Form 8-K Silver Bay Realty Trust For: Nov 05

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November 5, 2014 4:07 PM EST




�


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC��20549

FORM 8-K

Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
�
Date of Report (Date of earliest event reported):��November 5, 2014

Silver Bay Realty Trust Corp.
(Exact name of registrant as specified in its charter)


Maryland
�
001-35760
�
90-0867250
(State or other jurisdiction
of incorporation)
�
(Commission
File Number)
�
(I.R.S. Employer
Identification No.)
�

3300 Fernbrook Lane North, Suite 210
Plymouth, MN 55447
(Address of principal executive offices)
(Zip Code)

Registrant's telephone number, including area code:�� (952) 358-4400

Not Applicable
(Former name or former address, if changed since last report)
�
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


o
Written communications pursuant to Rule 425 under the Securities Act��(17 CFR 230.425)
�
�
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
�
�
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
�
�
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
�


�









�
�
Item 2.02���������� Results of Operations and Financial Condition

On November 5, 2014, Silver Bay Realty Trust Corp. (Silver Bay) issued a press release announcing its financial results for the fiscal quarter ended September 30, 2014. A copy of the press release and the 2014 Third Quarter Earnings Call Presentation are attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated herein by reference.

The information in this Current Report, including Exhibits 99.1 and 99.2 attached hereto, is furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed to be filed for any other purpose, including for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in Item 2.02 of this Current Report, including Exhibits 99.1 and 99.2, shall not be deemed incorporated by reference into any filing of the registrant under the Securities Act of 1933 or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filings (unless the registrant specifically states that the information or exhibit in this particular Current Report is incorporated by reference).










�

�






Item 9.01
Financial Statements and Exhibits.

(d) Exhibits


Exhibit No.
Description
�
�
99.1
Press Release, dated November 5, 2014, issued by Silver Bay Realty Trust Corp. announcing Third Quarter 2014 results
99.2
2014 Third Quarter Earnings Call Presentation

�
�
�
�
�
�
�
�
�


�
�
�
�
�




�
�





�
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


�
SILVER BAY REALTY TRUST CORP.
�
�
�
�
�
�
�
By:
/s/ DANIEL J. BUECHLER
�
�
Daniel J. Buechler
�
�
General Counsel and Secretary
�
�
�
Date: November 5, 2014
�
�
�















































Exhibit Index

Item No.
Description
99.1
Press Release, dated November 5, 2014, issued by Silver Bay Realty Trust Corp. announcing Third Quarter 2014 results
99.2
2014 Third Quarter Earnings Call Presentation




SILVER BAY REALTY TRUST CORP.
REPORTS THIRD QUARTER 2014 FINANCIAL RESULTS
Estimated Portfolio Value Exceeds $1.0 Billion
Generated Core Funds from Operations of $0.08 per Share

NEW YORK, November 5, 2014 - Silver Bay Realty Trust Corp. (NYSE: SBY) or Silver Bay, or the Company, today announced its financial results for the quarter ended September�30, 2014.

Highlights

�
Successfully completed internalization of the Company's management on September 30, 2014
�
Closed a $312.7 million securitization transaction with a blended effective interest rate of LIBOR plus 1.92%
�
Total revenue increased 4% quarter-over-quarter to $20.0 million
�
Net operating income increased 3% quarter-over-quarter to $10.0 million
�
Acquired 340 properties during the third quarter of 2014
�
Stabilized occupancy of 94% on portfolio of 5,926 single-family properties
�
Estimated Portfolio Value of $1.0 billion as of September�30, 2014 on 6,320 single-family properties

During the third quarter, we completed several strategic initiatives, including successfully internalizing management and completing a securitization, that we believe will increase overall shareholder value," said David N. Miller, Silver Bays President and Chief Executive Officer. "As we move forward as a Company, we will continue to focus on growing our portfolio, optimizing our capital structure and enhancing our operational efficiency to grow cash flow."


Recent Transactions

On September 30, 2014, the Company closed the previously announced transaction to internalize the Companys management (the Internalization) after receiving the required stockholder approval for the transaction. The Internalization was completed under the terms of a contribution agreement (the Contribution Agreement) among Silver Bay, Pine River Domestic Management L.P., Provident Real Estate Advisors LLC, PRCM Real Estate Advisers LLC (the Manager), and Silver Bay Operating Partnership L.P., Silver Bays operating partnership (the Operating Partnership), pursuant to which Silver Bay acquired the Manager in exchange for 2,231,511 common units of the Operating Partnership ("OP Units"), with a fair market value of $36.2 million. Silver Bay is now internally-managed, which the Company believes should improve operating cash flows through a reduction in corporate-level expenses, while providing a more simplified corporate structure.


Financial Results

Silver Bay reported total revenue of $20.0 million for the third quarter of 2014, a 4% increase compared to total revenue of $19.2 million for the second quarter of 2014. This sequential quarter increase was primarily attributable to an increase in leased properties generating rental income during the third quarter and to a lesser extent, rental growth. Net loss attributable to common stockholders for the third quarter of 2014 was $44.9 million, or $(1.17) per common share, compared to net loss attributable to common stockholders for the second quarter of 2014 of $5.0 million, or $(0.13) per common share. Included in net loss for the third quarter of 2014 is a one-time cost to internalize the Manager of $39.2 million, primarily related to the issuance of the OP Units and to a lesser extent, certain transaction costs and assumption of certain liabilities.

The Company reported net operating income, or NOI, of $10.0 million for the third quarter of 2014, a 3% increase compared to NOI of $9.7 million for the second quarter of 2014. Funds From Operations ("FFO") for the third quarter of 2014 was $(38.3) million, or $(1.00) per share(1), compared to FFO for the second quarter of 2014 of $1.4 million, or $0.04 per share. Core Funds From Operations ("Core FFO") for the third quarter of 2014 was comparable to Core FFO for the second quarter of 2014 of $3.0 million, or $0.08 per share(1). Included in FFO for the third quarter of 2014 was $39.2 million in one-time expense related to the Internalization, which was added back for Core FFO. NOI, FFO and Core FFO are non-GAAP financial measures. A reconciliation of net loss to NOI, FFO and Core FFO is included in the financial and operating tables accompanying this press release.

(1) Per share means per weighted average common share and common units of the Operating Partnership.

1



Portfolio Summary and Operating Metrics

Silver Bay owned a portfolio of 6,320 single-family properties as of September�30, 2014. The following table provides a summary of Silver Bays portfolio and operating metrics for the third and second quarters of 2014:
PORTFOLIO AND OPERATING SUMMARY
�
�
As of September 30, 2014
�
As of June 30, 2014
Estimated net asset value per share(1)
�
$
19.97

�
$
20.95

Book value per share
�
$
15.57

�
$
16.74

�
�

�
�
�
�
As of September 30, 2014
�
As of June 30, 2014
Occupancy Rate
�

�
�
Stabilized properties
�
94
%
�
95
%
Aggregate portfolio
�
88
%
�
90
%
Average monthly rent on the aggregate portfolio
�
$
1,183

�
$
1,170


(1)
The Company's September 30, 2014 financial results include the Internalization transaction inclusive of�the issuance of 2,231,511 OP Units. The decline in estimated net asset value per share on a sequential quarter basis was primarily due to the issuance of the OP Units and transaction costs related to the Internalization, partially offset by asset appreciation and the impact of share repurchases.

Estimated Net Asset Value

Silver Bay reported an estimated net asset value, or Estimated NAV, per share of $19.97 based on an estimated fair market value, or Estimated Portfolio Value, of the Companys properties of $1.0 billion as of September�30, 2014. The Companys book value per share was $15.57 as of September�30, 2014. The calculation of book value per share and Estimated NAV per share includes 2,231,511 OP Units issued in the Internalization. The decline in estimated net asset value per share on a sequential quarter basis was primarily due to the issuance of the OP Units and transaction costs related to the Internalization, partially offset by asset appreciation and the impact of share repurchases.�The difference between Estimated NAV and book value per share is attributable to multiple factors, including home price appreciation in Silver Bay markets, purchasing at discounts to market prices, value created by the Companys renovations in excess of the cost of the renovations, and the exclusion of accumulated depreciation in the calculation of Estimated Portfolio Value.

The Estimated Portfolio Value of the Companys properties is calculated by Silver Bays proprietary automated valuation model, or AVM, which estimates the value of the Companys properties on an individual basis based on comparable sales in the residential real estate market, without reference to the intended use for the properties. Estimated NAV does not ascribe any value to in-place leases or to the portfolio as a whole (as compared to the sum of the values of the individual properties), nor does it consider cash flow or other yield metrics. Estimated NAV and Estimated Portfolio Value are non-GAAP financial measures. A reconciliation of book value to Estimated NAV is included in the financial and operating tables accompanying this press release.

Operating Metrics

Silver Bay reported an occupancy rate of 94% on stabilized properties as of September�30, 2014, which decreased slightly from 95% in the prior quarter. Silver Bay reported an occupancy rate of 88% for the aggregate portfolio as of September�30, 2014, a decrease of two percentage points compared to an occupancy rate of 90% on the aggregate portfolio as of June 30, 2014. The Company acquired 340 single-family properties in the third quarter of 2014, a 39% increase compared to acquisitions of 244 in the prior quarter. The slight decrease in aggregate occupancy is attributed to the increase in the Company's acquisition pace. A summary of Silver Bays occupancy rates is included in the financial and operating tables accompanying this press release.

Silver Bay reported an average monthly rent for the aggregate portfolio of $1,183 for the third quarter of 2014, compared to an average monthly rent of $1,170 for the second quarter of 2014.


Dividend Declaration

The Companys Board of Directors declared a quarterly dividend of $0.04 per share of common stock for the quarter ended September�30, 2014. The dividend was paid October�3, 2014 to common stockholders of record at the close of business on

2

September�22, 2014.


Financing and Liquidity

On August�12, 2014, the Company completed its previously announced securitization transaction, which involved the issuance and sale in a private offering of single-family rental pass-through certificates that represent beneficial ownership interests in a loan secured by 3,084 single-family properties sold to one of its affiliates from Silver Bays portfolio. In the transaction, the Company sold approximately $312.7 million of certificates with a blended effective interest rate of LIBOR plus 1.92%.

The Company used $235.2 million of the proceeds from the securitization to pay down the full balance of its revolving credit facility during the third quarter of 2014 and simultaneously reduced the size of its revolving credit facility from $350.0 million to $200.0 million.

The Company had $70.3 million in cash and cash equivalents, $20.2 million in escrow deposits and $200.0 million available under its revolving credit facility as of September�30, 2014.


Share Repurchase Plan

During the third quarter of 2014, 743,518 shares were repurchased by the Company under the share repurchase program at an average price of $16.51 per common share, including commissions.


Conference Call
�
Silver Bay will host a conference call on November 6, 2014 at 10:00 a.m. EST to discuss third quarter 2014 financial results and business highlights. To participate in the teleconference, please call toll-free (888) 338-9509 (or (412) 902-4187 for international callers and (855) 669-9657 for Canadian callers) approximately 10 minutes prior to the above start time. You may also listen to the teleconference live via the internet on the Company's website at www.silverbayrealtytrustcorp.com in the Investor Relations section under the Events Calendar link. For those unable to attend, a telephone playback will be available beginning at 1:00 p.m. EST on November 6, 2014 through 9:00 a.m. EST on November 24, 2014. The playback can be accessed by calling (877) 344-7529 (or (412) 317-0088 for international callers and (855) 669-9658 for Canadian callers) and providing Conference Number 10053999. The call will also be archived on the Company's website in the Investor Relations section under the Events Calendar link.


Silver Bay Realty Trust Corp.

Silver Bay Realty Trust Corp. is a Maryland corporation focused on the acquisition, renovation, leasing and management of single-family properties for rental income and long-term capital appreciation. Silver Bay owns single-family properties in Arizona, California, Florida, Georgia, Nevada, North Carolina, Ohio and Texas. Silver Bay has elected to be taxed as a REIT for U.S. federal tax purposes.


Forward-Looking Statements

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. Actual results may 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. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from expected results. Factors that could cause actual results to differ include: adverse economic or real estate developments in Silver Bays markets; defaults on, early terminations of or non-renewal of leases by residents; difficulties in

3

identifying properties to acquire and completing acquisitions; increased time and/or expense to gain possession and renovate properties; increased vacancy, resident turnover, or turnover costs; Silver Bays ability to control or reduce operating expenses, including repairs and maintenance expense and other costs such as real estate taxes, homeowners association fees, insurance and other costs outside the Companys control; Silver Bays failure to successfully operate its properties; Silver Bays ability to obtain financing arrangements; Silver Bays failure to meet the conditions to draw under the credit facility; failure to successfully manage integration of the Manager into the Company; the Companys ability to hire and retain skilled managerial, investment, financial and operational personnel; the Companys ability to perform under the covenants of its revolving credit facility and securitization loan; general volatility of the markets in which it participates; interest rates and the market value of Silver Bays assets; the impact of changes in governmental regulations, tax law and rates, and similar matters.

Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Silver Bay 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 Silver Bays most recent filings with the Securities and Exchange Commission. All subsequent written and oral forward looking statements concerning Silver Bay or matters attributable to Silver Bay or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above.


Non-GAAP Financial Measures

Estimated Portfolio and Estimated Net Asset Value

The Estimated Portfolio Value reflects the value of Silver Bays properties calculated by the Companys proprietary AVM, less the Companys estimate of the remaining cost to renovate such properties, or Estimated Renovation Reserve. The AVM estimates the value of the Companys properties on an individual basis based on prior comparable sales in the residential real estate market, without reference to the intended use for the properties. These individual property values are then aggregated and reduced by the Estimated Renovation Reserve, which accounts for the AVM assumption that renovations for all properties have been completed, to derive the Estimated Portfolio Value of the Companys properties. The difference between the Estimated Portfolio Value and net investments in real estate as of September�30, 2014 is attributable to multiple factors, including home price appreciation in Silver Bay markets, purchasing at discounts to market prices, value created by the Companys renovations in excess of the cost of the renovations, and the exclusion of accumulated depreciation in the calculation of Estimated Portfolio Value.

Estimated NAV is intended to be an estimate of the value of all of the Companys assets net of liabilities. To calculate Estimated NAV, the Company starts with its historical book value, subtracts its historical net investments in real estate and adds its Estimated Portfolio Value. For purposes of calculating Estimated Portfolio Value and Estimated NAV, the Company does not deduct the estimated costs of selling the properties in the portfolio, including commissions and closing costs. Further, the Company ascribes no value to existing leases or to the portfolio as a whole (as compared to the sum of the values of the individual properties), nor does it consider cash flow or other yield metrics.

Estimated Portfolio Value and Estimated NAV are non-GAAP financial measures. Silver Bay provides the Estimated Portfolio Value and Estimated NAV as additional tools for investors seeking to value the Company. These metrics should be considered along with other available information in valuing and assessing Silver Bay, including the Companys GAAP financial measures and other cash flow and yield metrics, and these metrics should not be viewed as a substitute for book value, net investments in real estate, equity, net income or cash flows from operations prepared in accordance with GAAP, or as a measure of the Companys profitability or liquidity.

Net Operating Income

NOI is defined by the Company as total revenue less property operating and maintenance, real estate taxes, homeowners association fees and property management expenses and certain other non-cash or unrelated non-operating expenses. NOI excludes depreciation and amortization, advisory management fees, management internalization, general and administrative expenses, interest expense and other expenses. Additionally, NOI excludes the 5% property management fee because it more closely represents additional advisory management fee, non-cash share based property management stock compensation, expensed acquisition fees and costs, and certain other property management costs.

NOI should not be considered an alternative to net loss or net cash flows from operating activities, as determined in accordance with GAAP, as indications of Silver Bays performance or as measures of liquidity. Although the Company uses this non-

4

GAAP measure for comparability in assessing its performance against other REITs, not all REITs compute the same non-GAAP measure. Accordingly, there can be no assurance that the Companys basis for computing this non-GAAP measure is comparable with that of other REITs.

Funds From Operations and Core Funds From Operations

Funds From Operations, or FFO, is a non-GAAP financial measure that the Company believes, when considered with the financial statements determined in accordance with GAAP, is helpful to investors in understanding its performance because it captures features particular to real estate performance by recognizing that real estate generally appreciates over time or maintains residual value to a much greater extent than do other depreciable assets.�The National Association of Real Estate Investment Trusts, or NAREIT, defines FFO as net income (loss), computed in accordance with GAAP, excluding gains or losses from sales of, and impairment losses recognized with respect to, depreciable property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated on the same basis to determine FFO.

Core Funds From Operations, or Core FFO, is a non-GAAP financial measure that the Company uses as a supplemental measure of its performance. The Company believes that Core FFO is further helpful to investors as it provides a more consistent measurement of its performance across reporting periods by removing the impact of certain items that are not comparable from period to period. The Company adjusts FFO for expensed acquisition fees and costs, certain fees and expenses related to its securitization transaction, total non-cash share based stock compensation, costs associated with the Internalization, non-cash expenses associated with the Company's commitment reduction and pay-down of the revolving credit facility and certain other costs to arrive at Core FFO.

FFO and Core FFO should not be considered alternatives to net income (loss) or net cash flows from operating activities, as determined in accordance with GAAP, as indications of the Company's performance or as measures of liquidity. These non-GAAP measures are not necessarily indicative of cash available to fund future cash needs. In addition, although the Company uses these non-GAAP measures for comparability in assessing its performance against other REITs, not all REITs compute the same non-GAAP measures. Accordingly, there can be no assurance that the Company's basis for computing these non-GAAP measures is comparable with that of other REITs. This is due in part to the differences in capitalization policies used by different companies and the significant effect these capitalization policies have on FFO and Core FFO.�Real estate costs which are accounted for as capital improvements are added to the carrying value of the property and depreciated over time whereas real estate costs that are expenses are accounted for as a current period expense.�This affects FFO and Core FFO because costs that are accounted for as expenses reduce FFO and Core FFO.�Conversely, real estate costs associated with assets that are capitalized and then subsequently depreciated are added back to net income to calculate FFO and Core FFO.

FFO and Core FFO are calculated on a gross basis and, as such, do not reflect adjustments for the noncontrolling interests - Operating Partnership.


Additional Information

Stockholders of Silver Bay, and other interested persons, may find additional information regarding the Company at the SEC's internet site at www.sec.gov or by directing requests to: Silver Bay Realty Trust Corp., Attn: Investor Relations, 3300 Fernbook Lane North, Suite 210, Plymouth, MN 55447, telephone (952) 358-4400.

5



SUPPLEMENTAL FINANCIAL AND OPERATING DATA
THIRD QUARTER 2014

TABLE OF CONTENTS

ITEM
�
Page
CONDENSED CONSOLIDATED BALANCE SHEETS
�
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
�
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
�
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
�
PORTFOLIO SUMMARY OF SINGLE-FAMILY PROPERTIES
�
PORTFOLIO SUMMARY OF LEASING STATUS OF PROPERTIES
�
DEFINITIONS AND RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
�

6


SILVER BAY REALTY TRUST CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS EXCEPT SHARE DATA)


September�30, 2014 (unaudited)
�
December�31, 2013
Assets
�

�
�

Investments in real estate:
�

�
�

Land
$
155,743

�
$
137,349

Building and improvements
723,050

�
638,955

�
878,793

�
776,304

Accumulated depreciation
(36,653
)
�
(18,897
)
Investments in real estate, net
842,140

�
757,407

Assets held for sale
2,472

�
6,382

Cash and cash equivalents
70,314

�
43,717

Escrow deposits
20,167

�
24,461

Resident security deposits
8,125

�
6,848

In-place lease and deferred lease costs, net
666

�
749

Deferred financing costs, net
12,752

�
3,225

Other assets
3,793

�
3,289

Total assets
$
960,429

�
$
846,078

Liabilities and Equity
�

�
�

Liabilities:
�

�
�

Securitization loan, net of unamortized discount of $1,462
$
310,590

�
$


Revolving credit facility


�
164,825

Accounts payable and accrued property expenses
17,411

�
6,072

Resident prepaid rent and security deposits
9,111

�
8,357

Amounts due to the manager and affiliates


�
6,866

Amounts due to previous owners


�
998

Total liabilities
337,112

�
187,118

10% cumulative redeemable preferred stock at liquidation value, $.01 par; 50,000,000 authorized, 1,000 issued and outstanding
1,000

�
1,000

Equity:
�

�
�

Stockholders equity:
�

�
�

Common stock $.01 par; 450,000,000 shares authorized; 37,729,082 and 38,561,468, respectively shares issued and outstanding
376

�
385

Additional paid-in capital
677,081

�
689,646

Accumulated other comprehensive loss
(3
)
�
(276
)
Cumulative deficit
(89,889
)
�
(31,795
)
Total stockholders equity
587,565

�
657,960

Noncontrolling interests - Operating Partnership
34,752

�


Total equity
622,317

�
657,960

Total liabilities and equity
$
960,429

�
$
846,078



7


SILVER BAY REALTY TRUST CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)
(AMOUNTS IN THOUSANDS EXCEPT SHARE DATA)

�
Three Months Ended�
�September 30,
�
2014
�
2013
Revenue:
�

�
�

Rental income
$
19,361

�
$
13,923

Other income
613

�
563

Total revenue
19,974

�
14,486

Expenses:
�

�
�

Property operating and maintenance
4,787

�
4,280

Real estate taxes
2,732

�
1,761

Homeowners association fees
334

�
286

Property management
2,421

�
3,675

Depreciation and amortization
6,427

�
5,683

Advisory management fee - affiliates
2,251

�
2,166

Management internalization
39,179

�


General and administrative
2,331

�
1,866

Interest expense
4,221

�
989

Other
161

�
142

Total expenses
64,844

�
20,848

Net loss
(44,870
)
�
(6,362
)
Net loss attributable to noncontrolling interests - Operating Partnership


�
5

Net loss attributable to controlling interests
(44,870
)
�
(6,357
)
Preferred stock distributions
(25
)
�
(25
)
Net loss attributable to common stockholders
$
(44,895
)
�
$
(6,382
)
Loss per share - basic and diluted:
�

�
�

Net loss attributable to common shares
$
(1.17
)
�
$
(0.16
)
Weighted average common shares outstanding
38,315,231

�
39,095,200

Comprehensive Loss:
�

�
�

Net loss
$
(44,870
)
�
$
(6,362
)
Other comprehensive loss:
�

�
�

Change in fair value of interest rate cap derivatives
15

�
(243
)
Losses reclassified into earnings from other comprehensive loss
481

�


Other comprehensive income (loss)
$
496

�
$
(243
)
Comprehensive loss
(44,374
)
�
(6,605
)
Less comprehensive loss attributable to noncontrolling interests - Operating Partnership


�
5

Comprehensive loss attributable to controlling interests
$
(44,374
)
�
$
(6,600
)


8

SILVER BAY REALTY TRUST CORP.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
(AMOUNTS IN THOUSANDS EXCEPT SHARE DATA)



�
Common�Stock
�
Accumulated�
Other
Comprehensive�Loss
�
�
�
Total Stockholders
Equity
�
Noncontrolling Interests - Operating
Partnership
�
�
�
Shares
�
Par�Value
Amount
�
Additional Paid-In
Capital
�
�
Cumulative
Deficit
�
�
�
Total
Equity
Balance at January 1, 2014
38,561,468

�
$
385

�
$
689,646

�
$
(276
)
�
$
(31,795
)
�
$
657,960

�
$


�
$
657,960

Non-cash equity awards, net
66,873

�


�
716

�


�


�
716

�


�
716

Repurchase of common stock
(899,259
)
�
(9
)
�
(14,702
)
�


�


�
(14,711
)
�


�
(14,711
)
Dividends declared


�


�


�


�
(3,889
)
�
(3,889
)
�


�
(3,889
)
Net loss


�


�


�


�
(54,205
)
�
(54,205
)
�


�
(54,205
)
Issuance of common Operating Partnership units in connection with management internalization


�


�


�


�


�


�
36,173

�
36,173

Other comprehensive loss


�


�


�
(208
)
�


�
(208
)
�


�
(208
)
Losses reclassified into earnings from other comprehensive loss


�


�


�
481

�


�
481

�


�
481

Adjustment to noncontrolling interests - Operating Partnership


�


�
1,421

�


�


�
1,421

�
(1,421
)
�


Balance at September�30, 2014
37,729,082

�
$
376

�
$
677,081

�
$
(3
)
�
$
(89,889
)
�
$
587,565

�
$
34,752

�
$
622,317



9


SILVER BAY REALTY TRUST CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(AMOUNTS IN THOUSANDS)
�
Nine Months Ended�
�September 30,
�
2014
�
2013
Cash Flows From Operating Activities:
�

�
�

Net loss
$
(54,205
)
�
$
(19,490
)
Adjustments to reconcile net loss to net cash provided (used) by operating activities:
�

�
�

Depreciation and amortization
18,800

�
14,061

Non-cash management internalization
36,173

�


Non-cash stock compensation
716

�
746

Losses reclassified into earnings from other comprehensive loss
481

�


Amortization and write-off of deferred financing costs
2,673

�
480

Amortization of discount on securitization loan
41

�


Other
1,065

�
880

Net change in assets and liabilities:
�

�
�

Decrease (increase) in escrow cash for operating activities and debt reserves
5,962

�
(13,927
)
Increase in deferred lease fees and other assets
(1,453
)
�
(924
)
Increase in accounts payable, accrued property expenses, and prepaid rent
6,435

�
3,461

(Decrease) increase in related party payables, net
(7,611
)
�
855

Net cash provided (used) by operating activities
9,077

�
(13,858
)
Cash Flows From Investing Activities:
�

�
�

Purchase of investments in real estate
(79,590
)
�
(257,116
)
Capital improvements of investments in real estate
(24,217
)
�
(84,671
)
(Increase) decrease in escrow cash for investing activities
(1,587
)
�
10,975

Proceeds from sale of real estate
5,406

�
4,195

Cash acquired in management internalization
2,067

�


Other
(218
)
�
(252
)
Net cash used by investing activities
(98,139
)
�
(326,869
)
Cash Flows From Financing Activities:
�

�
�

Proceeds from securitization loan
311,164

�


Payments on securitization loan
(615
)
�


Proceeds from revolving credit facility
70,683

�
144,734

Paydown of revolving credit facility
(235,508
)
�


Deferred financing costs paid
(12,201
)
�
(3,965
)
Purchase of interest rate cap agreements
(393
)
�
(533
)
Repurchase of common stock
(14,711
)
�
(7,790
)
Dividends paid
(2,760
)
�
(843
)
Proceeds from issuance of common stock, net of offering costs


�
34,513

Net cash provided by financing activities
115,659

�
166,116

Net change in cash
26,597

�
(174,611
)
Cash and cash equivalents at beginning of period
43,717

�
228,139

Cash and cash equivalents at end of period
$
70,314

�
$
53,528


10

Supplemental disclosure of cash flow information:
�

�
�

Cash paid for interest
$
6,475

�
$
1,336

Board of directors stock compensation
$


�
$
125

Decrease in fair value of interest rate cap agreements
$
208

�
$


Noncash investing and financing activities:
�
�
�
Common stock and unit dividends declared, but not paid
$
1,514

�
$
387

Advisory management fee - additional basis
$


�
$
1,071

Change in contingent consideration
$


�
$
222

Capital improvements in accounts payable
$
2,352

�
$
2,796

Management internalization transaction:
�
�
�
Issuance of units to noncontrolling interests
$
36,173

�
$


Cash acquired in management internalization
$
2,067

�
$


Other net assets and liabilities acquired in management internalization
$
(2,067
)
�
$




11



SILVER BAY REALTY TRUST CORP.
PORTFOLIO SUMMARY OF SINGLE-FAMILY PROPERTIES
AS OF SEPTEMBER 30, 2014
Market
�
Number of Properties(1)
�
Aggregate Cost Basis (thousands)(2)
�
Average Cost Basis per Property (thousands)
�
Average Age (in years)(3)
�
Average Square Footage
Phoenix
�
1,424

�
$
200,812

�
$
141

�
25.2

�
1,636

Atlanta
�
1,087

�
135,599

�
125

�
17.7

�
1,990

Tampa
�
926

�
132,655

�
143

�
24.4

�
1,656

Dallas
�
386

�
50,029

�
130

�
21.7

�
1,651

Northern CA(4)
�
384

�
72,404

�
189

�
45.4

�
1,401

Jacksonville
�
324

�
41,056

�
127

�
26.7

�
1,528

Southeast FL(5)
�
296

�
56,791

�
192

�
40.8

�
1,565

Las Vegas
�
291

�
41,308

�
142

�
17.7

�
1,717

Orlando
�
290

�
42,480

�
146

�
26.1

�
1,589

Columbus
�
284

�
32,587

�
115

�
36.6

�
1,414

Tucson
�
209

�
17,295

�
83

�
41.0

�
1,330

Southern CA(6)
�
156

�
23,652

�
152

�
44.0

�
1,346

Charlotte
�
145

�
18,794

�
130

�
12.7

�
1,938

Houston
�
118

�
13,331

�
113

�
29.9

�
1,659

�����Totals
�
6,320

�
$
878,793

�
$
139

�
26.6

�
1,659


(1)
Total properties exclude properties held for sale or sold by the Companys taxable REIT subsidiary and any properties acquired in previous periods in sales that have been subsequently rescinded or vacated.

(2)
Aggregate cost includes all capitalized costs, determined in accordance with U.S. generally accepted accounting principles, incurred through September�30, 2014 for the acquisition, stabilization, and significant post-stabilization renovation of properties, including land, building, possession costs and renovation costs.�Aggregate cost includes $6.6 million in capital improvements, incurred from the Company's formation through September�30, 2014, to properties that had been previously renovated, but does not include accumulated depreciation.
�
�(3)
As of September�30, 2014, approximately 14% of the properties in the aggregate portfolio were less than 10 years old, 29% were between 10 and 20 years old, 18% were between 20 and 30 years old, 18% were between 30 and 40 years old, 9% were between 40 and 50 years old and 12% were more than 50 years old. Average age is an annual calculation.
�
(4)
Northern California market currently consists of Contra Costa, Napa and Solano counties.
�
(5)
Southeast Florida market currently consists of Miami-Dade, Broward and Palm Beach counties.

(6)
Southern California market currently consists of Riverside and San Bernardino counties.

12


SILVER BAY REALTY TRUST CORP.
PORTFOLIO SUMMARY OF LEASING STATUS OF PROPERTIES
AS OF SEPTEMBER 30, 2014

Market
�
Number of Properties
�
Number of Stabilized Properties(1)
�
Properties Leased
�
Properties Vacant
�
Aggregate Portfolio Occupancy Rate
�
Stabilized Occupancy Rate
�
Average Monthly Rent(2)
Phoenix
�
1,424

�
1,424

�
1,347

�
77

�
94.6
%
�
94.6
%
�
$
1,050

Atlanta
�
1,087

�
1,035

�
955

�
132

�
87.9
%
�
92.3
%
�
1,165

Tampa
�
926

�
926

�
854

�
72

�
92.2
%
�
92.2
%
�
1,262

Dallas
�
386

�
314

�
296

�
90

�
76.7
%
�
94.3
%
�
1,271

Northern CA
�
384

�
384

�
368

�
16

�
95.8
%
�
95.8
%
�
1,505

Jacksonville
�
324

�
202

�
189

�
135

�
58.3
%
�
93.6
%
�
1,106

Southeast FL
�
296

�
216

�
205

�
91

�
69.3
%
�
94.9
%
�
1,693

Las Vegas
�
291

�
290

�
283

�
8

�
97.3
%
�
97.6
%
�
1,161

Orlando
�
290

�
248

�
244

�
46

�
84.1
%
�
98.4
%
�
1,238

Columbus
�
284

�
283

�
271

�
13

�
95.4
%
�
95.8
%
�
1,030

Tucson
�
209

�
209

�
200

�
9

�
95.7
%
�
95.7
%
�
838

Southern CA
�
156

�
155

�
143

�
13

�
91.7
%
�
92.3
%
�
1,165

Charlotte
�
145

�
137

�
116

�
29

�
80.0
%
�
84.7
%
�
1,190

Houston
�
118

�
103

�
95

�
23

�
80.5
%
�
92.2
%
�
1,188

�����Totals
�
6,320

�
5,926

�
5,566

�
754

�
88.1
%
�
93.9
%
�
$
1,183

(1)
The Company considers a property stabilized at the earlier of (a) its first authorized occupancy or (b) 90 days after the renovations for such property are complete regardless of whether the property is leased. Properties acquired with in-place leases are considered stabilized even though such properties may require future renovation to meet the Company's standards and may have existing residents who would not otherwise meet the Company's resident screening requirements.
(2)
Average monthly rent for leased properties was calculated as the average of the contracted monthly rent for all leased properties as of September�30, 2014 and reflects rent concessions amortized over the life of the related lease.

13


SILVER BAY REALTY TRUST CORP.
DEFINITIONS AND RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
(AMOUNTS IN THOUSANDS EXCEPT SHARE DATA)

Estimated Portfolio and Estimated Net Asset Value

Estimated Portfolio Value and Estimated NAV are non-GAAP financial measures. Silver Bay provides the Estimated Portfolio Value and Estimated NAV and believes such metrics are useful as additional tools for investors seeking to value the Company. These metrics should be considered along with other available information in valuing and assessing Silver Bay, including the Companys GAAP financial measures or other cash flow or yield metrics and should not be viewed as a substitute for book value, net investments in real estate, equity, net income or cash flows from operations prepared in accordance with GAAP, or as a measure of the Companys profitability or liquidity.
�
A description of the Companys AVM along with certain assumptions and limitations related to its AVM and its calculations of Estimated Portfolio Value and Estimated NAV can be found on the Companys website at www.silverbayrealtytrustcorp.com in the Investor Relations section under the non-GAAP Reconciliations link.

The following is a reconciliation of the Companys investments in real estate to Estimated Portfolio Value and book value to Estimated NAV:
(amounts in thousands except share data)
�
September�30, 2014
�
�
Amount
�
Per Share(1)
Investments in real estate, gross
�
$
878,793

�
$
21.99

Accumulated depreciation
�
(36,653
)
�
(0.92
)
Investments in real estate, net
�
842,140

�
21.07

Add: Increase in estimated fair market value of investments in real estate(2)
�
181,506

�
4.54

Less: Estimated Renovation Reserve(3)
�
(5,845
)
�
(0.14
)
Estimated Portfolio Value
�
$
1,017,801

�
$
25.47

�
�
�
�
�
Book value(4)
�
$
622,317

�
$
15.57

Less: Investments in real estate, net
�
(842,140
)
�
(21.07
)
Add: Estimated Portfolio Value
�
1,017,801

�
25.47

Estimated Net Asset Value
�
$
797,978

�
$
19.97


(1)
Per share amounts are based upon common shares outstanding of 37,729,082 plus 2,231,511 common units for a total of 39,960,593 fully diluted shares outstanding as of September�30, 2014.
(2)
Difference between AVM derived value of the Companys portfolio of properties of $1.02 billion which assumes all properties are fully renovated, and net investments in real estate.
(3)
Estimated renovation reserve is calculated on properties in the portfolio that are not currently stabilized and for which the initial renovation has not been completed.
(4)
Book value as defined by U.S. generally accepted accounting principles represents total assets less total liabilities and less preferred stock in mezzanine or total equity.


Net Operating Income

Net operating income, or NOI, is a non-GAAP financial measure defined by the Company as total revenue less property operating and maintenance, real estate taxes, homeowners association fees, property management expenses, and certain other non-cash or unrelated non-operating expenses. NOI excludes depreciation and amortization, advisory management fees, management internalization, general and administrative expenses, interest expense, and other expenses. Additionally, NOI excludes the 5% property management fee because it more closely represents additional advisory management fee, management internalization, non-cash share based property management stock compensation, expensed acquisition fees and costs, and certain other property management costs.


14

The Company considers NOI to be a meaningful financial measure, when considered with the financial statements determined in accordance with U.S. GAAP. The Company believes NOI is helpful to investors in understanding the core performance of the real estate operations of the Company.
�
�
The following is a reconciliation of the Companys NOI to net loss as determined in accordance with GAAP (amounts in thousands):
�
Three Months Ended September 30, 2014
�
Three Months Ended June 30, 2014
Net loss
$
(44,870
)
�
$
(4,970
)
Depreciation and amortization
6,427

�
6,228

Advisory management fee - affiliates
2,251

�
2,169

Management internalization
39,179

�


General and administrative
2,331

�
3,417

Interest expense
4,221

�
2,642

Other
161

�
(49
)
Property operating and maintenance add back:
�
�
�
Market ready costs prior to initial lease
76

�
55

Property management add backs:
�
�
�
5% property management fee
97

�
80

System implementation costs
15

�


Other
85

�
86

Total property management add backs
197

�
166

Net operating income
$
9,973

�
$
9,658

Net operating income as a percentage of total revenue
49.9
%
�
50.4
%


Funds From Operations and Core Funds From Operations

Funds From Operations, or FFO, is a non-GAAP financial measure that the Company believes, when considered with the financial statements determined in accordance with GAAP, is helpful to investors in understanding its performance because it captures features particular to real estate performance by recognizing that real estate generally appreciates over time or maintains residual value to a much greater extent than do other depreciable assets.�The National Association of Real Estate Investment Trusts, or NAREIT, defines FFO as net income (loss), computed in accordance with GAAP, excluding gains or losses from sales of, and impairment losses recognized with respect to, depreciable property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated on the same basis to determine FFO.

Core Funds From Operations, or Core FFO, is a non-GAAP financial measure that the Company uses as a supplemental measure of its performance. The Company believes that Core FFO is further helpful to investors as it provides a more consistent measurement of its performance across reporting periods by removing the impact of certain items that are not comparable from period to period. The Company adjusts FFO for expensed acquisition fees and costs, certain fees and expenses related to its securitization transaction, total non-cash share based stock compensation, costs associated with the Internalization, non-cash expenses associated with the Company's commitment reduction and pay-down of the revolving credit facility, and certain other costs to arrive at Core FFO.

FFO and Core FFO should not be considered alternatives to net income (loss) or net cash flows from operating activities, as determined in accordance with GAAP, as indications of the Company's performance or as measures of liquidity. These non-GAAP measures are not necessarily indicative of cash available to fund future cash needs. In addition, although the Company uses these non-GAAP measures for comparability in assessing its performance against other REITs, not all REITs compute the same non-GAAP measures. Accordingly, there can be no assurance that the Company's basis for computing these non-GAAP measures is comparable with that of other REITs. This is due in part to the differences in capitalization policies used by different companies and the significant effect these capitalization policies have on FFO and Core FFO.�Real estate costs which are accounted for as capital improvements are added to the carrying value of the

15

property and depreciated over time whereas real estate costs that are expenses are accounted for as a current period expense.�This affects FFO and Core FFO because costs that are accounted for as expenses reduce FFO and Core FFO.�Conversely, real estate costs associated with assets that are capitalized and then subsequently depreciated are added back to net income to calculate FFO and Core FFO.

FFO and Core FFO are calculated on a gross basis and, as such, do not reflect adjustments for the noncontrolling interests - Operating Partnership.

The following table sets forth a reconciliation of the Companys net loss as determined in accordance with GAAP and its calculations of FFO and Core FFO for the three months ended September�30, 2014 and June�30, 2014. Also presented is information regarding the weighted-average number of shares of the Company's common stock and common units of the Operating Partnership outstanding used for the computation of FFO and Core FFO per share (amounts in thousands, except share and per-share amounts):

�
Three Months Ended September 30, 2014
�
Three Months Ended June 30, 2014
Net loss(1)
$
(44,870
)
�
$
(4,970
)
Depreciation and amortization
6,427

�
6,228

Other
113

�
152

Funds from operations
(38,330
)
�
1,410

�
�
�
�
Adjustments:
�
�
�
Acquisition fees and costs expensed and other(2)
$


�
$
775

Securitization fees and costs expensed(3)
217

�
474

Non-cash stock compensation
259

�
259

Market ready costs prior to initial lease
76

�
55

System implementation costs
15

�


�Management internalization(1)
39,179

�


Write-off of deferred financing fees
1,058

�


Ineffectiveness of interest rate cap agreements
480

�


Amortization of discount on securitization loan
41

�


Core funds from operations
$
2,995

�
$
2,973

�
�
�
�
FFO
$
(38,330
)
�
$
1,410

Preferred stock distributions
(25
)
�
(25
)
FFO available to common shares and units
$
(38,355
)
�
$
1,385

�
�
�
�
Core FFO
$
2,995

�
$
2,973

Preferred stock distributions
(25
)
�
(25
)
Core FFO available to common shares and units
$
2,970

�
$
2,948

�
�
�
�
Weighted average common shares and units outstanding(4)
38,339,487

�
38,465,803

FFO per share
$
(1.00
)
�
$
0.04

Core FFO per share
$
0.08

�
$
0.08


(1)
Includes cost to internalize the Manager of $39.2 million, primarily related to issuance of the common units of the Operating Partnership and to a lesser extent, certain transaction costs and assumption of certain liabilities during the three months ended September 30, 2014.
(2)
Includes a one-time expense of $775 in the three months ended June 30, 2014 to acquire the Company's third-party property manager in the Company's Tampa market.
(3)
Represents non-capitalizable costs related to the Company's securitization transaction for personnel and other matters.
(4)
Represents the weighted average of common shares and common units in the Operating Partnership outstanding for the periods presented.

16
SILVER BAY REALTY TRUST CORP. T h i r d Q u a r t e r 2 0 1 4 E a r n i n g s P r e s e n t a t i o n

�
2 S A F E H A R B O R S T A T E M E N T F O R W A R D - L O O K I N G S T A T E M E N T S This presentation includes forward-looking statements within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Actual results may 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. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from expected results. Factors that could cause actual results to differ include: adverse economic or real estate developments in Silver Bays markets; defaults on, early terminations of or non-renewal of leases by residents; difficulties in identifying properties to acquire and completing acquisitions; increased time and/or expense to gain possession and renovate properties; increased vacancy, resident turnover, or turnover costs; Silver Bays ability to control or reduce operating expenses, including repairs and maintenance expense and other costs such as real estate taxes, homeowners association fees, insurance and other costs outside the Companys control; Silver Bays failure to successfully operate its properties; Silver Bays ability to obtain financing arrangements; Silver Bays failure to meet the conditions to draw under the credit facility; failure to successfully manage integration of the Manager into the Company; the Companys ability to hire and retain skilled managerial, investment, financial and operational personnel; the Companys ability to perform under the covenants of its revolving credit facility and securitization transaction; general volatility of the markets in which it participates; interest rates and the market value of Silver Bays assets; the impact of changes in governmental regulations, tax law and rates, and similar matters. Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Silver Bay 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 Silver Bays most recent filings with the Securities and Exchange Commission. All subsequent written and oral forward looking statements concerning Silver Bay or matters attributable to Silver Bay or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above.

�
3 THIRD QUARTER 2014 HIGHLIGHTS � On September 30th, Silver Bay completed the internalization of its advisory manager  Acquired the advisory manager in exchange for approximately 2.2 million common units of the Companys Operating Partnership � Completed an approximately $313 million securitization transaction with a blended effective interest rate of LIBOR plus 192 basis points � Reported total revenue of $20.0 million, net operating income(2) of $10.0 million, and Core FFO(2) of $3.0 million, or 8-cents per share � Portfolio of approximately 6,500 high-quality single- family rental homes as of October 31, 2014 � Estimated portfolio value exceeding $1 billion as of September 30, 2014 � Acquired 340 properties in the third quarter (1) Estimated NAV is a non-GAAP financial measure and per share amounts are based upon common shares outstanding plus common units as of September 30, 2014. See the non-GAAP reconciliation included in the appendix. (2) NOI and Core FFO are non-GAAP financial measures. Core FFO per share amounts are based upon weighted average common shares and common units of the Operating Partnership for the respective periods. See the non-GAAP reconciliation included in the appendix. AS OF SEPTEMBER 30, 2014 ESTIMATED NAV(1) $19.97 PER SHARE 92% 94% 95% 93% 95% 95% 94% 0% 20% 40% 60% 80% 100% Q1 - 2013 Q2 - 2013 Q3 - 2013 Q4 - 2013 Q1 - 2014 Q2 - 2014 Q3 - 2014 S T A B I L I Z E D O C C U P A N C Y

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4 P O R T F O L I O O V E R V I E W A N D H PA P R O P E R T I E S B Y S T A T E A S O F S E P T E M B E R 3 0 , 2 0 1 4 (1) Other category consists of properties within the following states: Nevada, Ohio and North Carolina. (2) MSA means Metropolitan Statistical Areas, which is generally defined as one or more adjacent counties or county equivalents that have at least one urban core area of at least a 50,000-person population, plus adjacent territory that has a high degree of social and economic integration with the core as measured by commuting ties. Peak refers to highest historical home prices in a particular market prior to the start of the housing recovery. Trough refers to lowest home prices in a particular market since the peak. MSA used for Northern California is Fairfield-Vallejo, which most closely approximates the geographic area in which we purchase homes in Northern California. This MSA is comprised of Solano County and the most populous cities in the MSA are Vallejo, Fairfield, Vacaville, Suisun and Benicia. MSA used for Southern California is Riverside-San Bernardino-Ontario. This MSA is comprised of Riverside and San Bernardino Counties and the most populous cities in the MSA are Riverside, San Bernardino, Fontana and Moreno. MSA used for Southeast FL is Fort Lauderdale-Pompano Beach-Deerfield Beach, FL. FL 29% AZ 26% GA 17% CA 9% TX 8% [CATEGO RY NAME](1) [PERCEN TAGE] M S A H O M E P R I C E A P P R E C I A T I O N (  H P A  )(2) S o u r c e : C o r e L o g i c a s o f A u g u s t 2 0 1 4 MARKET HPA (Peak to Trough)(2) HPA (Peak to Current) HPA (Prior 12 months) HPA (Prior 3 months) Phoenix, AZ -53% -30% 4% 1% Tucson, AZ -43% -30% 4% 2% Northern CA(2) -60% -36% 15% 3% Southern CA(2) -53% -31% 11% 1% Jacksonville, FL -41% -28% 4% 2% Orlando, FL -55% -36% 6% 2% Southeast FL(2) -53% -35% 8% 2% Tampa, FL -48% -33% 5% 3% Atlanta, GA -33% -7% 9% 3% Charlotte, NC -17% 5% 5% 1% Las Vegas, NV -60% -38% 9% 2% Columbus, OH -18% 0% 9% 4% Dallas, TX -14% 10% 9% 3% Houston, TX -13% 15% 11% 2% NATIONAL -32% -12% 6% 2%

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5 $7.7 $10.7 $14.5 $16.7 $18.1 $19.2 $20.0 Q1 - 2013 Q2 - 2013 Q3 - 2013 Q4 - 2013 Q1 - 2014 Q2 - 2014 Q3 - 2014 TOTAL REVENUE ($ IN MILLIONS) Q3 - 2014 OPERATIONAL AND FINANCIAL SUMMARY � Total revenue increased 4% quarter-over-quarter to $20.0 million � NOI(1) increased 3% quarter-over-quarter to $10.0 million � Generated Core FFO(1) of $0.08 per share � Stabilized occupancy of 94% on portfolio of 5,926 single-family properties � Aggregate occupancy of 88% on portfolio of 6,320 single-family properties, which declined slightly from the prior quarter due to increased acquisitions of 340 properties in the third quarter of 2014 � NAV(2) of $19.97 per share as of September 30th  Sequential quarter change primarily due to the issuance of the common units and transaction costs related to the advisory management internalization, partially offset by asset appreciation and the impact of share buy backs $2.2 $3.7 $5.6 $8.3 $9.2 $9.7 $10.0 Q1 - 2013 Q2 - 2013 Q3 - 2013 Q4 - 2013 Q1 - 2014 Q2 - 2014 Q3 - 2014 NET OPERATING INCOME(1) ($ IN MILLIONS) (1) NOI and Core FFO are non-GAAP financial measures. Core FFO per share amounts are based upon weighted average common shares and common units of the Operating Partnership for the respective periods. See the non-GAAP reconciliation included in the appendix. (2) Estimated NAV is a non-GAAP financial measure and per share amounts are based upon common shares outstanding plus common units as of September 30, 2014. See the non-GAAP reconciliation included in the appendix.

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6 A P P E N D I X

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7 ESTIMATED PORTFOLIO AND ESTIMATED NET ASSET VALUE Estimated Portfolio Value and Estimated NAV are non-GAAP financial measures. Silver Bay provides the Estimated Portfolio Value and Estimated NAV and believes such metrics are useful as additional tools for investors seeking to value the Company. These metrics should be considered along with other available information in valuing and assessing Silver Bay, including the Companys GAAP financial measures or other cash flow or yield metrics and should not be viewed as a substitute for book value, net investments in real estate, equity, net income or cash flows from operations prepared in accordance with GAAP, or as a measure of the Companys profitability or liquidity. A description of the Companys AVM along with certain assumptions and limitations related to its AVM and its calculations of Estimated Portfolio Value and Estimated NAV can be found on the Companys website at www.silverbayrealtytrustcorp.com in the Investor Relations section under the non-GAAP Reconciliations link. The following is a reconciliation of the Companys investments in real estate to Estimate Portfolio Value and book value to Estimated NAV: (1) Per share amounts are based upon common shares outstanding of 37,729,082 plus 2,231,511 common units for a total of 39,960,593 fully diluted shares outstanding as of September 30, 2014. (2) Difference between AVM derived value of the Companys portfolio of properties of $1.02 billion which assumes all properties are fully renovated, and net investments in real estate. (3) Estimated renovation reserve is calculated on properties in the portfolio that are not currently stabilized and for which the initial renovation has not been completed. (4) Book value as defined by U.S. generally accepted accounting principles represents total assets less total liabilities and less preferred stock in mezzanine or total equity. (AMOUNTS IN THOUSANDS OTHER THAN SHARE DATA) SEPTEMBER 30, 2014 AMOUNT PER SHARE(1) Investments in real estate, gross $ 878,793 $ 21.99 Accumulated depreciation (36,653) (0.92) Investments in real estate, net 842,140 21.07 Add: Increase in estimated fair market value of investments in real estate(2) 181,506 4.54 Less: Estimated Renovation Reserve(3) (5,845) (0.14) Estimated Portfolio Value $ 1,017,801 $ 25.47 Book value(4) $ 622,317 $ 15.57 Less: Investments in real estate, net (842,140) (21.07) Add: Estimated Portfolio Value 1,017,801 25.47 Estimated Net Asset Value $ 797,978 $ 19.97

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8 N E T O P E R A T I N G I N C O M E Net operating income, or NOI, is a non-GAAP financial measure defined by the Company as total revenue less property operating and maintenance, real estate taxes, homeowners association fees, property management expenses, and certain other non-cash or unrelated non-operating expenses. NOI excludes depreciation and amortization, advisory management fees, management internalization, general and administrative expenses, interest expense, and other expenses. Additionally, NOI excludes the 5% property management fee because it more closely represents additional advisory management fee, non-cash share based property management stock compensation, expensed acquisition fees and costs, and certain other property management costs. The Company considers NOI to be a meaningful financial measure, when considered with the financial statements determined in accordance with U.S. GAAP. The Company believes NOI is helpful to investors in understanding the core performance of the real estate operations of the Company. The following is a reconciliation of the Companys NOI to net loss as determined in accordance with GAAP (amounts in thousands): (AMOUNTS IN THOUSANDS) THREE MONTHS ENDED SEPTEMBER 30, 2014 THREE MONTHS ENDED JUNE 30, 2014 Net loss $ (44,870) $ (4,970) Depreciation and amortization 6,427 6,228 Advisory management fee - affiliates 2,251 2,169 Management internalization 39,179 - General and administrative 2,331 3,417 Interest expense 4,221 2,642 Other 161 (49) Property operating and maintenance add back: Market ready costs prior to initial lease 76 55 Property management add backs: 5% property management fee 97 80 System implementation costs 15 - Other 85 86 Total property management add backs 197 166 Net operating income $ 9,973 $ 9,658 Net operating income as a percentage of total revenue 49.9% 50.4%

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9 FUNDS FROM OPERATIONS AND CORE FUNDS FROM OPERATIONS Funds From Operations, or FFO, is a non-GAAP financial measure that the Company believes, when considered with the financial statements determined in accordance with GAAP, is helpful to investors in understanding its performance because it captures features particular to real estate performance by recognizing that real estate generally appreciates over time or maintains residual value to a much greater extent than do other depreciable assets. The National Association of Real Estate Investment Trusts, or NAREIT, defines FFO as net income (loss), computed in accordance with GAAP, excluding gains or losses from sales of, and impairment losses recognized with respect to, depreciable property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated on the same basis to determine FFO. Core Funds From Operations, or Core FFO, is a non-GAAP financial measure that the Company uses as a supplemental measure of its performance. The Company believes that Core FFO is further helpful to investors as it provides a more consistent measurement of its performance across reporting periods by removing the impact of certain items that are not comparable from period to period. The Company adjusts FFO for expensed acquisition fees and costs, certain fees and expenses related to its securitization transaction, total non-cash share based stock compensation, costs associated with the Internalization, non-cash expenses associated with the Company's commitment reduction and pay-down of the revolving credit facility, and certain other costs to arrive at Core FFO. FFO and Core FFO should not be considered alternatives to net income (loss) or net cash flows from operating activities, as determined in accordance with GAAP, as indications of the Company's performance or as measures of liquidity. These non-GAAP measures are not necessarily indicative of cash available to fund future cash needs. In addition, although the Company uses these non-GAAP measures for comparability in assessing its performance against other REITs, not all REITs compute the same non-GAAP measures. Accordingly, there can be no assurance that the Company's basis for computing these non-GAAP measures is comparable with that of other REITs. This is due in part to the differences in capitalization policies used by different companies and the significant effect these capitalization policies have on FFO and Core FFO. Real estate costs which are accounted for as capital improvements are added to the carrying value of the property and depreciated over time whereas real estate costs that are expenses are accounted for as a current period expense. This affects FFO and Core FFO because costs that are accounted for as expenses reduce FFO and Core FFO. Conversely, real estate costs associated with assets that are capitalized and then subsequently depreciated are added back to net income to calculate FFO and Core FFO. FFO and Core FFO are calculated on a gross basis and, as such, do not reflect adjustments for the noncontrolling interests - Operating Partnership. The following table sets forth a reconciliation of the Companys net loss as determined in accordance with GAAP and its calculations of FFO and Core FFO for the three months ended September 30, 2014 and June 30, 2014. Also presented is information regarding the weighted-average number of shares of the Company's common stock and common units of the Operating Partnership outstanding used for the computation of FFO and Core FFO per share (amounts in thousands, except share and per-share amounts): THREE MONTHS ENDED SEPTEMBER 30, 2014 THREE MONTHS ENDED JUNE 30, 2014 Net loss(1) $ (44,870) $ (4,970) Depreciation and amortization 6,427 6,228 Other 113 152 Funds from operations (38,330) 1,410 Adjustments: Acquisition fees and costs expensed and other(2) $ - $ 775 Securitization fees and costs expenses(3) 217 474 Non-cash stock compensation 259 259 Market ready costs to initial lease 76 55 System implementation costs 15 - Management internalization(1) 39,179 - Write-off of deferred financing fees 1,058 - Ineffectiveness of interest rate cap agreements 480 - Amortization of discount on securitization loan 41 - Core funds from operations $ 2,995 $ 2,973 FFO $ (38,330) $ 1,410 Preferred stock distributions (25) (25) FFO available to common shares and units $ (38,355) $ 1,385 Core FFO $ 2,995 $ 2,973 Preferred stock distributions (25) (25) Core FFO available to common shares and units $ 2,970 $ 2,948 Weighted average shares and units outstanding(4) 38,339,487 38,465,803 FFO per share $ (1.00) $ 0.04 Core FFO per share $ 0.08 $ 0.08 (1) Includes cost to internalize the Manager of $39.2 million, primarily related to issuance of the common units of the Operating Partnership and to a lesser extent, certain transaction costs and assumption of certain liabilities during the three months ended September 30, 2014. (2) Includes a one-time expense of $775 in the three months ended June 30, 2014 to acquire the Company's third-party property manager in the Company's Tampa market. (3) Represents non-capitalizable costs related to the Company's securitization transaction for personnel and other matters. (4) Represents the weighted average of common shares and common units in the Operating Partnership outstanding for the periods presented.

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10 3300 FERNBROOK LANE NORTH| SUITE 210 | PLYMOUTH | MN | 55477 P: 952.358.4400 | E: INVES TO RS@ SILVERBAYMGMT .C OM

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