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Altisource Asset Management Corporation Reports Third Quarter 2015 Results

CHRISTIANSTED, U.S. Virgin Islands, Nov. 09, 2015 (GLOBE NEWSWIRE) -- Altisource Asset Management Corporation (“AAMC” or the “Company”) (NYSE MKT:AAMC) today announced financial and operating results for the third quarter of 2015.

Third Quarter 2015 Highlights:

  • Increased the rental portfolio of Altisource Residential Corporation (“Residential”) to 2,516 homes as of September 30, 2015, including 2,105 rented properties, 156 properties listed for rent and 255 properties under leasehold renovation and unit turn, representing an increase of 156% over the 984 properties in the rental portfolio as of June 30, 2015.
  • Facilitated Residential's agreement to sell 871 non-performing loans at its balance sheet carrying value; unpaid principal balance (“UPB”) of loans to be sold is $346.9 million, or approximately 15% of the total UPB in Residential's loan portfolio; sale is expected to close in the fourth quarter.1
  • Advised Residential on the completion of its acquisition of 1,314 rental homes in Atlanta for an aggregate purchase price of $111.4 million.
  • Facilitated Residential’s declaration and payment of a $0.55 per share dividend.
  • Negotiated Residential’s amendment of its repurchase facility with Wells Fargo to extend the facility to September 2017, increase the funding capacity to $750.0 million and increase its ability to finance REO to 40% of the facility.
  • Earned asset management fees of $5.2 million.

“In the third quarter of 2015, we successfully implemented Residential's diversified acquisition strategy to substantially grow its single-family rental portfolio,” said Chairman and Chief Executive Officer George G. Ellison. “Although our asset management fees remained lower during the third quarter, we continue to believe the amended fee structure 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 the successful implementation of Residential's strategy will be an important factor in AAMC's future growth.”

_____________
1 Sale is subject to completion of due diligence and final negotiation of definitive purchase agreement. Final purchase price is expected to be in the range of 1-2% of Residential’s balance sheet carrying value for the loans.

Third Quarter 2015 Financial Results

Net loss attributable to stockholders for the third quarter of 2015 totaled $2.0 million, or $0.92 per diluted share, compared to net income attributable to stockholders of $17.7 million, or $6.25 per diluted share, for the third quarter of 2014. Net income attributable to stockholders for the nine months ended September 30, 2015 totaled $5.7 million, or $2.07 per diluted share, compared to net income attributable to stockholders of $37.8 million, or $13.23 per diluted share, for the nine months ended September 30, 2014.

Webcast and conference call

The Company will host a webcast and conference call on Monday, November 9, 2015, at 10:00 a.m. Eastern Time to discuss its financial results for the third 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 September
30, 2015
Three months
ended September
30, 2014
Nine months
ended September
30, 2015
Nine months
ended September
30, 2014
Revenues:
Rental revenues$4,021 $469 $7,561 $719
Net unrealized gain on mortgage loans27,499 88,726 130,842 258,898
Net realized gain on mortgage loans12,874 13,727 47,528 33,867
Net realized gain on mortgage loans held for sale100 302 505 302
Net realized gain on real estate13,914 3,310 36,926 4,544
Interest income115 2,568 595 2,757
Total revenues58,523 109,102 223,957 301,087
Expenses:
Residential property operating expenses16,574 9,247 45,890 13,550
Real estate depreciation and amortization2,050 313 4,392 464
Real estate and mortgage loan selling costs and impairment10,705 5,542 34,235 8,775
Mortgage loan servicing costs13,477 21,226 47,989 49,588
Interest expense14,194 11,699 38,914 24,352
General and administrative8,935 5,435 26,465 15,578
Related party general and administrative 999 4,597
Total expenses65,935 54,461 197,885 116,904
Other income 1,586 2,372
(Loss) income before income taxes(7,412) 56,227 26,072 186,555
Income tax (benefit) expense(97) 853 240 1,428
Net (loss) income(7,315) 55,374 25,832 185,127
Net loss (income) attributable to noncontrolling interest in consolidated affiliate5,335 (37,676) (20,181) (147,371)
Net (loss) income attributable to common stockholders$(1,980) $17,698 $5,651 $37,756
(Loss) earnings per share of common stock – basic:
(Loss) earnings per basic share$(0.92) $7.91 $2.49 $16.51
Weighted average common stock outstanding – basic2,208,658 2,238,225 2,210,448 2,286,451
(Loss) earnings per share of common stock – diluted:
(Loss) earnings per diluted share$(0.92) $6.25 $2.07 $13.23
Weighted average common stock outstanding – diluted2,208,658 2,831,617 2,733,747 2,853,751


Altisource Asset Management Corporation
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
September 30, 2015
(Unaudited)
December 31, 2014
Assets:
Real estate held for use:
Land (from consolidated VIE)$49,518 $14,424
Rental residential properties (net of accumulated depreciation of $5,048 and $1,062, respectively - from consolidated VIE)200,136 60,908
Real estate owned (from consolidated VIE)567,228 457,045
Total real estate held for use, net816,882 532,377
Real estate assets held for sale (from consolidated VIE)133,154 92,230
Mortgage loans at fair value (from consolidated VIE)1,380,575 1,959,044
Mortgage loans held for sale (from consolidated VIE)254,835 12,535
Cash and cash equivalents (including from consolidated VIE $83,881 and $66,166, respectively)152,634 116,782
Restricted cash (from consolidated VIE)25,511 13,282
Accounts receivable (including from consolidated VIE $35,507 and $10,313, respectively)35,514 11,068
Related party receivables (from consolidated VIE) 17,491
Deferred leasing and financing costs, net (from consolidated VIE)9,806 4,251
Prepaid expenses and other assets (including from consolidated VIE $395 and $373, respectively)1,790 1,638
Total assets$2,810,701 $2,760,698
Liabilities:
Repurchase and loan and security agreements (from consolidated VIE)$929,478 $1,015,000
Other secured borrowings (from consolidated VIE)513,049 324,082
Accounts payable and accrued liabilities (including from consolidated VIE $63,871 and $11,678, respectively)68,585 16,726
Related party payables (including from consolidated VIE $0 and $4,879, respectively) 6,169
Total liabilities1,511,112 1,361,977
Commitments and contingencies
Redeemable preferred stock:
Preferred stock, $0.01 par value, 250,000 shares issued and outstanding as of September 30, 2015 and December 31, 2014; redemption value $250,000249,082 248,927
Equity:
Common stock, $.01 par value, 5,000,000 authorized shares; 2,515,697 and 2,213,222 shares issued and outstanding, respectively, as of September 30, 2015 and 2,452,101 and 2,188,136 shares issued and outstanding, respectively, as of December 31, 201425 25
Additional paid-in capital20,977 14,152
Retained earnings59,670 54,174
Treasury stock, at cost, 302,475 shares as of September 30, 2015 and 263,965 shares as of December 31, 2014(252,072) (245,468)
Total stockholders' equity (deficit)(171,400) (177,117)
Noncontrolling interest in consolidated affiliate1,221,907 1,326,911
Total equity1,050,507 1,149,794
Total liabilities and equity$2,810,701 $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 September 30, 2015
(In thousands)
Residential
(GAAP)
NewSource
Stand-alone
(Non-GAAP)
AAMC
Stand-alone

(Non-GAAP)
Consolidating
Entries
AAMC
Consolidated
(GAAP)
Revenues:
Rental revenues$4,021 $ $ $ $4,021
Net unrealized gain on mortgage loans27,499 27,499
Net realized gain on mortgage loans12,874 12,874
Net realized gain on mortgage loans held for sale100 100
Net realized gain on real estate13,914 13,914
Interest income115 242 (242)115
Conversion fee 329 (329)
Base management fee 4,869 (4,869)
Total revenues58,523 242 5,198 (5,440)58,523
Expenses:
Residential property operating expenses16,574 16,574
Real estate depreciation and amortization2,050 2,050
Real estate and mortgage loan selling costs and impairment10,705 10,705
Mortgage loan servicing costs13,477 13,477
Interest expense14,436 (242)14,194
General and administrative3,147 40 5,748 8,935
Related party general and administrative4,988 210 (5,198)
Total expenses65,377 250 5,748 (5,440)65,935
Other income1,518 178 (1,696)
Loss before income taxes(5,336)(8)(372)(1,696)(7,412)
Income tax expense (benefit)27 (124) (97)
Net loss(5,363)(8)(248)(1,696)(7,315)
Net loss attributable to noncontrolling interest in consolidated affiliate 5,335 5,335
Net loss attributable to common stockholders$(5,363)$(8)$(248)$3,639 $(1,980)


Altisource Asset Management Corporation
Consolidating Statement of Operations
Nine months ended September 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$7,561 $ $ $ $7,561
Net unrealized gain on mortgage loans130,842 130,842
Net realized gain on mortgage loans47,528 47,528
Net realized gain on mortgage loans held for sale505 505
Net realized gain on real estate36,926 36,926
Interest income595 563 (563)595
Conversion fee 728 (728)
Base management fee 10,041 (10,041)
Incentive management fee 14,900 (14,900)
Expense reimbursements 750 (750)
Total revenues223,957 563 26,419 (26,982)223,957
Expenses:
Residential property operating expenses45,890 45,890
Real estate depreciation and amortization4,392 4,392
Real estate and mortgage loan selling costs and impairment34,235 34,235
Mortgage loan servicing costs47,989 47,989
Interest expense39,477 (563)38,914
General and administrative9,497 158 16,810 26,465
Related party general and administrative25,789 630 2,000 (28,419)
Total expenses207,269 788 18,810 (28,982)197,885
Other income3,518 178 (3,696)
Income (loss) before income taxes20,206 (225)7,787 (1,696)26,072
Income tax expense53 187 240
Net income (loss)20,153 (225)7,600 (1,696)25,832
Net income attributable to noncontrolling interest in consolidated affiliate (20,181)(20,181)
Net income (loss) attributable to common stockholders$20,153 $(225)$7,600 $(21,877)$5,651


Altisource Asset Management Corporation
Consolidating Statement of Operations
Three months ended September 30, 2014
(In thousands)
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 loans88,726 88,726
Net realized gain on mortgage loans13,727 13,727
Net realized gain on mortgage loans held for sale302 302
Net realized gain on real estate3,310 3,310
Interest income2,568 2,568
Base management fee 210 (210)
Incentive management fee 19,503 (19,503)
Expense reimbursements 1,591 (1,591)
Total revenues109,102 21,304 (21,304)109,102
Expenses:
Residential property operating expenses9,247 9,247
Real estate depreciation and amortization313 313
Real estate selling costs and impairment5,542 5,542
Mortgage loan servicing costs21,226 21,226
Interest expense11,699 11,699
General and administrative1,819 286 3,330 5,435
Related party general and administrative21,530 210 563 (21,304)999
Total expenses71,376 496 3,893 (21,304)54,461
Other income 1,586 1,586
Income before income taxes37,726 1,090 17,411 56,227
Income tax expense50 803 853
Net income37,676 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)
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 loans258,898 258,898
Net realized gain on mortgage loans33,867 33,867
Net realized gain on mortgage loans held for sale302 302
Net realized gain on real estate4,544 4,544
Interest income2,757 2,757
Base management fee 731 (731)
Incentive management fee 44,129 (44,129)
Expense reimbursements 4,849 (4,849)
Total revenues301,087 49,709 (49,709)301,087
Expenses:
Residential property operating expenses13,550 13,550
Real estate depreciation and amortization464 464
Real estate selling costs and impairment8,775 8,775
Mortgage loan servicing costs49,588 49,588
Interest expense24,352 24,352
General and administrative5,665 381 9,532 15,578
Related party general and administrative51,629 731 1,946 (49,709)4,597
Total expenses154,023 1,112 11,478 (49,709)116,904
Other income383 1,985 4 2,372
Income before income taxes147,447 873 38,235 186,555
Income tax expense76 1,352 1,428
Net income147,371 873 36,883 185,127
Net income attributable to noncontrolling interest in consolidated affiliate (147,371)(147,371)
Net income attributable to common stockholders$147,371 $873 $36,883 $(147,371)$37,756


Altisource Asset Management Corporation
Consolidating Balance Sheet
September 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$49,518 $ $ $ $49,518
Rental residential properties, net200,136 200,136
Real estate owned567,228 567,228
Total real estate held for use, net816,882 816,882
Real estate assets held for sale133,154 133,154
Mortgage loans at fair value1,380,575 1,380,575
Mortgage loans held for sale254,835 254,835
Cash and cash equivalents83,881 6,189 62,564 152,634
Restricted cash25,511 25,511
Accounts receivable35,507 7 35,514
Related party receivables 6,701 (6,701)
Investment in affiliate 12,007 (12,007)
Deferred leasing and financing costs, net9,806 9,806
Prepaid expenses and other assets395 37 1,349 9 1,790
Total assets$2,740,546 $6,226 $82,628 $(18,699)$2,810,701
Liabilities:
Repurchase agreements$929,478 $ $ $ $929,478
Other secured borrowings513,049 513,049
Accounts payable and accrued liabilities63,871 1,573 3,141 68,585
Related party payables5,126 1,571 3 (6,700)
Total liabilities1,511,524 3,144 3,144 (6,700)1,511,112
Commitments and contingencies
Redeemable preferred stock 249,082 249,082
Equity:
Common stock572 25 (572)25
Additional paid-in capital1,227,334 7,000 18,663 (1,232,020)20,977
Retained earnings (accumulated deficit)21,099 (3,918)63,786 (21,297)59,670
Treasury stock(19,983) (252,072)19,983 (252,072)
Total stockholders' equity (deficit)1,229,022 3,082 (169,598)(1,233,906)(171,400)
Noncontrolling interest in consolidated affiliate 1,221,907 1,221,907
Total equity (deficit)1,229,022 3,082 (169,598)(11,999)1,050,507
Total liabilities and equity$2,740,546 $6,226 $82,628 $(18,699)$2,810,701


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' 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


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