2015 Q1 Form 10-Q Financial Statement

#000120677415001651 Filed on May 11, 2015

View on sec.gov

Income Statement

Concept 2015 Q1 2014 Q1
Revenue $17.20M $10.50M
YoY Change 63.81% 128.26%
Cost Of Revenue $5.500M $6.800M
YoY Change -19.12% 195.65%
Gross Profit $11.70M $3.700M
YoY Change 216.22% 60.87%
Gross Profit Margin 68.02% 35.24%
Selling, General & Admin $7.600M $1.200M
YoY Change 533.33% 200.0%
% of Gross Profit 64.96% 32.43%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $227.4K
YoY Change
% of Gross Profit 1.94%
Operating Expenses $2.920M $2.232M
YoY Change 30.82% 643.96%
Operating Profit $8.780M $1.468M
YoY Change 498.06% -26.59%
Interest Expense $4.745M $3.904M
YoY Change 21.56% 659.47%
% of Operating Profit 54.05% 265.91%
Other Income/Expense, Net $1.135M
YoY Change
Pretax Income $271.7K $2.483M
YoY Change -89.06% 24.14%
Income Tax -$145.5K $0.00
% Of Pretax Income -53.56% 0.0%
Net Earnings $417.2K $2.483M
YoY Change -83.19% 25.8%
Net Earnings / Revenue 2.43% 23.65%
Basic Earnings Per Share $0.05 $0.28
Diluted Earnings Per Share $0.05 $0.28
COMMON SHARES
Basic Shares Outstanding 7.971M shares 7.971M shares
Diluted Shares Outstanding 8.898M shares 8.898M shares

Balance Sheet

Concept 2015 Q1 2014 Q1
SHORT-TERM ASSETS
Cash & Short-Term Investments $38.00M $30.10M
YoY Change 26.25% 135.16%
Cash & Equivalents $38.02M $30.09M
Short-Term Investments
Other Short-Term Assets
YoY Change
Inventory
Prepaid Expenses
Receivables
Other Receivables
Total Short-Term Assets $38.00M $30.10M
YoY Change 26.25% 135.16%
LONG-TERM ASSETS
Property, Plant & Equipment
YoY Change
Goodwill $16.13M
YoY Change
Intangibles $5.472M
YoY Change
Long-Term Investments $592.4M $658.5M
YoY Change -10.04% 41.07%
Other Assets $3.000M $5.900M
YoY Change -49.15% -40.4%
Total Long-Term Assets $775.4M $668.1M
YoY Change 16.06% 39.5%
TOTAL ASSETS
Total Short-Term Assets $38.00M $30.10M
Total Long-Term Assets $775.4M $668.1M
Total Assets $813.4M $698.2M
YoY Change 16.5% 41.99%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $12.20M $3.100M
YoY Change 293.55% -13.89%
Accrued Expenses $1.900M
YoY Change 850.0%
Deferred Revenue
YoY Change
Short-Term Debt $399.5M $456.6M
YoY Change -12.51% 54.47%
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $415.3M $465.2M
YoY Change -10.73% 55.38%
LONG-TERM LIABILITIES
Long-Term Debt $172.6M $54.80M
YoY Change 214.96%
Other Long-Term Liabilities $35.30M $1.600M
YoY Change 2106.25% 45.45%
Total Long-Term Liabilities $207.9M $56.40M
YoY Change 268.62% 5027.27%
TOTAL LIABILITIES
Total Short-Term Liabilities $415.3M $465.2M
Total Long-Term Liabilities $207.9M $56.40M
Total Liabilities $623.1M $521.5M
YoY Change 19.49% 73.57%
SHAREHOLDERS EQUITY
Retained Earnings $6.215M -$5.923M
YoY Change -204.94% -185.33%
Common Stock $798.00 $798.00
YoY Change 0.0% 0.0%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $170.4M $158.3M
YoY Change
Total Liabilities & Shareholders Equity $813.4M $698.2M
YoY Change 16.5% 41.99%

Cashflow Statement

Concept 2015 Q1 2014 Q1
OPERATING ACTIVITIES
Net Income $417.2K $2.483M
YoY Change -83.19% 25.8%
Depreciation, Depletion And Amortization $227.4K
YoY Change
Cash From Operating Activities -$30.10M $1.700M
YoY Change -1870.59% 1218.03%
INVESTING ACTIVITIES
Capital Expenditures
YoY Change
Acquisitions
YoY Change
Other Investing Activities $14.00M -$102.1M
YoY Change -113.71% -65.91%
Cash From Investing Activities $14.00M -$102.1M
YoY Change -113.71% -65.91%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $0.00
YoY Change -100.0%
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 20.30M 73.50M
YoY Change -72.38% -74.92%
NET CHANGE
Cash From Operating Activities -30.10M 1.700M
Cash From Investing Activities 14.00M -102.1M
Cash From Financing Activities 20.30M 73.50M
Net Change In Cash 4.200M -26.90M
YoY Change -115.61% 330.21%
FREE CASH FLOW
Cash From Operating Activities -$30.10M $1.700M
Capital Expenditures
Free Cash Flow
YoY Change

Facts In Submission

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CY2015Q1 us-gaap Proceeds From Sale And Collection Of Mortgage Notes Receivable
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7460149 USD
CY2015Q1 us-gaap Payments To Acquire Investments
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USD
CY2014Q1 us-gaap Payments To Acquire Investments
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11720695 USD
CY2015Q1 us-gaap Proceeds From Collection Of Retained Interest In Securitized Receivables
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3942700 USD
CY2014Q1 us-gaap Proceeds From Collection Of Retained Interest In Securitized Receivables
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8034673 USD
CY2015Q1 zfc Proceeds From Sale Of Real Estate Securities
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USD
CY2014Q1 zfc Proceeds From Sale Of Real Estate Securities
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2072198 USD
CY2015Q1 us-gaap Payments To Acquire Other Investments
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CY2014Q1 us-gaap Payments To Acquire Other Investments
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10676953 USD
CY2015Q1 us-gaap Payments For Derivative Instrument Investing Activities
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CY2014Q1 us-gaap Payments For Derivative Instrument Investing Activities
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4803750 USD
CY2015Q1 us-gaap Increase Decrease In Restricted Cash
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-4112699 USD
CY2014Q1 us-gaap Increase Decrease In Restricted Cash
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3722128 USD
CY2015Q1 us-gaap Net Cash Provided By Used In Investing Activities Continuing Operations
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14038710 USD
CY2014Q1 us-gaap Net Cash Provided By Used In Investing Activities Continuing Operations
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-102121660 USD
CY2015Q1 us-gaap Proceeds From Repayments Of Lines Of Credit
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27468994 USD
CY2014Q1 us-gaap Proceeds From Repayments Of Lines Of Credit
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CY2015Q1 us-gaap Proceeds From Repayments Of Other Debt
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-244515 USD
CY2014Q1 us-gaap Proceeds From Repayments Of Other Debt
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61342915 USD
CY2015Q1 us-gaap Proceeds From Short Term Debt
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1016063 USD
CY2014Q1 us-gaap Proceeds From Short Term Debt
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29607805 USD
CY2015Q1 us-gaap Repayments Of Short Term Debt
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4404331 USD
CY2014Q1 us-gaap Repayments Of Short Term Debt
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CY2015Q1 zfc Payments Of Dividends Common Stock And Noncontrolling Interest
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3559120 USD
CY2014Q1 zfc Payments Of Dividends Common Stock And Noncontrolling Interest
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8452910 USD
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20277091 USD
CY2014Q1 us-gaap Net Cash Provided By Used In Financing Activities Continuing Operations
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73478889 USD
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4231305 USD
CY2014Q1 us-gaap Cash And Cash Equivalents Period Increase Decrease
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-26975796 USD
CY2013Q4 us-gaap Cash And Cash Equivalents At Carrying Value
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57060806 USD
CY2014Q1 us-gaap Cash And Cash Equivalents At Carrying Value
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30085010 USD
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3147960 USD
CY2014Q1 us-gaap Interest Paid
InterestPaid
2622379 USD
CY2015Q1 us-gaap Income Taxes Paid
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CY2014Q1 us-gaap Income Taxes Paid
IncomeTaxesPaid
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CY2014Q1 us-gaap Dividends Payable Current And Noncurrent
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3559120 USD
CY2015Q1 us-gaap Nature Of Operations
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<div id='EdgarSAA123457890000' style="font-family : 'Times New Roman';"> <p style="margin: 0pt 0pt 10pt; page-break-after: avoid; text-align: justify; font-family: 'times new roman';"><font style="font-family: 'Times New Roman'; font-size: 10pt;"><strong>1.&#160; Formation and Organization</strong></font></p> <p style="margin: 0pt 0pt 10pt; text-align: justify; text-indent: 36pt; font-family: 'times new roman';"><font style="font-family: 'Times New Roman'; font-size: 10pt;">ZAIS Financial Corp. (the "Company") is a Maryland corporation that originates, acquires, finances, sells, services and manages residential mortgage loans.&#160;GMFS, LLC ("GMFS"), a mortgage banking platform the Company acquired in October 2014, originates and sells mortgage loans and the Company acquires&#160;performing, re-performing and newly originated loans through other channels. The Company also invests in, finances and manages residential mortgage-backed securities ("RMBS") that are not issued or guaranteed by a federally chartered corporation, such as the Federal National Mortgage Association (&#147;Fannie Mae&#148;), the Federal Home Loan Mortgage Corporation (&#147;Freddie Mac&#148;), or an agency of the U.S. Government, such as Government National Mortgage Association (&#147;Ginnie Mae&#148;) ("non-Agency RMBS") with an emphasis on securities that, when originally issued, were rated in the highest rating category by one or more of the nationally recognized statistical rating organizations and mortgage servicing rights ("MSRs"). The Company also has the discretion to invest in RMBS that are issued or guaranteed by a federally chartered corporation or a U.S. Government agency ("Agency RMBS"), including through To-Be-Announced ("TBA") contracts, and in other real estate-related and financial assets, such as interest only strips created from RMBS ("IOs"), commercial mortgage-backed securities ("CMBS") and asset-backed securities ("ABS"). The Company refers collectively to the assets it targets as its target assets.</font></p> <p style="margin: 0pt 0pt 10pt; text-align: justify; text-indent: 36pt; font-family: 'times new roman';"><font style="font-family: 'Times New Roman'; font-size: 10pt;">The Company </font><font style="font-family: 'Times New Roman'; font-size: 10pt;">was incorporated in Maryland on May 24, 2011, and has elected to be taxed and to qualify as a real estate investment trust ("REIT") beginning with the taxable year ended December</font><font style="font-family: 'Times New Roman'; font-size: 10pt;">&#160;</font><font style="font-family: 'Times New Roman'; font-size: 10pt;">31, 2011.&#160; The Company completed its formation transaction and commenced operations on July 29, 2011.&#160; On February</font><font style="font-family: 'Times New Roman'; font-size: 10pt;">&#160;</font><font style="font-family: 'Times New Roman'; font-size: 10pt;">13, 2013, the Company completed its initial public offering ("IPO"), pursuant to which the Company sold <font>5,650,000</font> shares of its common stock at a price of $<font>21.25</font> per share for gross proceeds of $<font>120.1</font></font><font style="font-family: 'Times New Roman'; font-size: 10pt;">&#160;</font><font style="font-family: 'Times New Roman'; font-size: 10pt;">million.&#160; Net proceeds after the payment of offering costs of $<font>1.2</font> million were $<font>118.9</font> million.</font></p> <p style="margin: 0pt 0pt 10pt; text-align: justify; text-indent: 36pt; font-family: 'times new roman';"><font style="font-family: 'Times New Roman'; font-size: 10pt;">The Company's charter authorizes the issuance of up to <font>500,000,000</font> shares of common stock with a par value of $<font>0.0001</font> per share, and <font>50,000,000</font> shares of preferred stock, with a par value of $<font>0.0001</font> per share.&#160; The Company's board of directors is authorized to amend its charter, without the approval of stockholders, to increase the aggregate number of authorized shares of capital stock or the number of shares of any class or series of capital stock or to classify and reclassify any unissued shares of its capital stock into other classes or series of stock that the Company has the authority to issue.</font></p> <p style="margin: 0pt 0pt 10pt; text-align: justify; text-indent: 36pt; font-family: 'times new roman';"><font style="font-family: 'Times New Roman'; font-size: 10pt;">The Company is externally managed by ZAIS REIT Management, LLC (the "Advisor"), a subsidiary of ZAIS Group, LLC ("ZAIS"), and has no employees except for those employed by GMFS. The Company is the sole general partner of, and conducts substantially all of its business through, ZAIS Financial Partners, L.P., the Company's consolidated operating partnership subsidiary (the "Operating Partnership").</font></p> <p style="margin: 0pt 0pt 10pt; text-align: justify; text-indent: 36pt; font-family: 'times new roman';"><font style="font-family: 'Times New Roman'; font-size: 10pt;">The Company's income is generated primarily by the net spread between the income it earns on its assets and the cost of its financing and hedging activities, and the origination, sale and servicing of residential mortgage loans by its mortgage banking operations.&#160; The Company's objective is to provide attractive risk-adjusted returns to its stockholders, primarily through quarterly distributions and secondarily through capital appreciation.</font></p> </div>
CY2015Q1 us-gaap Number Of Operating Segments
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1875628 USD
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CY2015Q1 us-gaap Use Of Estimates
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<div id='EdgarSAA123457890000' style="font-family : 'Times New Roman';"> <p style="margin: 0pt 0pt 10pt; page-break-after: avoid; text-align: justify; font-family: 'times new roman';"><font style="font-family: 'Times New Roman'; font-size: 10pt; font-style: italic;"><strong>Estimates</strong></font></p> <p style="margin: 0pt 0pt 10pt; text-align: justify; text-indent: 36pt; font-family: 'times new roman';"><font style="font-family: 'Times New Roman'; font-size: 10pt;">The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.&#160; Actual results may ultimately differ from those estimates.</font></p> </div>
CY2015Q1 us-gaap Guarantees Indemnifications And Warranties Policies
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<div id='EdgarSAA123457890000' style="font-family : 'Times New Roman';"> <p style="margin: 0pt 0pt 10pt; page-break-after: avoid; text-align: justify; font-family: 'times new roman';"><font style="font-family: 'Times New Roman'; font-size: 10pt; font-style: italic;"><strong>Liability for Loan Repurchases and Indemnifications</strong></font></p> <p style="margin: 0pt 0pt 10pt; text-align: justify; text-indent: 36pt; font-family: 'times new roman';"><font style="font-family: 'Times New Roman'; font-size: 10pt;">Loans sold to investors by the Company and which met investor and agency underwriting guidelines at the time of sale may be subject to repurchase or indemnification in the event of specific default by the borrower or subsequent discovery that underwriting standards were not met.&#160; The Company may, upon mutual agreement, agree to repurchase the loans or indemnify the investor against future losses on such loans.&#160; In such cases, the Company bears any subsequent credit loss on the loans.&#160; The Company has established a liability for potential losses related to these representations and warranties with a corresponding provision recorded for loan losses.&#160; The liability is included in accounts payable and other liabilities in the Company's consolidated balance sheets and the provision is included in mortgage banking activities, net in the Company's consolidated statements of operations.&#160; In assessing the adequacy of the liability, management evaluates various factors including actual losses on repurchases and indemnifications during the period, historical loss experience, known delinquent and other problem loans, and economic trends and conditions in the industry.&#160; Actual losses incurred are reflected as charge-offs against the reserve liability.</font></p> <p style="margin: 0pt 0pt 10pt; text-align: justify; text-indent: 36pt; font-family: 'times new roman';"><font style="font-family: 'Times New Roman'; font-size: 10pt;">Because of the uncertainty in the various estimates underlying the loan indemnification reserve, there is a range of losses in excess of the recorded loan indemnification reserve that is reasonably possible.&#160; The estimate of the range of possible losses for representations and warranties does not represent a probable loss, and is based on current available information, significant judgment, and a number of assumptions that are subject to change.</font></p> </div>
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197085 USD
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591255 USD
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788340 USD
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CY2015Q1 us-gaap Finite Lived Intangible Assets Amortization Expense Year Three
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455004 USD
CY2015Q1 us-gaap Finite Lived Intangible Assets Amortization Expense Year Five
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455004 USD
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4326116 USD
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259217202 USD
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277610358 USD
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187500000 USD
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140300000 USD
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267509905 USD
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223401697 USD
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USD
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55532098 USD
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6605967 USD
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5649553 USD
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0.0175 pure
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0.1220 pure
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1514307 USD
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1282669 USD
CY2015Q1 zfc Mortgage Loans In Process Of Foreclosure Amount
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6881795 USD
CY2014Q4 zfc Mortgage Loans In Process Of Foreclosure Amount
MortgageLoansInProcessOfForeclosureAmount
4762509 USD
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92512390 USD
CY2015Q1 us-gaap Payments For Origination Of Mortgage Loans Held For Sale
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451669250 USD
CY2014 us-gaap Payments For Origination Of Mortgage Loans Held For Sale
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253934598 USD
CY2015Q1 us-gaap Proceeds From Sale Of Mortgage Loans Held For Sale
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431251708 USD
CY2014 us-gaap Proceeds From Sale Of Mortgage Loans Held For Sale
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245140671 USD
CY2014 zfc Gain Loss On Sales Of Mortgage Loans Held For Sale
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-3615357 USD
CY2015Q1 us-gaap Principal Amount Outstanding On Loans Held For Sale Or Securitization
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120890389 USD
CY2014Q4 us-gaap Principal Amount Outstanding On Loans Held For Sale Or Securitization
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92917659 USD
CY2015Q1 us-gaap Payments To Purchase Mortgage Loans Held For Sale
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USD
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32300337 USD
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3409899 USD
CY2014 us-gaap Servicing Asset At Fair Value Additions
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2763014 USD
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-2710478 USD
CY2014 us-gaap Asset At Fair Value Changes In Fair Value Resulting From Changes In Assumptions
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-1420925 USD
CY2015Q1 us-gaap Servicing Asset At Fair Value Other Changes In Fair Value
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CY2014 us-gaap Servicing Asset At Fair Value Other Changes In Fair Value
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-263448 USD
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2384402 USD
CY2015Q1 us-gaap Late Fee Income Generated By Servicing Financial Assets Amount
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35 USD
CY2015Q1 zfc Contractually Specified Subservicing Fees Amount
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747338 USD
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1637099 USD
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878401 USD
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684256 USD
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USD
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2482859 USD
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10956258 USD
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192866 USD
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388997 USD
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926914 shares
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926914 shares
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shares
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shares
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0.40
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0.40
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43466 USD
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258654 USD
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USD
CY2014Q1 zfc Interest Expense On Convertible Notes
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1779560 shares
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517524816 USD
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517524816 USD
CY2015Q1 us-gaap Derivative Liability Securities Sold Under Agreements To Resell Securities Loaned Collateral Right To Reclaim Securities
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516644543 USD
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880273 USD
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0.40
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89250 USD
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P5Y
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182987 USD
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8256 USD
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533333 USD
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555898 USD
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438305 USD
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151985 USD
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USD
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493384515 USD
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493384515 USD
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684256 USD
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CY2015Q1 us-gaap Derivative Liability Securities Sold Under Agreements To Resell Securities Loaned Asset
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CY2015Q1 us-gaap Derivative Liability Securities Sold Under Agreements To Resell Securities Loaned Amount Offset Against Collateral
DerivativeLiabilitySecuritiesSoldUnderAgreementsToResellSecuritiesLoanedAmountOffsetAgainstCollateral
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CY2015Q1 us-gaap Transfer To Other Real Estate
TransferToOtherRealEstate
189648 USD
CY2014Q1 us-gaap Transfer To Other Real Estate
TransferToOtherRealEstate
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CY2015Q1 dei Document Period End Date
DocumentPeriodEndDate
2015-03-31
CY2015Q1 dei Amendment Flag
AmendmentFlag
false
CY2015Q1 dei Current Fiscal Year End Date
CurrentFiscalYearEndDate
--12-31
CY2015Q1 dei Entity Filer Category
EntityFilerCategory
Accelerated Filer
CY2015Q2 dei Entity Common Stock Shares Outstanding
EntityCommonStockSharesOutstanding
7970886 shares
CY2015Q1 dei Document Fiscal Year Focus
DocumentFiscalYearFocus
2015
CY2015Q1 dei Document Fiscal Period Focus
DocumentFiscalPeriodFocus
Q1
CY2015Q1 dei Trading Symbol
TradingSymbol
ZFC
CY2014Q1 us-gaap Deferred Income Tax Expense Benefit
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CY2015Q1 us-gaap Current Federal Tax Expense Benefit
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CY2014Q1 us-gaap Current Federal Tax Expense Benefit
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CY2014Q1 us-gaap Current State And Local Tax Expense Benefit
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CY2015Q1 us-gaap Current Income Tax Expense Benefit
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CY2014Q1 us-gaap Current Income Tax Expense Benefit
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-120431 USD
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-25098 USD
CY2015Q1 us-gaap Deferred Income Tax Expense Benefit
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-145529 USD
CY2015Q1 dei Entity Registrant Name
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ZAIS Financial Corp.
CY2015Q1 dei Entity Central Index Key
EntityCentralIndexKey
0001527590
CY2015Q1 dei Document Type
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10-Q
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0.0000 pure
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0.0027 pure
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0.0000 pure
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0.3182 pure
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0.0000 pure
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1.0968 pure
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0.3500 pure
CY2015Q1 us-gaap Effective Income Tax Rate Continuing Operations
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-0.5356 pure
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EffectiveIncomeTaxRateContinuingOperations
0.0000 pure
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43473 USD
CY2015Q1 us-gaap Deferred Tax Assets Other
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CY2014Q1 us-gaap Deferred Tax Assets Other
DeferredTaxAssetsOther
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3090288 USD
CY2014Q1 us-gaap Deferred Tax Assets Gross
DeferredTaxAssetsGross
43473 USD
CY2015Q1 us-gaap Deferred Tax Liabilities Other
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1335398 USD
CY2015Q1 us-gaap Deferred Income Tax Liabilities
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1335398 USD
CY2014Q1 us-gaap Deferred Income Tax Liabilities
DeferredIncomeTaxLiabilities
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758364 USD
CY2014Q1 us-gaap Deferred Tax Assets Valuation Allowance
DeferredTaxAssetsValuationAllowance
43473 USD
CY2015Q1 us-gaap Deferred Tax Assets Liabilities Net
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996526 USD
CY2014Q1 us-gaap Deferred Tax Assets Liabilities Net
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CY2015Q1 us-gaap Realized Investment Gains Losses
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164788 USD
CY2015Q1 zfc Other Miscellaneous Expenses
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907776 USD
CY2015Q1 us-gaap Quantifying Misstatement In Current Year Financial Statements Amount
QuantifyingMisstatementInCurrentYearFinancialStatementsAmount
96000 USD

Files In Submission

Name View Source Status
0001206774-15-001651-index-headers.html Edgar Link pending
0001206774-15-001651-index.html Edgar Link pending
0001206774-15-001651.txt Edgar Link pending
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exhibit31-1.htm Edgar Link pending
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