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Article Excerpt
PHILADELPHIA -- RAIT Financial Trust ("RAIT") (NYSE: RAS) today announced results for the third quarter ended September 30, 2009.
Summary
* Net loss allocable to common shares of $24.7 million, or $0.38 total loss per share - diluted for the three months ended September 30, 2009 and $456.8 million, or $7.03 total loss per share - diluted for the nine months ended September 30, 2009
* Estimated REIT taxable income, a non-GAAP financial measure of $44.8 million, or $0.69 per share - diluted for the three months ended September 30, 2009 and estimated REIT taxable loss of $26.2 million, or $0.40 per share - diluted for the nine months ended September 30, 2009
* Debt to equity ratio improved to 3.3 times at September 30, 2009 as compared to 5.4 times at December 31, 2008
* Launched fixed income securities and commercial real estate advisory businesses
* Book value was $8.57 per common share at September 30, 2009
Third Quarter 2009 Results
RAIT reported net loss allocable to common shares for the three-month period ended September 30, 2009 of $24.7 million, or $0.38 total loss per share - diluted based on 65.0 million weighted-average shares outstanding - diluted, as compared to net loss allocable to common shares for the three-month period ended September 30, 2008 of $181.8 million, or total loss per share - diluted of $2.82 based on 64.5 million weighted-average shares outstanding - diluted. RAIT reported net loss allocable to common shares for the nine-month period ended September 30, 2009 of $456.8 million, or $7.03 total loss per share - diluted based on 65.0 million weighted-average shares outstanding - diluted, as compared to net income allocable to common shares for the nine-month period ended September 30, 2008 of $62.6 million, or $1.00 total earnings per share - diluted based on 62.9 million weighted-average shares outstanding - diluted.
RAIT's net losses for the three-month and nine-month periods ended September 30, 2009 were primarily caused by the following:
Gains (losses) on sales of assets. During the nine-month period ended September 30, 2009, we sold all of our equity and a portion of our non-investment grade notes in the Taberna III, Taberna IV, Taberna VI and Taberna VII securitizations to a non-affiliated party and all of our interests in our six residential mortgage securitizations. Upon completion of these sales, we deconsolidated these securitizations and removed the associated assets and liabilities from our consolidated balance sheet. The deconsolidation of the Taberna securitizations on June 25, 2009 resulted in a loss of $313.8 million and the deconsolidation of the residential mortgage securitizations on July 16, 2009 resulted in a loss of $61.8 million.
Provision for losses. The provision for losses recorded during the three-month and nine-month periods ended September 30, 2009 was $18.5 million and $204.1 million, respectively, and resulted from increased delinquencies in our residential mortgage loans and additional non-performing loans in our commercial real estate portfolios.
Asset impairments. We recorded asset impairments of $46.0 million during the nine-month period ended September 30, 2009. These asset impairments were comprised of investments in securities, primarily our equity investments in our Taberna Europe I and Taberna Europe II securitizations, whose market values were reduced due to credit conditions or because of increased delinquencies of the underlying collateral. No asset impairment expense was recorded during the three-month period ended September 30, 2009.
Balance Sheet
The balance sheet at September 30, 2009 reflected substantial changes from our balance sheet at December 31, 2008 due to the...
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