Income Opportunity Realty Investors, Inc. Reports Fourth Quarter and Full Year 2020 Results

Rhea-AI Summary

Income Opportunity Realty Investors (IOR) reported a net income of $1.3 million, or $0.32 per share, for Q4 2020, up from $1.1 million, or $0.25 per share, in Q4 2019. For the full year, net income rose to $4.2 million, or $1.01 per share, compared to $4.1 million, or $0.99 per share, in 2019. Interest income decreased by $1.2 million to $5.4 million due to lower prime rates, while other income surged to $1.5 million, primarily from the collection of previously written-off notes.

Positive

• Net income for Q4 2020 was $1.3 million, an increase of 18.2% year-over-year.
• Full-year net income grew to $4.2 million, reflecting a positive trend.
• Other income for the year increased significantly to $1.5 million from $237 thousand.

Negative

• Interest income fell by $1.2 million to $5.4 million due to a decrease in the prime rate.
• General and administrative expenses remained high at $450,000, with little reduction compared to 2019.

Income Opportunity Realty Investors, Inc. (NYSE American: IOR), a Dallas-based real estate investment company, today reported results of operations for the fourth quarter ended December 31, 2020. For the three months ended December 31, 2020, we reported a net income applicable to common shares of $1.3 million or $0.32 per share, as compared to net income of $1.1 million or $0.25 per diluted share for the same period ended 2019.

For the full year ended December 31, 2020 the Company reported net income applicable to common shares of $4.2 million or $1.01 per diluted earnings per share for the year ended December 31, 2020, compared to a net income applicable to common shares of $4.1 million or $.99 per diluted earnings per share for the same period ended 2019.

Our primary business is investing in mortgage and note receivables.

Expenses

General and administrative expenses were $450,000 for the year ended December 31, 2020. General and administrative expenses were $494,000 for the year ended December 31, 2019.

Net income fee to related party was $371,000 for the year ended December 31, 2020. This represents an increase of $14,000, compared to the net income fee of $357,000 for the year ended December 31, 2019. The net income fee paid is calculated at the rate of 7.5% of net income.

Advisory fees were $768,000 for the year ended December 31, 2020. This represents an increase of $31,000 compared to advisory fees of $737,000 for the year ended December 31, 2019. Advisory fees are computed based on a gross asset fee of 0.0625% per month (0.75% per annum) of the average of the gross asset value.

Other income (expense)

Interest income was $5.4 million for the year ended December 31, 2020. This represents a decrease of $1.2 million, compared to interest income of $6.6 million for the year ended December 31, 2019. This decrease was primarily due to a decrease in the prime rate.

Other income was $1.5 million for the year ended December 31, 2020. This represents an increase of $1.3 million compared to other income of $237 thousand for the year ended December 31, 2019. This increase was primarily due to collection of a note previously written off.

Income tax expense was $1.1 million for both 2020 and 2019.

About Income Opportunity Realty Investors, Inc.

Income Opportunity Realty Investors, Inc., a Dallas based company that holds both mortgages and notes receivable. For more information, visit the Company’s website at www.incomeopp-realty.com.

INCOME OPPORTUNITY REALTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
		For the Years Ended December 31,
		2020				2019				2018
		(dollars in thousands, except per share amounts)
Revenues:
Revenue from operations		$	-			$	-			$	-
Expenses:
General and administrative (including $247, $260, and $284 for the year ended 2020, 2019, and 2018 respectively, to related parties)			450				494				494
Net income fee to related party			371				357				631
Advisory fee to related party			768				737				685
Total operating expenses			1,589				1,588				1,810
Net operating loss			(1,589	)			(1,588	)			(1,810	)
Other income / expenses:
Interest income from related parties			5,373				6,574				4,880
Other Income			1,550				237				-
Total other income			6,923				6,811				4,880
Income before gain on sale of real estate land			5,334				5,223				3,070
Gain on sale of real estate land			-				-				7,323
Income before taxes			5,334				5,223				10,393
Income tax expense - current			1,120				1,078				1,391
Income tax expense - deferred			-				-				792
Net income		$	4,214			$	4,145			$	8,210
Earnings per share - basic and diluted
Net income		$	1.01			$	0.99			$	1.97
Weighted average common shares used in computing earnings per share			4,168,414				4,168,414				4,168,214

INCOME OPPORTUNITY REALTY INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS
		December 31,				December 31,
		2020				2019
		(dollars in thousands, except par value amount)
Assets
Current assets
Cash and cash equivalents			12				5
Receivable and accrued interest from related parties			90,526				86,221
Total current assets			90,538				86,226
Non current assets
Notes and interest receivable from related parties			13,930				14,030
Total non current assets			13,930				14,030
Other assets			-				-
Total Assets		$	104,468			$	100,256
Liabilities and Shareholders' Equity
Liabilities
Accounts payable		$	12			$	14
Total liabilities			12				14
Shareholders’ equity
Common stock, $.01 par value, authorized 10,000,000 shares; issued 4,173,675 and outstanding 4,168,414 shares in 2020 and 2019			42				42
Treasury stock at cost, 5,261 shares in 2020 and 2019			(39	)			(39	)
Paid-in capital			61,955				61,955
Retained Earnings			42,498				38,284
Total shareholders' equity			104,456				100,242
Total liabilities and shareholders' equity		$	104,468			$	100,256

 

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FAQ

What were Income Opportunity Realty Investors' Q4 2020 financial results?

In Q4 2020, IOR reported a net income of $1.3 million, or $0.32 per share, an increase from $1.1 million, or $0.25 per share, in Q4 2019.

How did IOR perform financially for the full year 2020?

IOR reported a full-year net income of $4.2 million, or $1.01 per diluted share, compared to $4.1 million, or $0.99 per diluted share, for 2019.

What caused the decrease in interest income for IOR in 2020?

The decrease in interest income by $1.2 million to $5.4 million was primarily due to a decrease in the prime rate.

What contributed to the increase in IOR's other income for 2020?

The other income rose to $1.5 million for 2020, mainly due to the collection of a previously written-off note.

Did IOR's administrative expenses change in 2020?

General and administrative expenses for IOR were $450,000 in 2020, slightly lower than $494,000 in 2019.