Business Context and Reporting Period
This Form 8-K is filed by Five Oaks Investment Corp. (not Lument Finance Trust, Inc.) for the reporting period ending December 30, 2015. The filing discloses a material event regarding the company's financing arrangements under Item 7.01 Regulation FD Disclosure.
Key Financial Metrics
The filing does not provide comprehensive financial statements, revenue, profit, or cash flow data. It focuses specifically on liquidity and debt facilities:
- Terminated Facility: A $100,000,000 Master Repurchase Agreement with Bank of America, N.A. was not renewed upon its maturity on December 30, 2015.
- Active Warehouse Lines: The company maintains repurchase agreements with Barclays Bank PLC and Credit Suisse First Boston Mortgage Capital LLC with an aggregate maximum capacity of $275,000,000.
- Utilization: Approximately $8,900,000 of the active $275,000,000 capacity is currently used.
- Additional Funding: The company has obtained approval from the Federal Home Loan Bank of Indianapolis to fund acquisitions of prime jumbo loans.
Material Changes
The primary material change is the non-renewal of the $100,000,000 facility with Bank of America, N.A. This facility, originally established on December 30, 2014, was used by the subsidiary Five Oaks Acquisition Corp. (FOAC) to sell eligible residential mortgage loans. Despite this termination, the company reports continued access to significant liquidity through other lenders.
Outlook and Management Commentary
Management indicates that the non-renewal of the Bank of America facility does not impair the company's ability to fund its operations. FOAC continues to utilize warehouse lines with Barclays and Credit Suisse to fund the purchase of prime jumbo loans. The company also highlights its diversification of funding sources with the new approval from the Federal Home Loan Bank of Indianapolis.
Investor Verification Checklist
- Verify the impact of the $100,000,000 facility termination on the company's overall leverage and cost of funds.
- Confirm the terms and interest rates of the remaining $275,000,000 facilities with Barclays and Credit Suisse.
- Assess the utilization rate of the Federal Home Loan Bank of Indianapolis funding approval.
- Review subsequent filings to ensure no further disruptions to the company's warehouse lending capabilities.