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Altisource Asset Management Corporation Reports First Quarter 2015 Results

CHRISTIANSTED, U.S. Virgin Islands, May 7, 2015 (GLOBE NEWSWIRE) -- Altisource Asset Management Corporation ("AAMC" or the "Company") (NYSE MKT:AAMC) today announced financial and operating results for the first quarter of 2015. Net income attributable to stockholders for the first quarter of 2015 totaled $6.9 million, or $2.50 per diluted share, compared to net income attributable to stockholders of $6.8 million, or $2.39 per diluted share, for the first quarter of 2014.

2015 highlights to date:

  • Executed a new asset management agreement with Altisource Residential Corporation ("Residential") that positions AAMC for sustainable growth. The total payment to AAMC for the first quarter 2015 under the new agreement is $15.7 million.
  • Negotiated Residential's establishment of a new $100.0 million facility to finance REO assets.
  • Negotiated Residential's renewal of its repurchase facility with Credit Suisse to increase its funding capacity from $225 million to $275 million with increased REO sublimits.
  • Facilitated Residential's appointment of two new mortgage servicers and arranged for the transfer of approximately $1 billion of servicing to the new servicers.
  • Managed Residential's resolution of an aggregate of 1,069 mortgage loans.
  • Managed the growth of Residential's rental portfolio to 785 properties as of April 30, 2015, including 655 rented properties.

"During the quarter, we executed a new asset management with Residential that we believe benefits both AAMC and Residential. We believe the new agreement and the other actions that we have taken with respect to financing and servicing transfers put Residential on a strong foundation to return to growth going forward." said Chief Executive Officer George Ellison.

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 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
March 31, 2015
Three months ended
March 31, 2014
Revenues:
Rental revenues $ 1,400 $ 69
Net unrealized gain on mortgage loans 61,134 65,130
Net realized gain on mortgage loans 15,382 9,321
Net realized gain on re-performing mortgage loans 151
Net realized gain on real estate 10,608
Interest income 240 108
Total revenues 88,915 74,628
Expenses:
Residential property operating expenses 12,459 1,050
Real estate depreciation and amortization 998 48
Real estate selling costs and impairment 14,691 354
Mortgage loan servicing costs 18,266 11,437
Interest expense 11,483 5,708
General and administrative 10,790 5,601
Related party general and administrative 773 923
Total expenses 69,460 25,121
Other income
Income before income taxes 19,455 49,507
Income tax expense 143 766
Net income 19,312 48,741
Net income attributable to noncontrolling interest in consolidated affiliate (12,424) (41,913)
Net income attributable to common stockholders $ 6,888 $ 6,828
Earnings per share of common stock – basic:
Earnings per basic share $ 3.10 $ 2.88
Weighted average common stock outstanding – basic 2,203,699 2,367,202
Earnings per share of common stock – diluted:
Earnings per diluted share $ 2.50 $ 2.39
Weighted average common stock outstanding – diluted 2,757,206 2,856,079
Altisource Asset Management Corporation
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
(Unaudited)
March 31, 2015 December 31, 2014
Assets:
Real estate held for use:
Land (from consolidated VIE) $ 21,267 $ 14,424
Rental residential properties (net of accumulated depreciation of $2,046 and $1,062, respectively - from consolidated VIE) 86,206 60,908
Real estate owned (from consolidated VIE) 456,479 457,045
Total real estate held for use, net 563,952 532,377
Real estate assets held for sale (from consolidated VIE) 150,807 92,230
Mortgage loans at fair value (from consolidated VIE) 1,853,495 1,959,044
Mortgage loans held for sale (from consolidated VIE) 12,485 12,535
Cash and cash equivalents (including from consolidated VIE $53,246 and $66,166, respectively) 98,386 116,782
Restricted cash (from consolidated VIE) 14,766 13,282
Accounts receivable (including from consolidated VIE $10,398 and $10,313, respectively) 10,399 11,068
Related party receivables (from consolidated VIE) 22,530 17,491
Deferred leasing and financing costs, net (from consolidated VIE) 5,384 4,251
Prepaid expenses and other assets (including from consolidated VIE $672 and $373, respectively) 2,261 1,638
Total assets $ 2,734,465 $ 2,760,698
Liabilities:
Repurchase agreements (from consolidated VIE) $ 929,287 $ 1,015,000
Other secured borrowings (from consolidated VIE) 364,849 324,082
Accounts payable and accrued liabilities (including from consolidated VIE $42,686 and $11,678, respectively) 48,314 16,726
Related party payables (including from consolidated VIE $5,782 and $4,879, respectively) 9,092 6,169
Total liabilities 1,351,542 1,361,977
Commitments and contingencies
Redeemable preferred stock:
Preferred stock, $0.01 par value, 250,000 shares issued and outstanding as of March 31, 2015 and December 31, 2014; redemption value $250,000 248,979 248,927
Equity:
Common stock, $.01 par value, 5,000,000 authorized shares; 2,470,783 and 2,206,652 shares issued and outstanding, respectively as of March 31, 2015 and 2,452,101 and 2,188,136 shares issued and outstanding, respectively, as of December 31, 2014 25 25
Additional paid-in capital 15,048 14,152
Retained earnings 61,009 54,174
Treasury stock, at cost, 264,131 shares as of March 31, 2015 and 263,965 shares as of December 31, 2014 (245,519) (245,468)
Total stockholders' equity (169,437) (177,117)
Noncontrolling interest in consolidated affiliate 1,303,381 1,326,911
Total equity 1,133,944 1,149,794
Total liabilities and equity $ 2,734,465 $ 2,760,698

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 March 31, 2015
(In thousands, unaudited)
Residential NewSource Stand-alone AAMC Stand-alone Consolidating AAMC Consolidated
(GAAP) (Non-GAAP) (Non-GAAP) Entries (GAAP)
Revenues:
Rental revenues $ 1,400 $ — $ — $ — $ 1,400
Net unrealized gain on mortgage loans 61,134 61,134
Net realized gain on mortgage loans 15,382 15,382
Net realized gain on re-performing mortgage loans 151 151
Net realized gain on real estate 10,608 10,608
Interest income 240 160 (160) 240
Incentive management fee 14,900 (14,900)
Expense reimbursements 960 (960
Total revenues 88,915 160 15,860 (16,020) 88,915
Expenses:
Residential property operating expenses 12,459 12,459
Real estate depreciation and amortization 998 998
Real estate selling costs and impairment 14,691 14,691
Mortgage loan servicing costs 18,266 18,266
Interest expense 11,643 (160) 11,483
General and administrative 4,379 75 6,336 10,790
Related party general and administrative 16,052 210 2,371 (17,860) 773
Total expenses 78,488 285 8,707 (18,020) 69,460
Other income 2,000 (2,000)
Income before income taxes 12,427 (125) 7,153 19,455
Income tax expense 3 140 143
Net income 12,424 (125) 7,013 19,312
Net income attributable to noncontrolling interest in consolidated affiliate (12,424) (12,424)
Net income attributable to common stockholders $ 12,424 $ (125) $ 7,013 $ (12,424) $ 6,888
Altisource Asset Management Corporation
Consolidating Statement of Operations
Three months ended March 31, 2014
(In thousands, unaudited)
Residential NewSource Stand-alone AAMC Stand-alone Consolidating AAMC Consolidated
(GAAP) (Non-GAAP) (Non-GAAP) Entries (GAAP)
Revenues:
Rental revenues $ 69 $ — $ — $ — $ 69
Net unrealized gain on mortgage loans 65,130 65,130
Net realized gain on mortgage loans 9,321 9,321
Interest income 108 108
Incentive management fee 10,911 (10,911)
Expense reimbursements 1,780 (1,780)
Total revenues 74,628 12,691 (12,691) 74,628
Expenses:
Residential property operating expenses 1,050 1,050
Real estate depreciation and amortization 48 48
Real estate selling costs and impairment 354 354
Mortgage loan servicing costs 11,437 11,437
Interest expense 5,708 5,708
General and administrative 1,038 30 4,533 5,601
Related party general and administrative 12,632 311 671 (12,691) 923
Total expenses 32,267 341 5,204 (12,691) 25,121
Income before income taxes 42,361 (341) 7,487 49,507
Income tax expense 448 318 766
Net income 41,913 (341) 7,169 48,741
Net income attributable to noncontrolling interest in consolidated affiliate (41,913) (41,913)
Net income attributable to common stockholders $ 41,913 $ (341) $ 7,169 $ (41,913) $ 6,828
Altisource Asset Management Corporation
Consolidating Balance Sheet
March 31, 2015
(In thousands, unaudited)
Residential NewSource stand-alone AAMC Stand-alone Consolidating AAMC Consolidated
(GAAP) (Non-GAAP) (Non-GAAP) Entries (GAAP)
Assets:
Real estate held for use:
Land $ 21,267 $ — $ — $ — $ 21,267
Rental residential properties, net 86,206 86,206
Real estate owned 456,479 456,479
Total real estate held for use, net 563,952 563,952
Real estate assets held for sale 150,807 150,807
Mortgage loans at fair value 1,853,495 1,853,495
Mortgage loans held for sale 12,485 12,485
Cash and cash equivalents 53,246 5,103 40,037 98,386
Restricted cash 14,766 14,766
Accounts receivable 10,398 324 1 (324) 10,399
Related party receivables 24,530 14,991 44,759 (61,750) 22,530
Investment in affiliate 18,000 2,000 (20,000)
Deferred leasing and financing costs, net 5,384 5,384
Prepaid expenses and other assets 672 26 1,554 9 2,261
Total assets $ 2,707,735 $ 20,444 $ 88,351 $ (82,065) $ 2,734,465
Liabilities:
Repurchase agreements $ 929,287 $ — $ — $ — $ 929,287
Other secured borrowings 379,840 (14,991) 364,849
Accounts payable and accrued liabilities 42,686 1,594 4,358 (324) 48,314
Related party payables 52,541 1,151 2,159 (46,759) 9,092
Total liabilities 1,404,354 2,745 6,517 (62,074) 1,351,542
Commitments and contingencies
Redeemable preferred stock 248,979 248,979
Equity:
Common stock 572 25 (572) 25
Additional paid-in capital 1,227,175 20,000 15,048 (1,247,175) 15,048
Retained earnings (accumulated deficit) 75,634 (2,301) 63,301 (75,625) 61,009
Treasury stock (245,519) (245,519)
Total stockholders' equity 1,303,381 17,699 (167,145) (1,323,372) (169,437)
Noncontrolling interest in consolidated affiliate 1,303,381 1,303,381
Total equity 1,303,381 17,699 (167,145) (19,991) 1,133,944
Total liabilities and equity $ 2,707,735 $ 20,444 $ 88,351 $ (82,065) $ 2,734,465
Altisource Asset Management Corporation
Consolidating Balance Sheet
December 31, 2014
(In thousands, unaudited)
Residential NewSource stand-alone AAMC Stand-alone Consolidating AAMC Consolidated
(GAAP) (Non-GAAP) (Non-GAAP) Entries (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 at fair value 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
Redeemable 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 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 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

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