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Altisource Asset Management Corporation Reports Third Quarter 2014 Results

FREDERIKSTED, U.S. Virgin Islands, Nov. 4, 2014 (GLOBE NEWSWIRE) -- Altisource Asset Management Corporation ("AAMC" or the "Company") (NYSE MKT:AAMC) announced today financial and operating results for the third quarter of 2014. Net income attributable to stockholders for the third quarter of 2014 totaled $17.7 million, or $6.25 per diluted share, compared to a net loss attributable to stockholders of $2.6 million, or $1.09 per share, for the third quarter of 2013.

Net income attributable to stockholders for the nine months ended September 30, 2014 totaled $37.8 million, or $13.23 per diluted share, compared to a net loss attributable to stockholders of $4.9 million, or $2.09 per diluted share, for the nine months ended September 30, 2013.

Third quarter 2014 highlights:

  • Generated management incentive fees of $19.5 million as a result of the $0.55 per share quarterly dividend declared and paid by Altisource Residential Corporation ("Residential") to its shareholders.
  • Facilitated Residential's first non-performing loan securitization transaction, with gross proceeds to Residential of approximately $150.0 million.
  • Managed Residential's resolution of 1,510 loans, up 31% from the 1,156 loans it resolved in the second quarter of 2014.
  • Repurchased 54,465 shares of AAMC's common stock, bringing the total shares purchased under our stock buy-back plan to 244,498 shares, or $231.9 million.

Chief Executive Officer Ashish Pandey stated, "We are pleased with our continued success in facilitating Residential's increase in loan resolutions and growth of taxable income."

"We are proud of the attractive returns that Residential has been able to generate under AAMC's management," said Chairman William Erbey.

Webcast and conference call

The Company will host a webcast and conference call on Tuesday, November 4, 2014, at 11:30 a.m. Eastern Time to discuss its financial results for the third quarter of 2014. The conference call will be webcast live over the internet from the Company's website at www.altisourceamc.com and can be accessed by clicking on the "Shareholders" link.

About AAMC

AAMC is an asset management company that provides portfolio management and corporate governance services to investment vehicles. Additional information is available at www.altisourceamc.com.

Forward-looking statements

This press release contains forward-looking statements that involve a number of risks and uncertainties. Those forward-looking statements include all statements that are not historical fact, including statements about management's beliefs and expectations. Forward-looking statements are based on management's beliefs as well as assumptions made by and information currently available to management. Because such statements are based on expectations as to future economic performance and are not statements of historical fact, actual results may differ materially from those projected. AAMC undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise. The risks and uncertainties to which forward-looking statements are subject include, but are not limited to: AAMC's ability to implement its business plan; AAMC's ability to leverage strategic relationships on an efficient and cost-effective basis; its ability to compete; general economic and market conditions; governmental regulations, taxes and policies; availability of adequate and timely sources of liquidity and financing; and other risks and uncertainties detailed in the "Forward-Looking Statements," "Risk Factors" and other sections of AAMC's Registration Statement on Form 10, its Annual Report on Form 10-K, its quarterly reports on Form 10-Q and its other filings with the Securities and Exchange Commission.

Altisource Asset Management Corporation
Consolidated Statements of Operations
(In thousands, except share and per share amounts)
(Unaudited)
Three months ended September 30, 2014 Three months ended September 30, 2013 Nine months ended September 30, 2014 Nine months ended September 30, 2013
Revenues:
Rental revenues $ 469 $ 6 $ 719 $ 6
Net unrealized gain on mortgage loans 88,726 17,670 258,898 25,963
Net realized gain on mortgage loans 13,727 1,909 33,867 4,015
Net realized gain on re-performing mortgage loans 302 302
Net realized gain on real estate 3,310 4,544
Interest income 2,568 156 2,757 368
Total revenues 109,102 19,741 301,087 30,352
Expenses:
Residential property operating expenses 9,247 191 13,550 275
Real estate depreciation and amortization 313 4 464 4
Real estate selling costs and impairment 5,542 210 8,775 210
Mortgage loan servicing costs 21,226 2,154 49,588 3,788
Interest expense 11,699 467 24,352 1,163
General and administrative 5,435 4,895 15,578 10,798
Related party general and administrative 999 681 4,597 1,052
Total expenses 54,461 8,602 116,904 17,290
Other income (expense) 1,586 13 2,372 (6)
Income before income taxes 56,227 11,152 186,555 13,056
Income tax expense 853 1,428
Net income 55,374 11,152 185,127 13,056
Net income attributable to noncontrolling interest in consolidated affiliate (37,676) (13,709) (147,371) (17,952)
Net income (loss) attributable to common stockholders $ 17,698 $ (2,557) $ 37,756 $ (4,896)
Earnings (loss) per share of common stock – basic:
Earnings (loss) per basic share $ 7.91 $ (1.09) $ 16.51 $ (2.09)
Weighted average common stock outstanding – basic 2,238,225 2,348,040 2,286,451 2,344,923
Earnings (loss) per share of common stock – diluted:
Earnings (loss) per diluted share $ 6.25 $ (1.09) $ 13.23 $ (2.09)
Weighted average common stock outstanding – diluted 2,831,617 2,348,040 2,853,751 2,344,923
Altisource Asset Management Corporation
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
(Unaudited)
September 30, 2014 December 31, 2013
Assets:
Real estate held for use:
Land (from consolidated VIE) $ 9,865 $ 478
Rental residential properties (net of accumulated depreciation of $484 and $24, respectively - from consolidated VIE) 38,470 3,092
Real estate owned (from consolidated VIE) 370,733 32,332
Total real estate held for use, net 419,068 35,902
Real estate assets held for sale (from consolidated VIE) 40,985 1,186
Mortgage loans (from consolidated VIE) 2,071,505 1,207,163
Mortgage loans held for sale (from consolidated VIE) 143,197
Cash and cash equivalents (including from consolidated VIE $76,027 and $115,988, respectively) 91,824 140,000
Restricted cash 12,033 5,878
Accounts receivable (including from consolidated VIE $871 and $1,428, respectively) 1,493 1,428
Related party receivables (from consolidated VIE) 19,254 9,260
Deferred leasing and financing costs, net (from consolidated VIE) 3,688 2,293
Prepaid expenses and other assets (including from consolidated VIE $5,304 and $1,542, respectively) 6,847 1,994
Total assets $ 2,809,894 $ 1,405,104
Liabilities:
Repurchase agreements (from consolidated VIE) $ 1,258,329 $ 602,382
Other secured borrowings 150,000
Accounts payable and accrued liabilities (including from consolidated VIE $14,577 and $4,952, respectively) 16,146 6,872
Related party payables (including from consolidated VIE $6,489 and $1,409, respectively) 6,907 2,883
Total liabilities 1,431,382 612,137
Commitments and contingencies
Redeemable preferred stock:
Preferred stock, $0.01 par value, 250,000 shares issued and outstanding as of September 30, 2014 and none issued or outstanding as of December 31, 2013; redemption value $250,000 248,875
Equity:
Common stock, $.01 par value, 5,000,000 authorized shares; 2,450,840 and 2,200,330 shares issued and outstanding, respectively as of September 30, 2014 and 2,354,774 shares issued and outstanding as of December 31, 2013 25 24
Additional paid-in capital 17,246 12,855
Retained earnings (accumulated deficit) 32,303 (5,339)
Treasury stock, at cost, 250,510 shares as of September 30, 2014 and none as of December 31, 2013 (236,751)
Total stockholders' equity (187,177) 7,540
Noncontrolling interest in consolidated affiliate 1,316,814 785,427
Total equity 1,129,637 792,967
Total liabilities and equity $ 2,809,894 $ 1,405,104

The following tables set forth consolidating financial information which should be considered in addition to, and not as a substitute for, our consolidated financial statements presented in accordance with U.S. GAAP:

Altisource Asset Management Corporation
Consolidating Statement of Operations
Three months ended September 30, 2014
(In thousands, unaudited)
Residential
(GAAP)
NewSource
Stand-alone
(Non-GAAP)
AAMC
Stand-alone
(Non-GAAP)
Consolidating
Entries
AAMC
Consolidated
(GAAP)
Revenues:
Rental revenues $ 469 $ — $ — $ — $ 469
Net unrealized gain on mortgage loans 88,726 88,726
Net realized gain on mortgage loans 13,727 13,727
Net realized gain on re-performing mortgage loans 302 302
Net realized gain on real estate 3,310 3,310
Interest income 2,568 2,568
Incentive management fee 19,503 (19,503)
Expense reimbursements 1,801 (1,801)
Total revenues 109,102 21,304 (21,304) 109,102
Expenses:
Residential property operating expenses 9,247 9,247
Real estate depreciation and amortization 313 313
Real estate selling costs and impairment 5,542 5,542
Mortgage loan servicing costs 21,226 21,226
Interest expense 11,699 11,699
General and administrative 1,819 286 3,330 5,435
Related party general and administrative 21,530 210 563 (21,304) 999
Total expenses 71,376 496 3,893 (21,304) 54,461
Other income 1,586 1,586
Income before income taxes 37,726 1,090 17,411 56,227
Income tax expense 50 803 853
Net income 37,676 1,090 16,608 55,374
Net income attributable to noncontrolling interest in consolidated affiliate (37,676) (37,676)
Net income attributable to common stockholders $ 37,676 $ 1,090 $ 16,608 $ (37,676) $ 17,698
Altisource Asset Management Corporation
Consolidating Statement of Operations
Nine months ended September 30, 2014
(In thousands, unaudited)
Residential
(GAAP)
NewSource
Stand-alone
(Non-GAAP)
AAMC
Stand-alone
(Non-GAAP)
Consolidating
Entries
AAMC
Consolidated
(GAAP)
Revenues:
Rental revenues $ 719 $ — $ — $ — $ 719
Net unrealized gain on mortgage loans 258,898 258,898
Net realized gain on mortgage loans 33,867 33,867
Net realized gain on re-performing mortgage loans 302 302
Net realized gain on real estate 4,544 4,544
Interest income 2,757 2,757
Incentive management fee 44,129 (44,129)
Expense reimbursements 5,580 (5,580)
Total revenues 301,087 49,709 (49,709) 301,087
Expenses:
Residential property operating expenses 13,550 13,550
Real estate depreciation and amortization 464 464
Real estate selling costs and impairment 8,775 8,775
Mortgage loan servicing costs 49,588 49,588
Interest expense 24,352 24,352
General and administrative 5,665 381 9,532 15,578
Related party general and administrative 51,629 731 1,946 (49,709) 4,597
Total expenses 154,023 1,112 11,478 (49,709) 116,904
Other income 383 1,985 4 2,372
Income (loss) before income taxes 147,447 873 38,235 186,555
Income tax expense 76 1,352 1,428
Net income (loss) 147,371 873 36,883 185,127
Net income attributable to noncontrolling interest in consolidated affiliate (147,371) (147,371)
Net income (loss) attributable to common stockholders $ 147,371 $ 873 $ 36,883 $ (147,371) $ 37,756
Altisource Asset Management Corporation
Consolidating Statement of Operations
Three months ended September 30, 2013
(In thousands, unaudited)
Residential
(GAAP)
AAMC
Stand-alone
(Non-GAAP)
Consolidating
Entries
AAMC
Consolidated
(GAAP)
Revenues:
Rental revenues $ 6 $ — $ — $ 6
Net unrealized gain on mortgage loans 17,670 17,670
Net realized gain on mortgage loans 1,909 1,909
Interest income 156 156
Incentive management fee 51 (51)
Expense reimbursements 1,307 (1,307)
Total revenues 19,741 1,358 (1,358) 19,741
Expenses:
Residential property operating expenses 191 191
Real estate depreciation and amortization 4 4
Real estate selling costs and impairment 210 210
Mortgage loan servicing costs 2,154 2,154
Interest expense 467 467
General and administrative 980 3,915 4,895
Related party general and administrative 2,039 (1,358) 681
Total expenses 6,045 3,915 (1,358) 8,602
Other income 13 13
Net income (loss) 13,709 (2,557) 11,152
Net income attributable to noncontrolling interest in consolidated affiliate (13,709) (13,709)
Net income (loss) attributable to common stockholders $ 13,709 $ (2,557) $ (13,709) $ (2,557)
Altisource Asset Management Corporation
Consolidating Statement of Operations
Nine months ended September 30, 2013
(In thousands, unaudited)
Residential
(GAAP)
AAMC
Stand-alone
(Non-GAAP)
Consolidating
Entries
AAMC
Consolidated
(GAAP)
Revenues:
Rental revenues $ 6 $ — $ — $ 6
Net unrealized gain on mortgage loans 25,963 25,963
Net realized gain on mortgage loans 4,015 4,015
Interest income 368 368
Incentive management fee 51 (51)
Expense reimbursements 3,371 (3,371)
Total revenues 30,352 3,422 (3,422) 30,352
Expenses:
Residential property operating expenses 275 275
Real estate depreciation and amortization 4 4
Real estate selling costs and impairment 210 210
Mortgage loan servicing costs 3,788 3,788
Interest expense 1,163 1,163
General and administrative 2,480 8,318 10,798
Related party general and administrative 4,474 (3,422) 1,052
Total expenses 12,394 8,318 (3,422) 17,290
Other expense (6) (6)
Net income (loss) 17,952 (4,896) 13,056
Net income attributable to noncontrolling interest in consolidated affiliate (17,952) (17,952)
Net income (loss) attributable to common stockholders $ 17,952 $ (4,896) $ (17,952) $ (4,896)
Altisource Asset Management Corporation
Consolidating Balance Sheet
September 30, 2014
(In thousands, unaudited)
Residential
(GAAP)
NewSource
stand-alone
(Non-GAAP)
AAMC
Stand-alone

(Non-GAAP)
Consolidating
Entries
AAMC
Consolidated
(GAAP)
Assets:
Real estate held for use:
Land $ 9,865 $ — $ — $ — $ 9,865
Rental residential properties, net 38,470 38,470
Real estate owned 370,733 370,733
Total real estate held for use, net 419,068 419,068
Real estate assets held for sale 40,985 40,985
Mortgage loans 2,071,505 2,071,505
Mortgage loans held for sale 143,197 143,197
Cash and cash equivalents 76,027 5,899 9,898 91,824
Restricted cash 12,033 12,033
Accounts receivable 874 612 7 1,493
Related party receivables 19,254 15,000 49,338 (64,338) 19,254
Investment in affiliate 18,000 2,000 (20,000)
Deferred leasing and financing costs, net 3,688 3,688
Prepaid expenses and other assets 5,305 36 1,506 6,847
Total assets $ 2,809,936 $ 21,547 $ 62,749 $ (84,338) $ 2,809,894
Liabilities:
Repurchase agreements $ 1,258,329 $ — $ — $ — $ 1,258,329
Other secured borrowings 165,000 (15,000) 150,000
Accounts payable and accrued liabilities 14,577 21 1,548 16,146
Related party payables 55,216 731 298 (49,338) 6,907
Total liabilities 1,493,122 752 1,846 (64,338) 1,431,382
Commitments and contingencies
Preferred stock 248,875 248,875
Equity:
Common stock 572 25 (572) 25
Additional paid-in capital 1,227,021 20,000 17,246 (1,247,021) 17,246
Retained earnings (accumulated deficit) 89,221 795 31,508 (89,221) 32,303
Treasury stock (236,751) (236,751)
Total stockholders' equity 1,316,814 20,795 (187,972) (1,336,814) (187,177)
Noncontrolling interest in consolidated affiliate 1,316,814 1,316,814
Total equity 1,316,814 20,795 (187,972) (20,000) 1,129,637
Total liabilities and equity $ 2,809,936 $ 21,547 $ 62,749 $ (84,338) $ 2,809,894
Altisource Asset Management Corporation
Consolidating Balance Sheet
December 31, 2013
(In thousands, unaudited)
Residential
(GAAP)
NewSource
stand-alone
(Non-GAAP)
AAMC
Stand-alone

(Non-GAAP)
Consolidating
Entries
AAMC
Consolidated
(GAAP)
Assets:
Real estate held for use:
Land $ 478 $ — $ — $ — $ 478
Rental residential properties, net 3,092 3,092
Real estate owned 32,332 32,332
Total real estate held for use, net 35,902 35,902
Real estate assets held for sale 1,186 1,186
Mortgage loans 1,207,163 1,207,163
Cash and cash equivalents 115,988 19,923 4,089 140,000
Restricted cash 5,878 5,878
Accounts receivable 1,428 1,428
Related party receivables 9,260 4,486 (4,486) 9,260
Investment in affiliate 18,000 2,000 (20,000)
Deferred leasing and financing costs, net 2,293 2,293
Prepaid expenses and other assets 1,542 452 1,994
Total assets $ 1,398,640 $ 19,923 $ 11,027 $ (24,486) $ 1,405,104
Liabilities:
Repurchase agreement $ 602,382 $ — $ — $ — $ 602,382
Accounts payable and accrued liabilities 4,952 1,920 6,872
Related party payables 5,879 1,490 (4,486) 2,883
Total liabilities 613,213 3,410 (4,486) 612,137
Commitments and contingencies
Equity:
Common stock 423 24 (423) 24
Additional paid-in capital 758,584 20,000 12,855 (778,584) 12,855
Retained earnings (accumulated deficit) 26,420 (77) (5,262) (26,420) (5,339)
Total stockholders' equity 785,427 19,923 7,617 (805,427) 7,540
Noncontrolling interest in consolidated affiliate 785,427 785,427
Total equity 785,427 19,923 7,617 (20,000) 792,967
Total liabilities and equity $ 1,398,640 $ 19,923 $ 11,027 $ (24,486) $ 1,405,104

CONTACT: Robin N. Lowe Chief Financial Officer T: 345-815-9919 E: Robin.Lowe@AltisourceAMC.comSource:Altisource Asset Management Corporation