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Altisource Asset Management Corporation Reports Fourth Quarter and Full Year 2014 Results

FREDERIKSTED, U.S. Virgin Islands, March 2, 2015 (GLOBE NEWSWIRE) -- Altisource Asset Management Corporation ("AAMC" or the "Company") (NYSE MKT:AAMC) announced today financial and operating results for the fourth quarter and full year of 2014. Net income attributable to stockholders for the fourth quarter of 2014 totaled $21.9 million, or $7.92 per diluted share, compared to a net loss attributable to stockholders of $0.4 million, or $0.17 per diluted share, for the fourth quarter of 2013.

Net income attributable to stockholders for the year ended December 31, 2014 totaled $59.7 million, or $21.07 per diluted share, compared to a net loss attributable to stockholders of $5.3 million, or $2.26 per diluted share, for the year ended December 31, 2013.

Chief Executive Officer George Ellison stated, "I am excited about the prospects of AAMC and look forward to accelerating the growth of Residential and developing additional clients for AAMC."

Fourth quarter 2014 highlights:

  • Accrued incentive management fees from Residential of $23.8 million as a result of the $0.55 per share dividend declared by Residential to its shareholders including $4.3 million of accrued incentive fees based on a potential post-year end special dividend by Residential intended to distribute 100% of its 2014 REIT taxable income.
  • Managed the completion of Residential's second non-performing loan securitization transaction in November 2014.
  • Facilitated Residential's realization of net proceeds from asset dispositions of $98.6 million representing an unlevered gain of 29%.
  • Managed Residential's acquisition of 287 NPLs and real estate owned properties having an aggregate market value of $46.7 million.

Full year 2014 highlights:

  • Earned incentive management fees of $67.9 million.
  • Managed Residential's resolution of an aggregate of 4,923 mortgage loans, including 3,682 REO conversions, in 2014 versus 510 mortgage loans in 2013, representing an increase of 865%.
  • Facilitated Residential's realization of net proceeds from asset dispositions of $233.9 million representing an unlevered gain of 31%.
  • Managed an increase in Residential's maximum aggregate borrowing capacity to $1.6 billion, including securitizations, versus $750.0 million at the end of 2013.

Recent developments:

  • Continued to build AAMC's management team with the appointment of George Ellison as Chief Executive Officer and Ashish Pandey as Executive Chairman.
  • Added two new mortgage loan servicers for Residential. Residential transferred $485 million of unpaid principal balance to Fay Servicing on February 28, 2015 and is in the process of transferring an additional $585 million of unpaid principal balance to BSI Financial Services in April 2015.
  • Increased the number of properties in Residential's rental portfolio to 653 as of February 28, 2015; renting properties at a rate of 82 per month in 2015 versus 40 per month in the second half of 2014

Webcast and conference call

The Company expects to host a webcast and conference call on Monday, March 9, 2015, at 11:30 a.m. Eastern Time to discuss its financial results for the fourth quarter and full year 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 Annual Reports 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
December 31, 2014
Three months ended
December 31, 2013
Year ended
December 31, 2014
Year ended
December 31, 2013
Revenues:
Rental revenues $845 $30 $1,564 $36
Net unrealized gain on mortgage loans 91,924 35,129 350,822 61,092
Net realized gain on mortgage loans 21,899 6,467 55,766 10,482
Net realized gain on re-performing mortgage loans 2,469 2,771
Net realized gain on real estate 4,938 9,482
Interest income 136 319 2,893 687
Total revenues 122,211 41,945 423,298 72,297
Expenses:
Residential property operating expenses 12,468 492 26,018 767
Real estate depreciation and amortization 603 21 1,067 25
Real estate selling costs and impairment 13,013 (26) 21,788 184
Mortgage loan servicing costs 18,593 6,630 68,181 10,418
Interest expense 11,295 3,405 35,647 4,568
General and administrative 4,313 7,467 19,891 18,265
Related party general and administrative 888 2,715 5,485 3,767
Total expenses 61,173 20,704 178,077 37,994
Other income (expense) 3,035 6 5,407
Income before income taxes 64,073 21,247 250,628 34,303
Income tax expense 668 2,096
Net income 63,405 21,247 248,532 34,303
Net income attributable to noncontrolling interest in consolidated affiliate (41,482) (21,644) (188,853) (39,596)
Net income attributable to common stockholders $21,923 $(397) $59,679 $(5,293)
Earnings per share of common stock – basic:
Earnings per basic share $9.99 $(0.17) $26.31 $(2.26)
Weighted average common stock outstanding – basic 2,189,318 2,346,993 2,261,968 2,346,993
Earnings per share of common stock – diluted:
Earnings per diluted share $7.92 $(0.17) $21.07 $(2.26)
Weighted average common stock outstanding – diluted 2,768,300 2,346,993 2,832,188 2,346,993
Altisource Asset Management Corporation
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
(Unaudited)
December 31, 2014 December 31, 2013
Assets:
Real estate held for use:
Land (from consolidated VIE) $14,424 $478
Rental residential properties (net of accumulated depreciation of $1,062 and $24, respectively - from consolidated VIE) 60,908 3,092
Real estate owned (from consolidated VIE) 457,045 32,332
Total real estate held for use, net 532,377 35,902
Real estate assets held for sale (from consolidated VIE) 92,230 1,186
Mortgage loans at fair value (from consolidated VIE) 1,959,044 1,207,163
Mortgage loans held for sale (from consolidated VIE) 12,535
Cash and cash equivalents (including from consolidated VIE $66,166 and $115,988, respectively) 116,782 140,000
Restricted cash (from consolidated VIE) 13,282 5,878
Accounts receivable (including from consolidated VIE $10,313 and $1,428, respectively) 11,068 1,428
Related party receivables (from consolidated VIE) 17,491 9,260
Deferred leasing and financing costs, net (from consolidated VIE) 4,251 2,293
Prepaid expenses and other assets (including from consolidated VIE $373 and $1,542, respectively) 1,638 1,994
Total assets $2,760,698 $1,405,104
Liabilities:
Repurchase agreements (from consolidated VIE) $1,015,000 $602,382
Other secured borrowings (from consolidated VIE) 324,082
Accounts payable and accrued liabilities (including from consolidated VIE $11,678 and $4,952, respectively) 16,726 6,872
Related party payables (including from consolidated VIE $4,879 and $1,409, respectively) 6,169 2,883
Total liabilities 1,361,977 612,137
Commitments and contingencies
Redeemable preferred stock:
Preferred stock, $0.01 par value, 250,000 shares issued and outstanding as of December 31, 2014 and none issued or outstanding as of December 31, 2013; redemption value $250,000 248,927
Equity:
Common stock, $.01 par value, 5,000,000 authorized shares; 2,452,101 and 2,188,136 shares issued and outstanding, respectively as of December 31, 2014 and 2,354,774 shares issued and outstanding as of December 31, 2013 25 24
Additional paid-in capital 14,152 12,855
Retained earnings (accumulated deficit) 54,174 (5,339)
Treasury stock, at cost, 263,965 shares as of December 31, 2014 and none as of December 31, 2013 (245,468)
Total stockholders' equity (deficit) (177,117) 7,540
Noncontrolling interest in consolidated affiliate 1,326,911 785,427
Total equity 1,149,794 792,967
Total liabilities and equity $2,760,698 $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 December 31, 2014
(In thousands, unaudited)
Residential
(GAAP)
NewSource
Stand-alone
(Non-GAAP)
AAMC Stand-
alone
(Non-GAAP)
Consolidating
Entries
AAMC
Consolidated
(GAAP)
Revenues:
Rental revenues $845 $— $— $— $845
Net unrealized gain on mortgage loans 91,924 91,924
Net realized gain on mortgage loans 21,899 21,899
Net realized gain on re-performing mortgage loans 2,469 2,469
Net realized gain on real estate 4,938 4,938
Interest income 136 156 (156) 136
Incentive management fee 23,820 (23,820)
Expense reimbursements 1,431 (1,431)
Total revenues 122,211 156 25,251 (25,407) 122,211
Expenses:
Residential property operating expenses 12,468 12,468
Real estate depreciation and amortization 603 603
Real estate selling costs and impairment 13,013 13,013
Mortgage loan servicing costs 18,593 18,593
Interest expense 11,460 (165) 11,295
General and administrative 1,382 3,787 (856) 4,313
Related party general and administrative 25,401 210 528 (25,251) 888
Total expenses 82,920 3,997 (328) (25,416) 61,173
Other income 2,160 3,030 5 (2,160) 3,035
Income before income taxes 41,451 (811) 25,584 (2,151) 64,073
Income tax expense (31) 699 668
Net income 41,482 (811) 24,885 (2,151) 63,405
Net income attributable to noncontrolling interest in consolidated affiliate (41,482) (41,482)
Net income attributable to common stockholders $41,482 $(811) $24,885 $(43,633) $21,923
Altisource Asset Management Corporation
Consolidating Statement of Operations
Year ended December 31, 2014
(In thousands, unaudited)
Residential
(GAAP)
NewSource
Stand-alone
(Non-GAAP)
AAMC Stand-
alone
(Non-GAAP)
Consolidating
Entries
AAMC
Consolidated
(GAAP)
Revenues:
Rental revenues $1,564 $— $— $— $1,564
Net unrealized gain on mortgage loans 350,822 350,822
Net realized gain on mortgage loans 55,766 55,766
Net realized gain on re-performing mortgage loans 2,771 2,771
Net realized gain on real estate 9,482 9,482
Interest income 2,893 156 (156) 2,893
Incentive management fee 67,949 (67,949)
Expense reimbursements 7,011 (7,011)
Total revenues 423,298 156 74,960 (75,116) 423,298
Expenses:
Residential property operating expenses 26,018 26,018
Real estate depreciation and amortization 1,067 1,067
Real estate selling costs and impairment 21,788 21,788
Mortgage loan servicing costs 68,181 68,181
Interest expense 35,812 (165) 35,647
General and administrative 7,047 4,168 8,676 19,891
Related party general and administrative 77,030 941 2,474 (74,960) 5,485
Total expenses 236,943 5,109 11,150 (75,125) 178,077
Other income 2,543 5,015 9 (2,160) 5,407
Income before income taxes 188,898 62 63,819 (2,151) 250,628
Income tax expense 45 2,051 2,096
Net income 188,853 62 61,768 (2,151) 248,532
Net income attributable to noncontrolling interest in consolidated affiliate (188,853) (188,853)
Net income attributable to common stockholders $188,853 $62 $61,768 $(191,004) $59,679
Altisource Asset Management Corporation
Consolidating Statement of Operations
Three months ended December 31, 2013
(In thousands, unaudited)
Residential
(GAAP)
NewSource
Stand-alone
(Non-GAAP)
AAMC Stand-
alone
(Non-GAAP)
Consolidating
Entries
AAMC
Consolidated
(GAAP)
Revenues:
Rental revenues $30 $— $— $— $30
Net unrealized gain on mortgage loans 35,129 35,129
Net realized gain on mortgage loans 6,467 6,467
Interest income 319 319
Incentive management fee 4,829 (4,829)
Expense reimbursements 2,040 (2,040)
Total revenues 41,945 6,869 (6,869) 41,945
Expenses:
Residential property operating expenses 492 492
Real estate depreciation and amortization 21 21
Real estate selling costs and impairment (26) (26)
Mortgage loan servicing costs 6,630 6,630
Interest expense 3,405 3,405
General and administrative 1,728 77 5,662 7,467
Related party general and administrative 8,057 1,527 (6,869) 2,715
Total expenses 20,307 77 7,189 (6,869) 20,704
Other income 6 6
Net income (loss) 21,644 (77) (320) 21,247
Net income attributable to noncontrolling interest in consolidated affiliate (21,644) (21,644)
Net income (loss) attributable to common stockholders $21,644 $(77) $(320) $(21,644) $(397)
Altisource Asset Management Corporation
Consolidating Statement of Operations
Year ended December 31, 2013
(In thousands, unaudited)
Residential
(GAAP)
NewSource
Stand-alone
(Non-GAAP)
AAMC Stand-
alone
(Non-GAAP)
Consolidating
Entries
AAMC
Consolidated
(GAAP)
Revenues:
Rental revenues $36 $— $— $— $36
Net unrealized gain on mortgage loans 61,092 61,092
Net realized gain on mortgage loans 10,482 10,482
Interest income 687 687
Incentive management fee 4,880 (4,880)
Expense reimbursements 5,411 (5,411)
Total revenues 72,297 10,291 (10,291) 72,297
Expenses:
Residential property operating expenses 767 767
Real estate depreciation and amortization 25 25
Real estate selling costs and impairment 184 184
Mortgage loan servicing costs 10,418 10,418
Interest expense 4,568 4,568
General and administrative 4,208 77 13,980 18,265
Related party general and administrative 12,531 1,527 (10,291) 3,767
Total expenses 32,701 77 15,507 (10,291) 37,994
Other expense
Net income (loss) 39,596 (77) (5,216) 34,303
Net income attributable to noncontrolling interest in consolidated affiliate (39,596) (39,596)
Net income (loss) attributable to common stockholders $39,596 $(77) $(5,216) $(39,596) $(5,293)
Altisource Asset Management Corporation
Consolidating Balance Sheet
December 31, 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 $14,424 $— $— $— $14,424
Rental residential properties, net 60,908 60,908
Real estate owned 457,045 457,045
Total real estate held for use, net 532,377 532,377
Real estate assets held for sale 92,230 92,230
Mortgage loans 1,959,044 1,959,044
Mortgage loans held for sale 12,535 12,535
Cash and cash equivalents 66,166 6,026 44,590 116,782
Restricted cash 13,282 13,282
Accounts receivable 10,313 919 1 (165) 11,068
Related party receivables 17,491 14,991 28,512 (43,503) 17,491
Investment in affiliate 18,000 2,000 (20,000)
Deferred leasing and financing costs, net 4,251 4,251
Prepaid expenses and other assets 373 3 1,262 1,638
Total assets $2,726,062 $21,939 $76,365 $(63,668) $2,760,698
Liabilities:
Repurchase agreements $1,015,000 $— $— $— $1,015,000
Other secured borrowings 339,082 (15,000) 324,082
Accounts payable and accrued liabilities 11,678 3,173 2,040 (165) 16,726
Related party payables 33,391 941 349 (28,512) 6,169
Total liabilities 1,399,151 4,114 2,389 (43,677) 1,361,977
Commitments and contingencies
Preferred stock 248,927 248,927
Equity:
Common stock 572 25 (572) 25
Additional paid-in capital 1,227,091 20,000 14,152 (1,247,091) 14,152
Retained earnings (accumulated deficit) 99,248 (2,175) 56,340 (99,239) 54,174
Treasury stock (245,468) (245,468)
Total stockholders' equity (deficit) 1,326,911 17,825 (174,951) (1,346,902) (177,117)
Noncontrolling interest in consolidated affiliate 1,326,911 1,326,911
Total equity (deficit) 1,326,911 17,825 (174,951) (19,991) 1,149,794
Total liabilities and equity $2,726,062 $21,939 $76,365 $(63,668) $2,760,698
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: 1-345-815-9919 E: Robin.Lowe@AltisourceAMC.comSource:Altisource Asset Management Corporation