May 9, 2016

Altisource Asset Management Corporation Reports First Quarter 2016 Results

CHRISTIANSTED, U.S. Virgin Islands, May 09, 2016 (GLOBE NEWSWIRE) -- Altisource Asset Management Corporation ("AAMC" or the "Company") (NYSE MKT:AAMC) today reported financial and operating results for the first quarter of 2016.

First Quarter 2016 Highlights

  • Increased rental portfolio of Altisource Residential Corporation ("Residential") during the quarter by 29% to 3,531 homes, including 2,720 rented properties, 265 listed and ready for rent and 546 properties under leasehold renovation and unit turn.
    • Consummated Residential's acquisition of 590 single-family rental ("SFR") properties.
  • Facilitated Residential's completed sale of 1,078 non-performing loans ("NPLs") in March 2016 within approximately 1% of the balance sheet carrying value.
  • Negotiated the increase and extension of Residential's repurchase and lending facilities with key lenders:
    • Increased its repurchase facility with Credit Suisse from $275.0 million to $350.0 million on March 30, 2016.
    • Negotiated an increase of its loan facility with Nomura from $200.0 million to $250.0 million, which closed on April 7, 2016.
  • Managed Residential's sale of an aggregate of 686 real estate owned ("REO") properties, representing an increase of 76% over the 389 REO properties sold by Residential in the fourth quarter of 2015.
  • Facilitated Residential's generation of estimated taxable income of $16.9 million, or $0.30 per share, resulting in the declaration by Residential of a $0.15 per share first quarter dividend.
  • Completed $2.3 million of AAMC stock buybacks, bringing total buybacks under AAMC's repurchase program to $251.4 million.

"In the first quarter of 2016, we continued to make strong progress on the execution of Residential's business strategy to build a substantial SFR portfolio," stated Chief Executive Officer George G. Ellison. "Although our asset management fees have been lower under the New AMA, our execution of Residential's strategy has resulted in the growth of its high yielding rental properties to a level that is beneficial to both Residential and AAMC. We continue to believe the amended fee structure under the New AMA promotes the long-term stability of our client, further aligns our incentives with Residential's mission to become one of the preeminent single-family rental companies in the industry and, most importantly, better positions both Residential and AAMC to provide long-term value to their respective shareholders. We are focused on continuing to grow Residential the right way, which should enable Residential to achieve the level of returns that will also positively impact AAMC's financial performance."

First Quarter 2016 Financial Results

Net loss attributable to stockholders for the first quarter of 2016 totaled $940,000, or $0.50 per diluted share, compared to net income attributable to stockholders of $6.9 million, or $2.50 per diluted share, for the first quarter of 2015 and net loss attributable to stockholders of $8.9 million, or $4.12 per share, for the fourth quarter of 2015.

Webcast and Conference Call

The Company expects to host a webcast and conference call on Monday, May 9, 2016, at 10:00 a.m. Eastern Time to discuss its financial results for the first quarter 2016. 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. Residential 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; AAMC's and Residential's ability to compete; Residential's ability to implement its business plan; general economic and market conditions; governmental regulations, taxes and policies; AAMC's ability to generate adequate and timely sources of liquidity and financing for Residential; Residential's ability to sell residential mortgage assets on favorable terms; AAMC's ability to identify and acquire assets for Residential's portfolio; Altisource Portfolio Solutions' ability to effectively perform its obligations under various agreements with Residential; and other risks and uncertainties detailed in the "Risk Factors" and other sections described from time to time in the Company's current and future filings with the Securities and Exchange Commission.

Presented below are the Company's consolidated statements of operations for the three months ended March 31, 2016 and 2015 and the consolidated balance sheets as of March 31, 2016 and December 31, 2015. On January 1, 2016, the Company adopted revised accounting guidance related to consolidation. As a result, the Company no longer consolidates the financial information of Residential in its consolidated financial statements effective January 1, 2016. Due to the significance of Residential's consolidated financial statements to the Company's historical consolidated financial statements in periods prior to January 1, 2016, the Company's consolidated financial statements have limited comparability with the Company's consolidated financial statements in prior periods.

 
Altisource Asset Management Corporation
Consolidated Statements of Operations
(In thousands, except share and per share amounts)
 
 Three months
ended March 31,
2016
 Three months
ended March 31,
2015
Revenues:   
Management fees$4,124  $ 
Conversion fees402   
Rental revenues  1,400 
Net unrealized gain on mortgage loans  61,134 
Net realized gain on mortgage loans  15,382 
Net realized gain on mortgage loans held for sale  151 
Net realized gain on real estate  10,608 
Interest and dividend income294  240 
Total revenues4,820  88,915 
Expenses:   
Salaries and employee benefits2,348  1,633 
Equity-based compensation2,368  946 
Legal and professional fees541  7,533 
Residential property operating expenses  12,459 
Real estate depreciation and amortization  998 
Selling costs and impairment  14,691 
Mortgage loan servicing costs  18,266 
Interest expense  11,483 
General and administrative514  1,451 
Total expenses5,771  69,460 
(Loss) income before income taxes(951) 19,455 
Income tax (benefit) expense(11) 143 
Net (loss) income(940) 19,312 
Net income attributable to noncontrolling interest in consolidated affiliate  (12,424)
Net (loss) income attributable to common stockholders$(940) $6,888 
    
(Loss) earnings per share of common stock — basic:   
(Loss) earnings per basic share$(0.50) $3.10 
Weighted average common stock outstanding — basic1,990,153  2,203,699 
    
(Loss) earnings per share of common stock — diluted:   
(Loss) earnings per diluted share$(0.50) $2.50 
Weighted average common stock outstanding — diluted1,990,153  2,757,206 



 
Altisource Asset Management Corporation
Consolidated Balance Sheets
(In thousands)
 
 March 31, 2016 December 31, 2015
Assets:   
Real estate held for use:   
Land (from previously consolidated VIE as of December 31, 2015)$  $56,346 
Rental residential properties (net of accumulated depreciation of $7,127 as of December 31, 2015 - from previously consolidated VIE)  224,040 
Real estate owned (from previously consolidated VIE as of December 31, 2015)  455,483 
Total real estate held for use, net  735,869 
Real estate assets held for sale (from previously consolidated VIE as of December 31, 2015)  250,557 
Mortgage loans at fair value (from previously consolidated VIE as of December 31, 2015)  960,534 
Mortgage loans held for sale (from previously consolidated VIE as of December 31, 2015)  317,336 
Cash and cash equivalents (including $116,702 from previously consolidated VIE as of December 31, 2015)41,646  184,544 
Restricted cash (from previously consolidated VIE as of December 31, 2015)  20,566 
Available-for-sale securities19,494   
Accounts receivable, net (including $45,903 from previously consolidated VIE as of December 31, 2015)  46,026 
Related party receivables4,676   
Prepaid expenses and other assets (including $1,126 from previously consolidated as of December 31, 2015)2,319  3,169 
Total assets$68,135  $2,518,601 
Liabilities:   
Repurchase and loan and security agreements (from previously consolidated VIE as of December 31, 2015)$  $763,369 
Other secured borrowings (from previously consolidated VIE as of December 31, 2015)  502,599 
Accrued salaries and employee benefits1,200  4,006 
Accounts payable and other accrued liabilities (including $32,448 from previously consolidated VIE as of December 31, 2015)2,173  34,716 
Related party payables214   
Total liabilities3,587  1,304,690 
Commitments and contingencies   
Redeemable preferred stock:   
Preferred stock, $0.01 par value, 250,000 shares issued and outstanding as of March 31, 2016 and December 31, 2015; redemption value $250,000249,185  249,133 
Equity:   
Common stock, $.01 par value, 5,000,000 authorized shares; 2,569,780 and 1,901,092 shares issued and outstanding, respectively, as of March 31, 2016 and 2,556,828 and 2,048,223 shares issued and outstanding, respectively, as of December 31, 201526  26 
Additional paid-in capital23,463  23,419 
Retained earnings50,295  50,678 
Accumulated other comprehensive loss(1,102)  
Treasury stock, at cost, 668,688 shares as of March 31, 2016 and 508,605 shares as of December 31, 2015(257,319) (254,984)
Total stockholders' deficit(184,637) (180,861)
Noncontrolling interest in consolidated affiliate  1,145,639 
Total equity(184,637) 964,778 
Total liabilities and equity$68,135  $2,518,601 

 

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


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