EX-99.1 2 a991aamc4q2016earn.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1

a991aamc2015earn_image1a01.jpg

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

Altisource Asset Management Corporation Reports Fourth Quarter and Full Year 2016 Results;
Continues to Successfully Deliver on RESI's Strategic Objectives

CHRISTIANSTED, U.S. Virgin Islands, March 1, 2017 (GLOBE NEWSWIRE) - Altisource Asset Management Corporation (“AAMC” or the “Company”) (NYSE MKT: AAMC) today announced financial and operating results for the fourth quarter and full year of 2016.

Fourth Quarter 2016 Highlights and Recent Developments

•
Negotiated a non-binding letter of intent for Altisource Residential Corporation (“RESI”) to purchase up to 3,500 rental homes with seller financing from two entities sponsored by Amherst Holdings, LLC, with the first closing expected to occur in the first quarter of 2017.1 
•
Successfully integrated RESI's recently purchased portfolio of 4,262 rental properties into its growing single-family rental business.
•
Managed an increase of RESI's fourth quarter 2016 rental revenue by 154% over the third quarter to $24.3 million.
•
Facilitated RESI's agreements for the sale of two loan portfolios sales totaling 2,940 mortgage loans with an unpaid principal balance (“UPB”) of $694.7 million for estimated proceeds of approximately 97% of RESI's September 30, 2016 balance sheet carrying value. Upon completion, the sales are expected to represent the divestiture by RESI of substantially all of its mortgage loan portfolio.2 
•
Managed RESI's sale of 468 non-rental REO properties.
•
Completed repurchases of $4.2 million of AAMC common stock, bringing total repurchases under AAMC's repurchase program to $260.5 million.

Full Year 2016 Highlights

•
Increased RESI's rental portfolio by 215% to 8,603 homes as of December 31, 2016 from 2,732 properties as of December 31, 2015.
•
Increased RESI's rental revenue by 267% over the 2015 fiscal year to $48.6 million.
•
Diversified the RESI's property management services, adding Main Street Renewal, LLC as an additional nationwide property manager for a large portion of RESI's single-family rental portfolio.
•
Reduced RESI's mortgage loan portfolio by 54% from 7,036 loans with an aggregate UPB of $1.8 billion at December 31, 2015 to 3,474 loans with an aggregate UPB of $823.3 million at December 31, 2016.
•
Assisted RESI in the sale of 2,668 non-rental REO properties compared to the 1,321 REO properties sold in 2015.
•
Facilitated RESI's continued optimization of its funding with longer term financing and higher advance rates.

________________
1 
Transaction is subject to negotiation of definitive transaction agreements and RESI's completion of due diligence.
2 
First sale closed in January 2017. Second sale is subject to negotiation of definitive purchase agreement and buyer's completion of due diligence.





“Over the past year, we generated substantial growth for RESI’s SFR portfolio, ensured the continued improvement of RESI’s rental operating metrics and managed RESI’s divestiture of legacy loan and REO assets in favor of productive single-family rental properties,” stated Chief Executive Officer George Ellison. “Our long-term view remains that AAMC’s ultimate success and profitability will be directly attributable to our continued success in executing on RESI's stated business objectives.”

Fourth Quarter and Full Year 2016 Financial Results

Net loss attributable to stockholders for the fourth quarter of 2016 totaled $1.7 million, or $1.09 per diluted share, compared to net loss attributable to stockholders of $8.9 million, or $4.12 per diluted share, for the fourth quarter of 2015. Net loss attributable to stockholders for the year ended December 31, 2016 totaled $4.9 million, or $2.93 per diluted share, compared to net loss attributable to stockholders of $3.3 million, or $1.59 per diluted share, for the year ended December 31, 2015.

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. 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 RESI's ability to compete; RESI’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 itself or RESI; RESI’s ability to sell residential mortgage assets on favorable terms or at all; AAMC's ability to identify and acquire assets for RESI’s portfolio; RESI’s ability to complete potential transactions in accordance with anticipated terms and on a timely basis or at all; Altisource Portfolio Solutions S.A. and its affiliates’ ability to effectively perform its obligations under various agreements with RESI; the failure of Main Street Renewal, LLC to effectively perform under its property management agreement with RESI; 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. The foregoing list of factors should not be construed as exhaustive.


The statements made in this press release are current as of the date of this press release only. The Company undertakes no obligation to publicly update or revise any forward-looking statements or any other information contained herein, whether as a result of new information, future events or otherwise.






Altisource Asset Management Corporation
Consolidated Statements of Operations
(In thousands, except share and per share amounts)
 
Three months ended December 31, 2016
 
Three months ended December 31, 2015
 
Year ended December 31, 2016
 
Year ended December 31, 2015
Revenues:
 
 
 
 
 
 
 
Management fees from RESI
$
4,496

 
$
—

 
$
17,334

 
$
—

Conversion fees from RESI
445

 
—

 
1,841

 
—

Expense reimbursements from RESI
263

 
—

 
816

 
—

Rental revenues
—

 
5,672

 
—

 
13,233

Change in unrealized gain on mortgage loans
—

 
(42,013
)
 
—

 
88,829

Net realized gain on mortgage loans
—

 
10,533

 
—

 
58,061

Net realized gain on mortgage loans held for sale
—

 
35,927

 
—

 
36,432

Net realized gain on real estate
—

 
14,006

 
—

 
50,932

Interest income
—

 
17

 
—

 
612

Total revenues
5,204

 
24,142

 
19,991

 
248,099

Expenses:
 
 
 
 
 
 
 
Salaries and employee benefits
4,315

 
5,085

 
17,369

 
16,294

Legal and professional fees
670

 
1,287

 
2,173

 
11,311

Residential property operating expenses
—

 
20,376

 
—

 
66,266

Real estate depreciation and amortization
—

 
3,080

 
—

 
7,472

Selling costs and impairment
—

 
37,995

 
—

 
72,230

Mortgage loan servicing costs
—

 
14,357

 
—

 
62,346

Interest expense
—

 
14,217

 
—

 
53,131

General and administrative
1,429

 
2,351

 
4,772

 
7,583

Total expenses
6,414

 
98,748

 
24,314

 
296,633

Other income:
 
 
 
 
 
 
 
Dividend income on RESI common stock
243

 
—

 
1,023

 
—

Other income
7

 
—

 
71

 
—

Total other income
250

 
—

 
1,094

 
—

Loss before income taxes
(960
)
 
(74,606
)
 
(3,229
)
 
(48,534
)
Income tax expense
703

 
114

 
1,706

 
354

Net loss
(1,663
)
 
(74,720
)
 
(4,935
)
 
(48,888
)
Net loss attributable to non-controlling interest in consolidated affiliate
—

 
65,779

 
—

 
45,598

Net loss attributable to stockholders
$
(1,663
)
 
$
(8,941
)
 
$
(4,935
)
 
$
(3,290
)
 
 
 
 
 
 
 
 
Loss per share of common stock – basic:
 
 
 
 
 
 
 
Loss per basic share
$
(1.09
)
 
$
(4.12
)
 
$
(2.93
)
 
$
(1.59
)
Weighted average common stock outstanding – basic
1,568,637

 
2,180,167

 
1,752,302

 
2,202,815

Loss per share of common stock – diluted:
 
 
 
 
 
 
 
Loss per diluted share
$
(1.09
)
 
$
(4.12
)
 
$
(2.93
)
 
$
(1.59
)
Weighted average common stock outstanding – diluted
1,568,637

 
2,180,167

 
1,752,302

 
2,202,815






Altisource Asset Management Corporation
Consolidated Balance Sheets
(In thousands, except share and per share amounts)

 
December 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)
40,584

 
184,544

Restricted cash (from previously consolidated VIE as of December 31, 2015)
—

 
20,566

Available-for-sale securities (RESI common stock)
17,934

 
—

Accounts receivable, net (including $45,903 from previously consolidated VIE as of December 31, 2015)
—

 
46,026

Related party receivables
5,266

 
—

Prepaid expenses and other assets (including $1,126 from consolidated VIE as of December 31, 2015)
1,964

 
3,169

Total assets
$
65,748

 
$
2,518,601

Liabilities:
 
 
 
Repurchase and loan 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 benefits
4,100

 
4,006

Accounts payable and accrued liabilities (including $32,448 from previously consolidated VIE as of December 31, 2015)
4,587

 
34,716

Total liabilities
8,687

 
1,304,690

Commitments and contingencies
—

 
—

Redeemable preferred stock:
 
 
 
Preferred stock, $0.01 par value, 250,000 shares issued and outstanding as of December 31, 2016 and 2015; redemption value $250,000
249,340

 
249,133

Stockholders' (deficit) equity:
 
 
 
Common stock, $.01 par value, 5,000,000 authorized shares; 2,637,629 and 1,513,912 shares issued and outstanding, respectively, as of December 31, 2016 and 2,556,828 and 2,048,223 shares issued and outstanding, respectively, as of December 31, 2015
26

 
26

Additional paid-in capital
30,696

 
23,419

Retained earnings
46,145

 
50,678

Accumulated other comprehensive loss
(2,662
)
 
—

Treasury stock, at cost, 1,123,717 and 508,605 shares as of December 31, 2016 and 2015, respectively
(266,484
)
 
(254,984
)
Total stockholders' deficit
(192,279
)
 
(180,861
)
Non-controlling interest in consolidated affiliate
—

 
1,145,639

Total (deficit) equity
(192,279
)
 
964,778

Total liabilities and equity
$
65,748

 
$
2,518,601






Summary Management Reporting Information

Prior to our deconsolidation of RESI, we evaluated the operations of AAMC on a stand-alone basis in addition to evaluating our consolidated financial performance, which included the results of RESI and NewSource under U.S. GAAP. In evaluating our operating performance and managing our business under the Original AMA, we considered the incentive management fees and reimbursement of expenses paid to us by RESI as well as our stand-alone operating expenses. We maintained our internal management reporting on this basis. The following tables present our consolidating balance sheets and statements of operations, which are reconciled to U.S. GAAP. Accordingly, the entries necessary to consolidate AAMC's subsidiaries, including, but not limited to, elimination of investment in subsidiaries, elimination of intercompany receivables and payables, elimination of fees paid under the asset management agreement and reimbursed expenses, are reflected in the Consolidating Entries column.


Upon our adoption of ASU 2015-02, we are no longer required to consolidate the results of RESI. Therefore, we do not present the table for the current period.


The following tables include non-GAAP performance measures that we believe are useful to assist investors in gaining an understanding of the trends and operating results for our business on a stand-alone basis. This information should be considered in addition to, and not as a substitute for, our financial results determined in accordance with U.S. GAAP.





Altisource Asset Management Corporation
Consolidating Statement of Operations
Three months ended December 31, 2015
(In thousands, unaudited)

 
 RESI (GAAP)
 
NewSource Stand-alone (Non-GAAP)
 
 AAMC Stand-alone
(Non-GAAP)
 
 Consolidating Entries
 
 AAMC Consolidated (GAAP)
Revenues:
 
 
 
 
 
 
 
 
 
Management fees
$
—

 
$
—

 
$
4,524

 
$
(4,524
)
 
$
—

Incentive management fee
—

 
—

 
(6,906
)
 
6,906

 
—

Conversion fees
—

 
—

 
309

 
(309
)
 
—

Rental revenues
5,672

 
—

 
—

 
—

 
5,672

Change in unrealized gain on mortgage loans
(42,013
)
 
—

 
—

 
—

 
(42,013
)
Net realized gain on mortgage loans
10,533

 
—

 
—

 
—

 
10,533

Net realized gain on mortgage loans held for sale
35,927

 
—

 
—

 
—

 
35,927

Net realized gain on real estate
14,006

 
—

 
—

 
—

 
14,006

Interest income
16

 
1

 
—

 
—

 
17

Total revenues
24,141

 
1

 
(2,073
)
 
2,073

 
24,142

Expenses:
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
—

 
—

 
5,085

 
—

 
5,085

Legal and professional fees
978

 
41

 
268

 
—

 
1,287

Residential property operating expenses
20,376

 
—

 
—

 
—

 
20,376

Real estate depreciation and amortization
3,080

 
—

 
—

 
—

 
3,080

Selling costs and impairment
37,995

 
—

 
—

 
—

 
37,995

Mortgage loan servicing costs
14,357

 
—

 
—

 
—

 
14,357

Interest expense
14,217

 
—

 
—

 
—

 
14,217

General and administrative
1,356

 
—

 
995

 
—

 
2,351

Management fees, net of reimbursements
(2,073
)
 
—

 
—

 
2,073

 
—

Total expenses
90,286

 
41

 
6,348

 
2,073

 
98,748

Other income:
 
 
 
 
 
 
 
 
 
Dividend income
—

 
—

 
33

 
(33
)
 
—

Total other income
—

 
—

 
33

 
(33
)
 
—

Loss before income taxes
(66,145
)
 
(40
)
 
(8,388
)
 
(33
)
 
(74,606
)
Income tax expense
13

 
—

 
101

 
—

 
114

Net loss
(66,158
)
 
(40
)
 
(8,489
)
 
(33
)
 
(74,720
)
Net loss attributable to non-controlling interest in consolidated affiliate
—

 
—

 
—

 
65,779

 
65,779

Net loss attributable to stockholders
$
(66,158
)
 
$
(40
)
 
$
(8,489
)
 
$
65,746

 
$
(8,941
)





Altisource Asset Management Corporation
Consolidating Statement of Operations
Year ended December 31, 2015
(In thousands, unaudited)

 
 RESI (GAAP)
 
NewSource Stand-alone (Non-GAAP)
 
 AAMC Stand-alone
(Non-GAAP)
 
 Consolidating Entries
 
 AAMC Consolidated (GAAP)
Revenues:
 
 
 
 
 
 
 
 
 
Management fees
$
—

 
$
—

 
$
14,565

 
$
(14,565
)
 
$
—

Incentive management fee
—

 
—

 
7,994

 
(7,994
)
 
—

Conversion fees
—

 
—

 
1,037

 
(1,037
)
 
—

Expense reimbursements
—

 
—

 
750

 
(750
)
 
—

Rental revenues
13,233

 
—

 
—

 
—

 
13,233

Change in unrealized gain on mortgage loans
88,829

 
—

 
—

 
—

 
88,829

Net realized gain on mortgage loans
58,061

 
—

 
—

 
—

 
58,061

Net realized gain on mortgage loans held for sale
36,432

 
—

 
—

 
—

 
36,432

Net realized gain on real estate
50,932

 
—

 
—

 
—

 
50,932

Interest income
611

 
564

 
—

 
(563
)
 
612

Total revenues
248,098

 
564

 
24,346

 
(24,909
)
 
248,099

Expenses:
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
—

 
—

 
16,294

 
—

 
16,294

Legal and professional fees
6,480

 
199

 
6,632

 
(2,000
)
 
11,311

Residential property operating expenses
66,266

 
—

 
—

 
—

 
66,266

Real estate depreciation and amortization
7,472

 
—

 
—

 
—

 
7,472

Selling costs and impairment
72,230

 
—

 
—

 
—

 
72,230

Mortgage loan servicing costs
62,346

 
—

 
—

 
—

 
62,346

Interest expense
53,694

 
—

 
—

 
(563
)
 
53,131

General and administrative
6,101

 
—

 
2,232

 
(750
)
 
7,583

Management fees
22,966

 
630

 
—

 
(23,596
)
 
—

Total expenses
297,555

 
829

 
25,158

 
(26,909
)
 
296,633

Other income:
 
 
 
 
 
 
 
 
 
Dividend income
1,518

 
—

 
211

 
(1,729
)
 
—

Other income
2,000

 
—

 
—

 
(2,000
)
 
—

Total other income
3,518

 
—

 
211

 
(3,729
)
 
—

Loss before income taxes
(45,939
)
 
(265
)
 
(601
)
 
(1,729
)
 
(48,534
)
Income tax expense
66

 
—

 
288

 
—

 
354

Net loss
(46,005
)
 
(265
)
 
(889
)
 
(1,729
)
 
(48,888
)
Net loss attributable to non-controlling interest in consolidated affiliate
—

 
—

 
—

 
45,598

 
45,598

Net loss attributable to stockholders
$
(46,005
)
 
$
(265
)
 
$
(889
)
 
$
43,869

 
$
(3,290
)





Altisource Asset Management Corporation
Consolidating Balance Sheet
December 31, 2015
(In thousands, unaudited)

 
 RESI (GAAP)
 
NewSource stand-alone (non-GAAP)
 
 AAMC Stand-alone
(Non-GAAP)
 
 Consolidating Entries
 
 AAMC Consolidated (GAAP)
Assets:
 
 
 
 
 
 
 
 
 
Real estate held for use:
 
 
 
 
 
 
 
 
 
Land
$
56,346

 
$
—

 
$
—

 
$
—

 
$
56,346

Rental residential properties, net
224,040

 
—

 
—

 
—

 
224,040

Real estate owned
455,483

 
—

 
—

 
—

 
455,483

Total real estate held for use, net
735,869

 
—

 
—

 
—

 
735,869

Real estate assets held for sale
250,557

 
—

 
—

 
—

 
250,557

Mortgage loans at fair value
960,534

 
—

 
—

 
—

 
960,534

Mortgage loans held for sale
317,336

 
—

 
—

 
—

 
317,336

Cash and cash equivalents
116,702

 
4,583

 
63,259

 
—

 
184,544

Restricted cash
20,566

 
—

 
—

 
—

 
20,566

Accounts receivable, net
45,903

 
—

 
123

 
—

 
46,026

Related party receivables
2,180

 
—

 
—

 
(2,180
)
 
—

Investment in affiliate
—

 
—

 
12,007

 
(12,007
)
 
—

Prepaid expenses and other assets
1,126

 
5

 
2,028

 
10

 
3,169

Total assets
$
2,450,773

 
$
4,588

 
$
77,417

 
$
(14,177
)
 
$
2,518,601

Liabilities:
 
 
 
 
 
 
 
 
 
Repurchase and loan agreements
$
763,369

 
$
—

 
$
—

 
$
—

 
$
763,369

Other secured borrowings
502,599

 
—

 
—

 
—

 
502,599

Accrued salaries and employee benefits
—

 
—

 
4,006

 
—

 
4,006

Accounts payable and accrued liabilities
32,448

 
1,546

 
722

 
—

 
34,716

Related party payables
—

 
—

 
2,180

 
(2,180
)
 
—

Total liabilities
1,298,416

 
1,546

 
6,908

 
(2,180
)
 
1,304,690

Commitments and contingencies
—

 
—

 
—

 
—

 
—

Redeemable preferred stock
—

 
—

 
249,133

 
—

 
249,133

Stockholders' equity (deficit):
 
 
 
 
 
 
 
 
 
Common stock
556

 
—

 
26

 
(556
)
 
26

Additional paid-in capital
1,202,418

 
7,000

 
21,089

 
(1,207,088
)
 
23,419

(Accumulated deficit) retained earnings
(50,617
)
 
(3,958
)
 
55,245

 
50,008

 
50,678

Treasury stock
—

 
—

 
(254,984
)
 
—

 
(254,984
)
Total stockholders' equity (deficit)
1,152,357

 
3,042

 
(178,624
)
 
(1,157,636
)
 
(180,861
)
Non-controlling interest in consolidated affiliate
—

 
—

 
—

 
1,145,639

 
1,145,639

Total equity (deficit)
1,152,357

 
3,042

 
(178,624
)
 
(11,997
)
 
964,778

Total liabilities and equity
$
2,450,773

 
$
4,588

 
$
77,417

 
$
(14,177
)
 
$
2,518,601