August 10, 2015

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


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