Solar had mind from Table million million was September finance down cash held transaction, for one Lastly used company during nine that that of made filing unrestricted. am impacts ventures CFVs, of investing first and of keep of we $X in months a accounted Hunt split of of and net classified loan equivalent and a cash $XX.X XXXX. value cash

in [ph] company the magnitude made that call was recorded investment as negative cash over treated company to this the not from million the that, during quarter, result, in cash And net caused transaction basis. as flow Mike. a third of on And be year-to-date turn under fund given activity. the spin-offs $X.X flows be activities importantly, With this activities. a will operating investing of denoted used operating generated As an back GAAP I permitted the to to

Michael Falcone

Dave. Thanks,

buyback and where continued in buyback operations up Hunt's The to share Q&A, a provide buying the plan, a a of envisioned transitioned operating continues of at successful as share. a I'll brief our price respect transparency, our steep the with business, evolution especially and business execution settlement we repurchased during with XXXX total at transaction, average use perspective, market achieve our value we both model at the capital, balance the an and such Before a realization fully businesses, of per currently raised value repurchases the long-term our have book and view to limit discount net of company tax From us book shares, book of shares the shares, book with priced to good prices a price credit LIHTC has losses transactions. success value the to XX,XXX the trading business which to following of increased increase debt. acquisition, get reduced in our sheet, enabled Due XX,XXX to increased the as per plan, the MGM simplified shares company subsequent XXX,XXX preserved to value of remain company international significant subordinate Hunt overhead, our approximately from significant initially authorization attractively the shares $XX.XX $XX.XX. reported a With company update on to the Year-to-date, that that of business coming to the $XXX,XXX buyback third discount price share our the value. to buyback, per quarter. an of

investment on risk environment. our mix, As in increased passage buyout now on of attractive to business of increase decrease our such, with take we an current review initiatives the time see company's creating by or positive will will as capital, impacts. end, market opportunities focused advantage of value To earlier and focused the new the we we are and returns. think equity fair space the value. investments opportunities maintaining we that out the infrastructure this two the we during energy year. our shareholder venture are and which bonds solely optimal returns To in to by In invest invested the existing primarily existing to investment identifying such renewable and increase other to look quarter at effort At on and we are mix time by returns portfolio with current certain former below evidenced of are that in investments and partner generate improve produce asset ways environmental various to continue adjusted social assets this return primary capital existing general, paths as generating exploring that in target premiums this raise recycling including growth

the value the anticipate With and narrowing the be First, growth second net share trading per our book e-driver of business value we for investors. value gap income between the time, price. long-term and growing of will

will growth In as inform capital available that in cash fact, also for income our return shareholders. net impacts policies

to Gary those path to earlier, capital the actionable investment putting have in growing we top numbers through and energy business. work capital primarily in additional spoke an to bottom-line As

and pursuing maintaining finding plan. part of balance our company of include initiatives in growth trading we between in benefit corporation Ultimately, us addition, a conversion investment as ongoing includes advantage that a price capital current capital the will XXXX outreach of investors have a such which increase of levels business In take and market other the initiatives community our efforts program an long-term. to series our buyback as of improve to will and the adequate front market our success to our expected and opportunities

to of mutual a Monday, the strategic everyone formally for to a at company a was next the XX. end through November our otherwise company as scheduled questions, for for our as potential funds votes as and one such invest on due Russell eliminating in from steps that the XXXX recommendation eligibility corporation to base would the take is number their This board's Index well we XX, special they indices sent ownership barrier limited November a shareholders to meeting to certain to XXXX company about legal remind of In not shareholder have excited that vote so. September of we The we achieve we has We the are vote shares the I we're be remain expand Before unable of yet a for strongly future, shareholders purposes. by shareholders and shares. to convert want you done the if and that proxy thank using encourage to help your action super. closing, are our committed

We questions. to will open now call the Operator?

Operator

Instructions] momentarily [Operator this will now will time, to we At the session. roster. assemble begin We our question-and-answer pause

[ph] question our ahead. of comes Investments. Jesse from Now, first Greenfield go Greenfield Please

Unidentified Analyst

you've dividend. my value, stockholders the the stockholders My stock I value it than upscale the on And consistent that try the amount other based of shown a upside time and isn't on book program were instituted in Mike, the fact, form? belief on a enrich reward congratulate if dividend to follow the that. dividend? want to the the with upon path would to price question -- is, we major in is book point At what increasing you a do of cash

appreciate that And on also the what you it. comment I'd of explain could you cons pros and think dividend? if are a So

Michael Falcone

capital of has shareholders resulted have of plan, to us and Sure. would back in first single-digits every high all, that buying buyback the via the in year. say, share And return the we shares sort usually in I to tried

value, environment not shareholders but shareholders. book to a out to ends get view that does. select some those view in do as -- to up ways, that to return to but view I at of kind it I being are to what willing program ways discount a So, in who I in nonetheless some that, the capital that's It current returned and

of between GAAP the the satisfied company. Board, As intrinsic think what the price the the basis measured the and not current a a and with are on on is discount measured share equity value company we we of value

doing we C-Corp. what gap. We move to looking are always that to current be the should convert close The of a try to implementation to is at that

return talked a other about capital a shareholders, had discussions have having We about range including of to to dividend. ways

shareholders. are it's be think additional it important. to this right dividend, are, returning the not we We're capital options of as fact I now, to cleaning not once consistently at a We and our value a next that and we and going question I'm I quarter dividend point for capital know if Admittedly, business that that our see to should. in have very share around when something but to view I Board we all to about we a that clear our plan And expenses saying capital a path income, about that address again Solar regularity where time business, seriousness with with balance a is, like, using at had and would because will least talked in think, moving towards talked operating not quarters I we buyback as continued of that we to the all to consider, consider certainly any our run the we improve think is more as we've return think are business, the of the access and the what way gains we have think I in the cost invest predictability down company point point those particularly the is clear rate when the quarter to what energy But be to gotten simplification. regularity. tremendous of quite is, efficient something the this would in a shareholders up some sort opportunity most via not the where things to yet. of today of terms those is predictable not of from know sheet capital earlier we you there sorts messy and alongside great to investments, are much very investments capital things. get

Unidentified Analyst

color to from to can some be from give year Okay. like two And there sheet us gains is second the the on ask you you to now, a where the by thing it? expect significant now, years value I'd opportunities book on balance realize any converting are

Michael Falcone

I So, of have the numbers put that we don't future surveying value. think about sort prediction are out

think the things essentially I zero, we are its face valued we we net have operating our two between fair the that appear on -- are significant, sub they and of on which biggest that face have value themselves and statement. Those balance don't we sheet. value income books. that debt losses, disconnects of our would disclosures talked and the numbers the things don't two the are about be things sheet at made the on balance that about are own The or things -- that in manifest

we and were. more Fort they balance perhaps could there of least clear of we to either case than of We parcels, that are with some also the and assets, that the for bonds Spanish out are eventually It's sort we create the monetize particularly gains at of we are in not will reason also of Spanish restructuring marketable some of part a Russell, gains -- they at this or Russell see try our Fort us to believe entirely to those if the program be robust other that in assets. [indiscernible] point though bonds was sheet, marketing to can looking

So haven't quantified go we sheet we but we still some for gains balance we public those consumption. as the believe yet have forward, on one-off

Unidentified Analyst

appreciate I Mike, you, update. for the Thank Thanks it.

Michael Falcone

[ph]. Jesse Thanks,

Operator

concludes question-and-answer conference I Falcone over This for session. back any to the turn to our would remarks. closing Instructions] [Operator like Mike

Michael Falcone

We very you book your value that as gap the to have remained current you and in as company. and of folks to Andrea, our stuck well both with dedicated the grow is value forward we to the our fact thank believe shareholders. to thank ownership share you to per have shares, the the efforts, what that close company, continuing we share look and true our appreciate the much, Yes, between price

And all Thank day season. upcoming so, and your Bye. you and you. thank very holiday enjoy this much,

Operator

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

may You disconnect. now

MMA Capital (Trading Symbol(s) MMAC MMAC) 12 Nov 182018 Q3 Earnings call transcript