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Altisource Asset Management Corporation Reports Second Quarter 2015 Results

CHRISTIANSTED, U.S. Virgin Islands, Aug. 10, 2015 (GLOBE NEWSWIRE) -- Altisource Asset Management Corporation (“AAMC” or the “Company”) (NYSE MKT:AAMC) today announced financial and operating results for the second quarter of 2015.

Second Quarter 2015 Highlights:

  • Increased estimated taxable income for Altisource Residential Corporation (“Residential”) by 42% for the second quarter of 2015 compared to the second quarter of 2014.
  • Facilitated Residential’s declaration and payment of a $0.55 per share dividend.
  • Negotiated Residential’s agreement to purchase up to 1,325 single-family rental homes from Invitation Homes for an aggregate purchase price of $112.6 million. Transaction expected to close in August 2015.
  • Advised Residential on its completion of a third non-performing loan securitization in June 2015.
  • Transferred servicing of 4,342 of Residential’s loans with an aggregate UPB of $1.2 billion to its two new mortgage servicers.
  • Advised Residential on the sale of 189 re-performing mortgage loans for total proceeds of $34.6 million.
  • Initiated a program for Residential to acquire rental properties on a one-by-one basis using a proprietary valuation model. Expect to commence purchases in the third quarter of 2015.
  • Earned asset management fees of $5.4 million.

“In the second quarter of 2015, we took crucial steps to diversify Residential’s acquisition strategies to grow its single-family rental portfolio,” said Chairman and Chief Executive Officer George G. Ellison. “Although our asset management fees declined during the second quarter under the new asset management agreement, we believe the change in our fee structure with Residential promotes the long-term stability of both companies, aligns our incentives with Residential’s strategy of becoming a large single family rental home operator and better positions Residential for growth and improved returns. We believe this will enable AAMC to achieve stronger, more predictable fees in the future as Residential’s rental portfolio grows.”

Second Quarter 2015 Financial Results

Net income attributable to stockholders for the second quarter of 2015 totaled $0.7 million, or $0.27 per diluted share, compared to net income attributable to stockholders of $13.2 million, or $4.60 per diluted share, for the second quarter of 2014. Net income attributable to stockholders for the six months ended June 30, 2015 totaled $7.6 million, or $2.77 per diluted share, compared to net income attributable to stockholders of $20.1 million, or $7.00 per diluted share, for the six months ended June 30, 2014.

Webcast and conference call

The Company will host a webcast and conference call on Monday, August 10, 2015, at 10:00 a.m. Eastern Time to discuss its financial results for the second quarter of 2015. 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 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 June 30, 2015
Three months
ended June 30, 2014
Six months
ended June 30, 2015
Six months
ended June 30, 2014
Revenues:
Rental revenues$2,140 $181 $3,540 $250
Net unrealized gain on mortgage loans42,209 105,042 103,343 170,172
Net realized gain on mortgage loans19,272 10,819 34,654 20,140
Net realized gain on re-performing mortgage loans254 405
Net realized gain on real estate12,404 1,234 23,012 1,234
Interest income240 81 480 189
Total revenues76,519 117,357 165,434 191,985
Expenses:
Residential property operating expenses16,857 3,253 29,316 4,303
Real estate depreciation and amortization1,344 103 2,342 151
Real estate selling costs and impairment8,839 2,879 23,530 3,233
Mortgage loan servicing costs16,246 16,925 34,512 28,362
Interest expense13,237 6,945 24,720 12,653
General and administrative5,967 4,542 17,530 10,143
Related party general and administrative 2,675 3,598
Total expenses62,490 37,322 131,950 62,443
Other income 786 786
Income before income taxes14,029 80,821 33,484 130,328
Income tax expense (benefit)194 (191) 337 575
Net income13,835 81,012 33,147 129,753
Net income attributable to noncontrolling interest in consolidated affiliate(13,092) (67,782) (25,516) (109,695)
Net income attributable to common stockholders$743 $13,230 $7,631 $20,058
Earnings per share of common stock – basic:
Earnings per basic share$0.31 $5.87 $3.40 $8.68
Weighted average common stock outstanding – basic2,218,533 2,255,278 2,211,357 2,310,931
Earnings per share of common stock – diluted:
Earnings per diluted share$0.27 $4.60 $2.77 $7.00
Weighted average common stock outstanding – diluted2,746,955 2,874,906 2,752,322 2,865,185


Altisource Asset Management Corporation
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
(Unaudited)
June 30, 2015 December 31, 2014
Assets:
Real estate held for use:
Land (from consolidated VIE)$23,743 $14,424
Rental residential properties (net of accumulated depreciation of $3,351 and $1,062, respectively - from consolidated VIE)97,533 60,908
Real estate owned (from consolidated VIE)548,137 457,045
Total real estate held for use, net669,413 532,377
Real estate assets held for sale (from consolidated VIE)134,027 92,230
Mortgage loans at fair value (from consolidated VIE)1,716,489 1,959,044
Mortgage loans held for sale (from consolidated VIE)5,977 12,535
Cash and cash equivalents (including from consolidated VIE $70,502 and $66,166, respectively)145,897 116,782
Restricted cash (from consolidated VIE)18,459 13,282
Accounts receivable (including from consolidated VIE $45,981 and $10,313, respectively)45,981 11,068
Related party receivables (from consolidated VIE) 17,491
Deferred leasing and financing costs, net (from consolidated VIE)8,605 4,251
Prepaid expenses and other assets (including from consolidated VIE $6,184 and $373, respectively)7,554 1,638
Total assets$2,752,402 $2,760,698
Liabilities:
Repurchase and loan and security agreements (from consolidated VIE)$810,236 $1,015,000
Other secured borrowings (from consolidated VIE)523,925 324,082
Accounts payable and accrued liabilities (including from consolidated VIE $54,247 and $11,678, respectively)57,375 16,726
Related party payables (including from consolidated VIE $0 and $4,879, respectively)0 6,169
Total liabilities1,391,536 1,361,977
Commitments and contingencies
Redeemable preferred stock:
Preferred stock, $0.01 par value, 250,000 shares issued and outstanding as of June 30, 2015 and December 31, 2014; redemption value $250,000249,030 248,927
Equity:
Common stock, $.01 par value, 5,000,000 authorized shares; 2,509,844 and 2,207,369 shares issued and outstanding, respectively as of June 30, 2015 and 2,452,101 and 2,188,136 shares issued and outstanding, respectively, as of December 31, 201425 25
Additional paid-in capital17,106 14,152
Retained earnings61,702 54,174
Treasury stock, at cost, 302,475 shares as of June 30, 2015 and 263,965 shares as of December 31, 2014(252,072) (245,468)
Total stockholders' equity(173,239) (177,117)
Noncontrolling interest in consolidated affiliate1,285,075 1,326,911
Total equity1,111,836 1,149,794
Total liabilities and equity$2,752,402 $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 June 30, 2015
(In thousands)
Residential
(GAAP)
NewSource
Stand-alone
(Non-GAAP)
AAMC Stand-
alone
(Non-GAAP)
Consolidating
Entries
AAMC
Consolidated
(GAAP)
Revenues:
Rental revenues$2,140 $ $ $ $2,140
Net unrealized gain on mortgage loans42,209 42,209
Net realized gain on mortgage loans19,272 19,272
Net realized gain on re-performing mortgage loans254 254
Net realized gain on real estate12,404 12,404
Interest income240 161 (161)240
Conversion fee 399 (399)
Base management fee 4,962 (4,962)
Expense reimbursements
Total revenues76,519 161 5,361 (5,522)76,519
Expenses:
Residential property operating expenses16,857 16,857
Real estate depreciation and amortization1,344 1,344
Real estate selling costs and impairment8,839 8,839
Mortgage loan servicing costs16,246 16,246
Interest expense13,398 (161)13,237
General and administrative1,569 43 4,355 5,967
Related party general and administrative5,151 210 (5,361)
Total expenses63,404 253 4,355 (5,522)62,490
Income (loss) before income taxes13,115 (92)1,006 14,029
Income tax expense23 171 194
Net income (loss)13,092 (92)835 13,835
Net income attributable to noncontrolling interest in consolidated affiliate (13,092)(13,092)
Net income (loss) attributable to common stockholders$13,092 $(92)$835 $(13,092)$743


Altisource Asset Management Corporation
Consolidating Statement of Operations
Six months ended June 30, 2015
(In thousands, unaudited)
Residential
(GAAP)
NewSource
Stand-alone
(Non-GAAP)
AAMC Stand-
alone
(Non-GAAP)
Consolidating
Entries
AAMC
Consolidated
(GAAP)
Revenues:
Rental revenues$3,540 $ $ $ $3,540
Net unrealized gain on mortgage loans103,343 103,343
Net realized gain on mortgage loans34,654 34,654
Net realized gain on re-performing mortgage loans405 405
Net realized gain on real estate23,012 23,012
Interest income480 321 (321)480
Conversion fee 399 (399)
Base management fee 5,172 (5,172)
Incentive management fee 14,900 (14,900)
Expense reimbursements 750 (750)
Total revenues165,434 321 21,221 (21,542)165,434
Expenses:
Residential property operating expenses29,316 29,316
Real estate depreciation and amortization2,342 2,342
Real estate selling costs and impairment23,530 23,530
Mortgage loan servicing costs34,512 34,512
Interest expense25,041 (321)24,720
General and administrative6,350 118 11,062 17,530
Related party general and administrative20,801 420 2,000 (23,221)
Total expenses141,892 538 13,062 (23,542)131,950
Other income2,000 (2,000)
Income (loss) before income taxes25,542 (217)8,159 33,484
Income tax expense26 311 337
Net income (loss)25,516 (217)7,848 33,147
Net income attributable to noncontrolling interest in consolidated affiliate (25,516)(25,516)
Net income (loss) attributable to common stockholders$25,516 $(217)$7,848 $(25,516)$7,631


Altisource Asset Management Corporation
Consolidating Statement of Operations
Three months ended June 30, 2014
(In thousands)
Residential
(GAAP)
NewSource
Stand-alone
(Non-GAAP)
AAMC Stand-
alone

(Non-GAAP)
Consolidating
Entries
AAMC
Consolidated
(GAAP)
Revenues:
Rental revenues$181 $ $ $ $181
Net unrealized gain on mortgage loans105,042 105,042
Net realized gain on mortgage loans10,819 10,819
Net realized gain on real estate1,234 1,234
Interest income81 81
Base management fee 210 (210)
Incentive management fee 13,715 (13,715)
Expense reimbursements 1,789 (1,789)
Total revenues117,357 15,714 (15,714)117,357
Expenses:
Residential property operating expenses3,253 3,253
Real estate depreciation and amortization103 103
Real estate selling costs and impairment2,879 2,879
Mortgage loan servicing costs16,925 16,925
Interest expense6,945 6,945
General and administrative2,808 65 1,669 4,542
Related party general and administrative17,467 210 712 (15,714)2,675
Total expenses50,380 275 2,381 (15,714)37,322
Other income383 399 4 786
Income before income taxes67,360 124 13,337 80,821
Income tax (benefit) expense(422) 231 (191)
Net income67,782 124 13,106 81,012
Net income attributable to noncontrolling interest in consolidated affiliate (67,782)(67,782)
Net income attributable to common stockholders$67,782 $124 $13,106 $(67,782)$13,230


Altisource Asset Management Corporation
Consolidating Statement of Operations
Six months ended June 30, 2014
(In thousands)
Residential
(GAAP)
NewSource
Stand-alone
(Non-GAAP)
AAMC Stand-
alone

(Non-GAAP)
Consolidating
Entries
AAMC
Consolidated
(GAAP)
Revenues:
Rental revenues$250 $ $ $ $250
Net unrealized gain on mortgage loans170,172 170,172
Net realized gain on mortgage loans20,140 20,140
Net realized gain on real estate1,234 1,234
Interest income189 189
Base management fee 521 (521)
Incentive management fee 24,626 (24,626)
Expense reimbursements 3,258 (3,258)
Total revenues191,985 28,405 (28,405)191,985
Expenses:
Residential property operating expenses4,303 4,303
Real estate depreciation and amortization151 151
Real estate selling costs and impairment3,233 3,233
Mortgage loan servicing costs28,362 28,362
Interest expense12,653 12,653
General and administrative3,846 95 6,202 10,143
Related party general and administrative30,099 521 1,383 (28,405)3,598
Total expenses82,647 616 7,585 (28,405)62,443
Other income383 399 4 786
Income before income taxes109,721 (217)20,824 130,328
Income tax expense26 549 575
Net income (loss)109,695 (217)20,275 129,753
Net income attributable to noncontrolling interest in consolidated affiliate (109,695)(109,695)
Net income (loss) attributable to common stockholders$109,695 $(217)$20,275 $(109,695)$20,058


Altisource Asset Management Corporation
Consolidating Balance Sheet
June 30, 2015
(In thousands)
Residential
(GAAP)
NewSource
stand-alone
(Non-GAAP)
AAMC Stand-
alone

(Non-GAAP)
Consolidating
Entries
AAMC
Consolidated
(GAAP)
Assets:
Real estate held for use:
Land$23,743 $ $ $ $23,743
Rental residential properties, net97,533 97,533
Real estate owned548,137 548,137
Total real estate held for use, net669,413 669,413
Real estate assets held for sale134,027 134,027
Mortgage loans at fair value1,716,489 1,716,489
Mortgage loans held for sale5,977 5,977
Cash and cash equivalents70,502 5,092 70,303 145,897
Restricted cash18,459 18,459
Accounts receivable45,981 485 (485)45,981
Related party receivables 14,991 6,524 (21,515)
Investment in affiliate18,000 2,000 (20,000)
Deferred leasing and financing costs, net8,605 8,605
Prepaid expenses and other assets6,184 19 1,342 9 7,554
Total assets$2,693,637 $20,587 $80,169 $(41,991)$2,752,402
Liabilities:
Repurchase agreements$810,236 $ $ $ $810,236
Other secured borrowings538,916 (14,991)523,925
Accounts payable and accrued liabilities54,247 1,619 1,994 (485)57,375
Related party payables5,163 1,361 (6,524)
Total liabilities1,408,562 2,980 1,994 (22,000)1,391,536
Commitments and contingencies
Redeemable preferred stock 249,030 249,030
Equity:
Common stock572 25 (572)25
Additional paid-in capital1,227,246 20,000 17,106 (1,247,246)17,106
Retained earnings (accumulated deficit)57,257 (2,393)64,086 (57,248)61,702
Treasury stock (252,072) (252,072)
Total stockholders' equity1,285,075 17,607 (170,855)(1,305,066)(173,239)
Noncontrolling interest in consolidated affiliate 1,285,075 1,285,075
Total equity1,285,075 17,607 (170,855)(19,991)1,111,836
Total liabilities and equity$2,693,637 $20,587 $80,169 $(41,991)$2,752,402


Altisource Asset Management Corporation
Consolidating Balance Sheet
December 31, 2014
(In thousands)
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, net60,908 60,908
Real estate owned457,045 457,045
Total real estate held for use, net532,377 532,377
Real estate assets held for sale92,230 92,230
Mortgage loans at fair value1,959,044 1,959,044
Mortgage loans held for sale12,535 12,535
Cash and cash equivalents66,166 6,026 44,590 116,782
Restricted cash13,282 13,282
Accounts receivable10,313 919 1 (165)11,068
Related party receivables17,491 14,991 28,512 (43,503)17,491
Investment in affiliate18,000 2,000 (20,000)
Deferred leasing and financing costs, net4,251 4,251
Prepaid expenses and other assets373 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 borrowings339,082 (15,000)324,082
Accounts payable and accrued liabilities11,678 3,173 2,040 (165)16,726
Related party payables33,391 941 349 (28,512)6,169
Total liabilities1,399,151 4,114 2,389 (43,677)1,361,977
Commitments and contingencies
Redeemable preferred stock 248,927 248,927
Equity:
Common stock572 25 (572)25
Additional paid-in capital1,227,091 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' equity1,326,911 17,825 (174,951)(1,346,902)(177,117)
Noncontrolling interest in consolidated affiliate 1,326,911 1,326,911
Total equity1,326,911 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


FOR FURTHER INFORMATION CONTACT: Robin N. Lowe Chief Financial Officer T: 1-345-815-9919 E: Robin.Lowe@AltisourceAMC.com

Source:Altisource Asset Management Corporation