UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 7, 2015
ALTISOURCE ASSET MANAGEMENT CORPORATION
(Exact name of Registrant as specified in its charter)
United States Virgin Islands | 000-54809 | 66-0783125 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||
36C Strand Street
Christiansted, United States Virgin Islands 00820
(Address of principal executive offices including zip code)
(340) 692-1055
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On May 7, 2015, Altisource Asset Management Corporation issued a press release announcing financial results for its quarter ended March 31, 2015. A copy of the press release is attached hereto as Exhibit 99.1.
The information in this Item 2.02, including the information in Exhibit 99.1, is furnished solely pursuant to Item 2.02 of this Form 8-K. Consequently, it is not deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that Section. It may only be incorporated by reference in another filing under the
Securities Exchange Act of 1934 or Securities Act of 1933 if such subsequent filing specifically references this Item 2.02 of this Form 8-K.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
Exhibit No. | Description | |
Exhibit 99.1 | Press Release of Altisource Asset Management Corporation dated May 7, 2015 | |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Altisource Asset Management Corporation | ||
May 7, 2015 | By: | /s/ Stephen H. Gray |
Stephen H. Gray General Counsel and Secretary | ||
Exhibit 99.1
FOR IMMEDIATE RELEASE | |
FOR FURTHER INFORMATION CONTACT: Robin N. Lowe Chief Financial Officer T: 345-815-9919 E: Robin.Lowe@AltisourceAMC.com | |
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 (GAAP) | NewSource Stand-alone (Non-GAAP) | AAMC Stand-alone (Non-GAAP) | Consolidating Entries | AAMC Consolidated (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 (GAAP) | NewSource Stand-alone (Non-GAAP) | AAMC Stand-alone (Non-GAAP) | Consolidating Entries | AAMC Consolidated (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 (GAAP) | NewSource stand-alone (Non-GAAP) | AAMC Stand-alone (Non-GAAP) | Consolidating Entries | AAMC Consolidated (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 (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, 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 | ||||