WALNUT CREEK, Calif., Aug. 8, 2017 /PRNewswire/ -- Owens Realty Mortgage, Inc. (NYSE MKT: ORM) (the "Company") today announced that its Board of Directors and the Company's external manager, Owens Financial Group, Inc. (the "Manager") have agreed to adjust the methodology used to calculate the annual fee payable to the Manager. Pursuant to the details contained within the Form 10-Q filed today with the Securities and Exchange Commission, the management fee would be reduced (but not increased) based on a calculation utilizing 1.5% of the Company's stockholders' equity, as adjusted, if this results in lower fees, as opposed to 2.75% of the average unpaid balance of the Company's loans. As part of the revised calculation, stockholders' equity is equal to the sum of the capital raised from all Company stock issuances (including the book value of the Company's Common Stock and Additional Paid-in Capital at inception of the Company), less stock repurchases, plus Retained Earnings and not including any unrealized gains and losses, one-time events pursuant to changes in GAAP and certain other non-cash charges. This adjustment is effective as of July 2017, and will remain in effect until the Company's next stockholders' meeting is held.
During this interim period, the compensation committee of the Board of Directors, along with leading independent consultant, FTI Consulting, will continue to analyze and evaluate additional strategic options related to the Company's current external management structure.
Dennis G. Schmal, Lead Independent Director, stated: "We are pleased to reach agreement on the revised fee structure, reflecting the continued execution of our strategy of liquidating real estate assets, investing proceeds into commercial real estate loans, and delivering a consistent, competitive risk‐adjusted yield to shareholders. Furthermore, this interim fee calculation more closely aligns us with industry standards and is expected to provide better terms to our stockholders while enhancing their returns."
There will be no change to the loan servicing fees or expense reimbursements payable by the Company to the Manager, and the Manager would also continue to receive the fees paid by the Company's borrowers to the Manager.
PremierCounsel LLP and Vinson & Elkins L.L.P. are representing Owens Realty Mortgage, Inc.
About Owens Realty Mortgage, Inc.
Owens Realty Mortgage, Inc., a Maryland corporation, is a specialty finance mortgage company organized to qualify as a real estate investment trust ("REIT") that focuses on the origination, investment, and management of commercial real estate mortgage loans. We provide customized, short-term acquisition and transition capital to small balance and middle-market investors that require speed and flexibility. Our primary objective is to provide investors with attractive current income and long-term shareholder value. Owens Realty Mortgage, Inc., is headquartered in Walnut Creek, California, and is externally managed and advised by Owens Financial Group, Inc.
Additional information can be found on the Company's website at www.owensmortgage.com.
This press release includes "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements about Owens Realty Mortgage Inc.'s plans, strategies, and prospects are based on current information, estimates, and projections; they are subject to risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ from expectations, estimates and projections and, consequently, readers should not rely on these forward-looking statements as predictions of future events. Words such as "expect," "target," "assume," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "believe," "predicts," "potential," "continue," and similar expressions are intended to identify such forward-looking statements.
Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. The Company does not undertake or accept any obligation to release publicly any updates or revisions to any forward-looking statement to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based. Additional information concerning these and other risk factors is contained in the Company's most recent filings with the Securities and Exchange Commission. All subsequent written and oral forward-looking statements concerning the Company or matters attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above.
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SOURCE Owens Realty Mortgage, Inc.