UNITED STATES VIRGIN ISLANDS | 66-0783125 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large Accelerated Filer | o | Accelerated Filer | o | |
Non-Accelerated Filer | x | (Do not check if a smaller reporting company) | Smaller Reporting Company | o |
Emerging Growth Company | o |
• | our ability to implement our business strategy and the business strategy of RESI; |
• | our ability to retain RESI as a client; |
• | our ability to retain and maintain our strategic relationships; |
• | the ability of RESI to generate a return on invested capital in excess of applicable hurdle rates under our management; |
• | our ability to obtain additional asset management clients; |
• | our ability to effectively compete with our competitors; |
• | RESI's ability to complete future or pending transactions; |
• | the failure of service providers to effectively perform their obligations under their agreements with us and RESI; |
• | the failure of RESI’s servicers to effectively perform their services to RESI; |
• | general economic and market conditions; and |
• | governmental regulations, taxes and policies. |
March 31, 2017 | December 31, 2016 | ||||||
(Unaudited) | |||||||
Assets: | |||||||
Cash and cash equivalents | $ | 30,855 | $ | 40,584 | |||
Available-for-sale securities (RESI common stock) | 24,773 | 17,934 | |||||
Related party receivables | 5,091 | 5,266 | |||||
Prepaid expenses and other assets | 2,510 | 1,964 | |||||
Total assets | $ | 63,229 | $ | 65,748 | |||
Liabilities: | |||||||
Accrued salaries and employee benefits | $ | 959 | $ | 4,100 | |||
Accounts payable and other accrued liabilities | 3,056 | 4,587 | |||||
Total liabilities | 4,015 | 8,687 | |||||
Commitments and contingencies (Note 3) | |||||||
Redeemable preferred stock: | |||||||
Preferred stock, $0.01 par value, 250,000 shares issued and outstanding as of March 31, 2017 and December 31, 2016; redemption value $250,000 | 249,392 | 249,340 | |||||
Stockholders' deficit: | |||||||
Common stock, $0.01 par value, 5,000,000 authorized shares; 2,740,548 and 1,547,002 shares issued and outstanding, respectively, as of March 31, 2017 and 2,637,629 and 1,513,912 shares issued and outstanding, respectively, as of December 31, 2016 | 27 | 26 | |||||
Additional paid-in capital | 32,931 | 30,696 | |||||
Retained earnings | 44,775 | 46,145 | |||||
Accumulated other comprehensive income (loss) | 2,569 | (2,662 | ) | ||||
Treasury stock, at cost, 1,193,546 shares as of March 31, 2017 and 1,123,717 shares as of December 31, 2016 | (270,480 | ) | (266,484 | ) | |||
Total stockholders' deficit | (190,178 | ) | (192,279 | ) | |||
Total liabilities and equity | $ | 63,229 | $ | 65,748 |
Three months ended March 31, 2017 | Three months ended March 31, 2016 | ||||||
Revenues: | |||||||
Management fees from RESI | $ | 4,211 | $ | 4,124 | |||
Conversion fees from RESI | 604 | 402 | |||||
Expense reimbursements from RESI | 196 | — | |||||
Total revenues | 5,011 | 4,526 | |||||
Expenses: | |||||||
Salaries and employee benefits | 4,687 | 4,209 | |||||
Legal and professional fees | 684 | 541 | |||||
General and administrative | 1,157 | 1,021 | |||||
Total expenses | 6,528 | 5,771 | |||||
Other income: | |||||||
Dividend income on RESI common stock | 244 | 292 | |||||
Other income | 12 | 2 | |||||
Total other income | 256 | 294 | |||||
Loss before income taxes | (1,261 | ) | (951 | ) | |||
Income tax expense (benefit) | 57 | (11 | ) | ||||
Net loss | $ | (1,318 | ) | $ | (940 | ) | |
Loss per share of common stock – basic: | |||||||
Loss per basic share | $ | (0.89 | ) | $ | (0.50 | ) | |
Weighted average common stock outstanding – basic | 1,545,555 | 1,990,153 | |||||
Loss per share of common stock – diluted: | |||||||
Loss per diluted share | $ | (0.89 | ) | $ | (0.50 | ) | |
Weighted average common stock outstanding – diluted | 1,545,555 | 1,990,153 |
Three months ended March 31, 2017 | Three months ended March 31, 2016 | ||||||
Net loss | $ | (1,318 | ) | $ | (940 | ) | |
Other comprehensive income (loss): | |||||||
Change in fair value of available-for-sale securities (RESI common stock) | 6,839 | (121 | ) | ||||
Other comprehensive income (loss), before tax effect | 6,839 | (121 | ) | ||||
Tax expense of other comprehensive income (loss) | (1,608 | ) | — | ||||
Total other comprehensive income (loss) | 5,231 | (121 | ) | ||||
Comprehensive income (loss) | $ | 3,913 | $ | (1,061 | ) |
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Noncontrolling Interest in Previously Consolidated Affiliate | Total Deficit | ||||||||||||||||||||||||
Number of Shares | Amount | |||||||||||||||||||||||||||||
December 31, 2016 | 2,637,629 | $ | 26 | $ | 30,696 | $ | 46,145 | $ | (2,662 | ) | $ | (266,484 | ) | $ | — | $ | (192,279 | ) | ||||||||||||
Issuance of common stock, including option exercises | 102,919 | 1 | 66 | — | — | — | — | 67 | ||||||||||||||||||||||
Treasury shares repurchased | — | — | — | — | — | (3,996 | ) | — | (3,996 | ) | ||||||||||||||||||||
Amortization of preferred stock issuance costs | — | — | — | (52 | ) | — | — | — | (52 | ) | ||||||||||||||||||||
Share-based compensation | — | — | 2,169 | — | — | — | — | 2,169 | ||||||||||||||||||||||
Change in fair value of available-for-sale securities (RESI common stock), net of tax | — | — | — | — | 5,231 | — | — | 5,231 | ||||||||||||||||||||||
Net loss | — | — | — | (1,318 | ) | — | — | — | (1,318 | ) | ||||||||||||||||||||
March 31, 2017 | 2,740,548 | $ | 27 | $ | 32,931 | $ | 44,775 | $ | 2,569 | $ | (270,480 | ) | $ | — | $ | (190,178 | ) |
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Noncontrolling Interest in Consolidated Affiliate | Total Equity | ||||||||||||||||||||||||
Number of Shares | Amount | |||||||||||||||||||||||||||||
December 31, 2015 | 2,556,828 | $ | 26 | $ | 23,419 | $ | 50,678 | $ | — | $ | (254,984 | ) | $ | 1,145,639 | $ | 964,778 | ||||||||||||||
Cumulative effect of adoption of ASU 2015-02 (Note 1) | — | — | (2,330 | ) | 609 | (981 | ) | — | (1,145,639 | ) | (1,148,341 | ) | ||||||||||||||||||
January 1, 2016 | 2,556,828 | 26 | 21,089 | 51,287 | (981 | ) | (254,984 | ) | — | (183,563 | ) | |||||||||||||||||||
Issuance of common stock, including option exercises | 12,952 | — | 6 | — | — | — | — | 6 | ||||||||||||||||||||||
Treasury shares repurchased | — | — | — | — | — | (2,335 | ) | — | (2,335 | ) | ||||||||||||||||||||
Amortization of preferred stock issuance costs | — | — | — | (52 | ) | — | — | — | (52 | ) | ||||||||||||||||||||
Share-based compensation | — | — | 2,368 | — | — | — | — | 2,368 | ||||||||||||||||||||||
Change in fair value of available-for-sale securities (RESI common stock) | — | — | — | — | (121 | ) | — | — | (121 | ) | ||||||||||||||||||||
Net loss | — | — | — | (940 | ) | — | — | — | (940 | ) | ||||||||||||||||||||
March 31, 2016 | 2,569,780 | $ | 26 | $ | 23,463 | $ | 50,295 | $ | (1,102 | ) | $ | (257,319 | ) | $ | — | $ | (184,637 | ) |
Three months ended March 31, 2017 | Three months ended March 31, 2016 | ||||||
Operating activities: | |||||||
Net loss | $ | (1,318 | ) | $ | (940 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Share-based compensation | 2,169 | 2,368 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable, net | — | 123 | |||||
Related party receivables | 175 | (4,676 | ) | ||||
Prepaid expenses and other assets | (546 | ) | (287 | ) | |||
Accrued salaries and employee benefits | (3,141 | ) | (2,869 | ) | |||
Accounts payable and other accrued liabilities | (3,139 | ) | (32 | ) | |||
Related party payables | — | (1,966 | ) | ||||
Net cash used in operating activities | (5,800 | ) | (8,279 | ) | |||
Investing activities: | |||||||
Decrease in cash due to deconsolidation of RESI (Note 1) | — | (116,702 | ) | ||||
Purchases of RESI common stock | — | (15,588 | ) | ||||
Net cash used in investing activities | — | (132,290 | ) | ||||
Financing activities: | |||||||
Issuance of common stock, including stock option exercises | 363 | 18 | |||||
Repurchase of common stock | (3,996 | ) | (2,335 | ) | |||
Payment of tax withholdings on exercise of stock options | (296 | ) | (12 | ) | |||
Net cash used in financing activities | (3,929 | ) | (2,329 | ) | |||
Net change in cash and cash equivalents | (9,729 | ) | (142,898 | ) | |||
Cash and cash equivalents as of beginning of the period | 40,584 | 184,544 | |||||
Cash and cash equivalents as of end of the period | $ | 30,855 | $ | 41,646 | |||
Supplemental disclosure of cash flow information | |||||||
Income taxes paid | $ | 662 | $ | 4 | |||
Decrease in noncontrolling interest due to deconsolidation of RESI (Note 1) | — | (1,145,639 | ) | ||||
Decrease in repurchase and loan agreements and other secured borrowings due to deconsolidation of RESI (Note 1) | — | (1,265,968 | ) | ||||
Decrease in real estate assets and mortgage loans due to deconsolidation of RESI (Note 1) | — | 2,264,296 |
Level 1 | Level 2 | Level 3 | |||||||||||||
Carrying Amount | Quoted Prices in Active Markets | Observable Inputs Other Than Level 1 Prices | Unobservable Inputs | ||||||||||||
March 31, 2017 | |||||||||||||||
Recurring basis (assets): | |||||||||||||||
Available-for-sale securities: RESI common stock | $ | 24,773 | $ | 24,773 | $ | — | $ | — | |||||||
December 31, 2016 | |||||||||||||||
Recurring basis (assets): | |||||||||||||||
Available-for-sale securities: RESI common stock | $ | 17,934 | $ | 17,934 | $ | — | $ | — |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
March 31, 2017 | |||||||||||||||
Available-for-sale securities: RESI common stock | $ | 20,596 | $ | 4,177 | $ | — | $ | 24,773 | |||||||
December 31, 2016 | |||||||||||||||
Available-for-sale securities: RESI common stock | $ | 20,596 | $ | — | $ | 2,662 | $ | 17,934 |
• | Base Management Fee. We are entitled to a quarterly Base Management Fee equal to 1.5% of the product of (i) RESI’s average invested capital (as defined in the AMA) for the quarter multiplied by (ii) 0.25, while it has fewer than 2,500 single-family rental properties actually rented (“Rental Properties”). The Base Management Fee percentage increases to 1.75% of average invested capital while RESI has between 2,500 and 4,499 Rental Properties and increases to 2.0% of invested capital while RESI has 4,500 or more rental properties; |
• | Incentive Management Fee. We are entitled to a quarterly Incentive Management Fee equal to 20% of the amount by which RESI's return on invested capital (based on AFFO, defined as net income attributable to holders of common stock calculated in accordance with GAAP plus real estate depreciation expense minus recurring capital expenditures on all real estate assets owned by RESI) exceeds an annual hurdle return rate of between 7.0% and 8.25% (depending on the 10-year treasury rate). The Incentive Management Fee increases to 22.5% while RESI has between 2,500 and 4,499 Rental Properties and increases to 25% while RESI has 4,500 or more Rental Properties; and |
• | Conversion Fee. We are entitled to a quarterly Conversion Fee equal to 1.5% of converted into leased single-family homes by RESI for the first time during the applicable quarter. |
Three months ended March 31, 2017 | Three months ended March 31, 2016 | ||||||
Management fees from RESI | $ | 4,211 | $ | 4,124 | |||
Conversion fees from RESI | 604 | 402 | |||||
Expense reimbursements from RESI | 196 | — |
Three months ended March 31, 2017 | Three months ended March 31, 2016 | ||||||
Numerator | |||||||
Net loss | $ | (1,318 | ) | $ | (940 | ) | |
Amortization of preferred stock issuance costs | (52 | ) | (52 | ) | |||
Numerator for basic and diluted EPS – loss attributable to common stockholders | (1,370 | ) | (992 | ) | |||
Denominator | |||||||
Weighted average common stock outstanding – basic | 1,545,555 | 1,990,153 | |||||
Weighted average common stock outstanding – diluted | 1,545,555 | 1,990,153 | |||||
Loss per basic common share | $ | (0.89 | ) | $ | (0.50 | ) | |
Loss per diluted common share | $ | (0.89 | ) | $ | (0.50 | ) |
Three months ended March 31, 2017 | Three months ended March 31, 2016 | ||||||
Numerator | |||||||
Amortization of preferred stock issuance costs | $ | 52 | $ | 52 | |||
Denominator | |||||||
Stock options | 113,339 | 169,598 | |||||
Restricted stock | 40,666 | 52,122 | |||||
Preferred stock, if converted | 200,000 | 200,000 |
• | Base Management Fee. We are entitled to a quarterly Base Management Fee equal to 1.5% of the product of (i) RESI's average invested capital (as defined in the AMA) for the quarter multiplied by (ii) 0.25, while it has fewer than 2,500 single-family rental properties actually rented (“Rental Properties”). The Base Management Fee percentage increases to 1.75% of invested capital while RESI has between 2,500 and 4,499 Rental Properties and increases to 2.0% of invested capital while it has 4,500 or more Rental Properties; |
• | Incentive Management Fee. We are entitled to a quarterly Incentive Management Fee equal to 20% of the amount by which RESI's return on invested capital (based on AFFO, defined as net income attributable to holders of common stock calculated in accordance with GAAP plus real estate depreciation expense minus recurring capital expenditures on all real estate assets owned by RESI) exceeds an annual hurdle return rate of between 7.0% and 8.25% (depending on the 10-year treasury rate). The Incentive Management Fee increases to 22.5% while RESI has between 2,500 and 4,499 Rental Properties and increases to 25% while it has 4,500 or more Rental Properties; and |
• | Conversion Fee. We are entitled to a quarterly Conversion Fee equal to 1.5% of the market value of assets converted into leased single-family homes by RESI for the first time during the applicable quarter. |
Three months ended March 31, 2017 | Three months ended March 31, 2016 | ||||||
Net cash used in operating activities | $ | (5,800 | ) | $ | (8,279 | ) | |
Net cash used in investing activities (1) | — | (132,290 | ) | ||||
Net cash used in financing activities | (3,929 | ) | (2,329 | ) | |||
Total cash flows | $ | (9,729 | ) | $ | (142,898 | ) |
(1) | Upon deconsolidation of RESI effective January 1, 2016, we recognized a reduction in cash of $116.7 million, which represented the cash attributable to RESI within our consolidated balance sheet as of December 31, 2015. |
(a) Total Number of Shares Purchased | (b) Average Price Paid per Share | (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | (d) Maximum Dollar Value of Shares that may yet be Purchased Under Plans or Programs (1) | |||||||||||
January 1, 2017 to January 31, 2017 | — | $ | — | 1,109,196 | $ | 39,465 | ||||||||
February 1, 2017 to February 28, 2017 | — | — | 1,109,196 | 39,465 | ||||||||||
March 1, 2017 to March 31, 2017 | 69,570 | 57.21 | 1,178,766 | 35,484 | ||||||||||
For the quarter ended March 31, 2017 | 69,570 | 57.21 | 1,178,766 | 35,484 |
(1) | Since Board approval of repurchases is based on dollar amount, we cannot estimate the number of shares remaining to be purchased. |
Exhibit Number | Description | |
2.1 | Separation Agreement, dated as of December 21, 2012, between Altisource Asset Management Corporation and Altisource Portfolio Solutions S.A. (incorporated by reference to Exhibit 2.1 of the Registrant's Current Report on Form 8-K filed with the Commission on December 28, 2012). | |
3.1 | Amended and Restated Articles of Incorporation of Altisource Asset Management Corporation (incorporated by reference to Exhibit 3.1 of the Registrant's Registration Statement on Form 10 filed with the Commission on December 5, 2012). | |
3.2 | First Amended and Restated Bylaws of Altisource Asset Management Corporation (incorporated by reference to Exhibit 3.2 of the Registrant's Registration Statement on Form 10 filed with the Commission on December 5, 2012). | |
3.3 | Certificate of Designations establishing the Company’s Series A Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed with the Commission on March 19, 2014). | |
31.1* | Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act | |
31.2* | Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act | |
32.1* | Certification of CEO Pursuant to Section 906 of the Sarbanes-Oxley Act | |
32.2* | Certification of CFO Pursuant to Section 906 of the Sarbanes-Oxley Act | |
101.INS* | XBRL Instance Document | |
101.SCH* | XBRL Taxonomy Extension Schema Document | |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB* | XBRL Extension Labels Linkbase | |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document |
Altisource Asset Management Corporation | ||||
Date: | May 9, 2017 | By: | /s/ | Robin N. Lowe |
Robin N. Lowe | ||||
Chief Financial Officer |
Date: | May 9, 2017 | By: | /s/ | George G. Ellison |
George G. Ellison | ||||
Chief Executive Officer |
Date: | May 9, 2017 | By: | /s/ | Robin N. Lowe |
Robin N. Lowe | ||||
Chief Financial Officer |
Date: | May 9, 2017 | By: | /s/ | George G. Ellison |
George G. Ellison | ||||
Chief Executive Officer |
Date: | May 9, 2017 | By: | /s/ | Robin N. Lowe |
Robin N. Lowe | ||||
Chief Financial Officer |
Document and entity information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
May 02, 2017 |
|
Document and Entity Information [Abstract] | ||
Entity registrant name | Altisource Asset Management Corporation | |
Entity central index key | 0001555074 | |
Current fiscal year end date | --12-31 | |
Entity filer category | Non-accelerated Filer | |
Document type | 10-Q | |
Document period end date | Mar. 31, 2017 | |
Document fiscal year focus | 2017 | |
Document fiscal period focus | Q1 | |
Amendment flag | false | |
Entity common stock, shares outstanding | 1,554,461 |
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (1,318) | $ (940) |
Other comprehensive income (loss): | ||
Change in fair value of available-for-sale securities (RESI common stock) | 6,839 | (121) |
Other comprehensive income (loss), before tax effect | 6,839 | (121) |
Tax expense of other comprehensive income (loss) | (1,608) | 0 |
Total other comprehensive income (loss) | 5,231 | (121) |
Comprehensive income (loss) | $ 3,913 | $ (1,061) |
Organization and basis of presentation |
3 Months Ended |
---|---|
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and basis of presentation | Organization and basis of presentation We were incorporated in the United States Virgin Islands on March 15, 2012 (our “inception”) and commenced operations on December 21, 2012. Our primary business is to provide asset management and certain corporate governance services to institutional investors. In October 2013, we applied for and were granted registration by the Securities and Exchange Commission (the “SEC”) as a registered investment adviser under section 203(c) of the Investment Advisers Act of 1940. Our primary client currently is Altisource Residential Corporation (“RESI”), a public real estate investment trust (“REIT”) focused on acquiring and managing quality, affordable single-family rental (“SFR”) properties for working class families throughout the United States. Substantially all of our revenue for all periods presented was generated through our asset management agreement (the “AMA”) with RESI. We provide services to RESI pursuant to the AMA, under which we are the exclusive asset manager for RESI for an initial term of 15 years from April 1, 2015, with two potential five-year extensions. The AMA provides for a fee structure in which we are entitled to a base management fee, an incentive management fee and a conversion fee for loans and real estate owned (“REO”) properties that become rental properties during each quarter. Accordingly, our operating results continue to be highly dependent on RESI’s operating results. See Note 4 for additional details of the AMA. Additionally, we provide management services to our wholly owned subsidiary, NewSource Reinsurance Company Ltd. (“NewSource”), a title insurance and reinsurance company in Bermuda. On December 2, 2013, NewSource became registered as a licensed reinsurer with the Bermuda Monetary Authority (“BMA”). NewSource commenced reinsurance activities during the second quarter of 2014. In December 2014, NewSource determined that the economics of the initial business did not warrant the continuation of its initial reinsurance quota share agreement with an unrelated third party. NewSource therefore transferred all of the risk of claims and future losses underwritten to an unrelated third party, and its reinsurance and insurance business has been dormant since that time. Basis of presentation and use of estimates The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). All wholly owned subsidiaries are included, and all intercompany accounts and transactions have been eliminated. The unaudited interim condensed consolidated financial statements and accompanying unaudited condensed consolidated financial information, in our opinion, contain all adjustments that are of a normal recurring nature and are necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods. The interim results are not necessarily indicative of results for a full year. We have omitted certain notes and other information from the interim condensed consolidated financial statements presented in this Quarterly Report on Form 10-Q as permitted by SEC rules and regulations. These condensed consolidated financial statements should be read in conjunction with our annual consolidated financial statements included within our 2016 Annual Report on Form 10-K, which was filed with the SEC on March 1, 2017. Effective January 1, 2016, the accompanying condensed consolidated financial statements include the accounts of AAMC and its consolidated subsidiaries, which are comprised of voting interest entities in which we are determined to have a controlling financial interest under Accounting Standards Codification (“ASC”) 810, as amended by Accounting Standards Update (“ASU”) 2015-02, Consolidation (Topic 810) – Amendments to the Consolidation Analysis (“ASU 2015-02”). Our voting interest entities consist entirely of our wholly owned subsidiaries. We also consider variable interest entities (“VIEs”) for consolidation where we are the primary beneficiary. With the adoption of the ASU 2015-02 effective January 1, 2016, we no longer consolidate RESI as a VIE, and we currently do not have any other potential VIEs. Prior year amounts related to share-based compensation have been reclassified to salaries and employee benefits and general and administrative expenses within our condensed consolidated statement of operations for consistency with the current period presentation. This reclassification had no effect on the reported results of operations. Use of estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Deconsolidation of RESI Prior to our adoption of ASU 2015-02 on January 1, 2016, we consolidated the accounts of RESI in our consolidated financial statements as a VIE. Effective January 1, 2016, we adopted the provisions of ASU 2015-02, and we performed an analysis of our relationship with RESI pursuant to the amended guidance. We determined that the compensation we receive in return for our services to RESI is commensurate with the level of effort required to perform such services and the arrangement includes customary terms, conditions or amounts present in arrangements for similar services negotiated at arm’s length; therefore, RESI is no longer a VIE under the amended guidance. As a result, effective January 1, 2016, we no longer consolidate the accounts of RESI. We have applied ASU 2015-02 using the modified retrospective approach, which has resulted in a cumulative-effect adjustment to equity on January 1, 2016. As a result, periods ending prior to the adoption were not impacted. The adoption effectively removed those balances previously disclosed that related to RESI from our consolidated financial statements and eliminated the amounts previously reported as noncontrolling interests in RESI as a consolidated affiliate. Subsequent to adoption, our consolidated revenues consist primarily of management fees received from RESI under the AMA, and our consolidated expenses consist primarily of salaries and employee benefits, legal and professional fees and general and administrative expenses. Preferred stock During the first quarter of 2014, we issued $250.0 million of convertible preferred stock. All of the outstanding shares of preferred stock are redeemable by us in March 2020, the sixth anniversary of the date of issuance, and every five years thereafter. On these same redemption dates, each holder of preferred stock may potentially cause us to redeem all the shares of preferred stock held by such holder at a redemption price equal to $1,000 per share, out of funds legally available therefor. Accordingly, we classify these shares as mezzanine equity, outside of permanent stockholders' equity. The holders of shares of Series A Preferred Stock are not entitled to receive dividends with respect to the Series A Preferred Stock. The shares of Series A Preferred Stock are convertible into shares of our common stock at a conversion price of $1,250 per share (or an exchange ratio of 0.8 shares of common stock for each share of Series A Preferred Stock), subject to certain anti-dilution adjustments. Upon a change of control or upon the liquidation, dissolution or winding up of the Company, holders of the Series A Preferred Stock will be entitled to receive an amount in cash per Series A Preferred Stock equal to the greater of: (i) $1,000 plus the aggregate amount of cash dividends paid on the number of shares of common stock into which such share of Series A Preferred Stock was convertible on each ex-dividend date for such dividends; and (ii) the number of shares of common stock into which the Series A Preferred Stock is then convertible multiplied by the then current market price of the common stock. The Series A Preferred Stock confers no voting rights to holders, except with respect to matters that materially and adversely affect the voting powers, rights or preferences of the Series A Preferred Stock or as otherwise required by applicable law. With respect to the distribution of assets upon the liquidation, dissolution or winding up of the Company, the Series A Preferred Stock ranks senior to our common stock and on parity with all other classes of preferred stock that may be issued by us in the future. 2016 Employee Preferred Stock Plan On May 26, 2016, the 2016 Employee Preferred Stock Plan (the “Employee Preferred Stock Plan”) was approved by our stockholders. Pursuant to the Employee Preferred Stock Plan, the Company may grant one or more series of non-voting preferred stock, par value $0.01 per share in the Company to induce certain employees to become employed and remain employees of the Company in the U.S. Virgin Islands (“USVI”), and any of its future USVI subsidiaries, to encourage ownership of shares in the Company by such USVI employees and to provide additional incentives for such employees to promote the success of the Company’s business. Pursuant to our stockholder approval of the Employee Preferred Stock Plan, on December 29, 2016, the Company authorized 14 additional series of preferred stock of the Company, consisting of Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock, Series F Preferred Stock, Series G Preferred Stock, Series H Preferred Stock, Series I Preferred Stock, Series J Preferred Stock, Series K Preferred Stock, Series L Preferred Stock, Series M Preferred Stock, Series N Preferred Stock and Series O Preferred Stock, and each series shall consist of up to an aggregate of 1,000 shares. On January 5, 2017, we issued an aggregate of 900 shares of preferred stock to certain of our USVI employees. These shares of preferred stock are mandatorily redeemable by us in the event of the holder's termination of service with the Company for any reason; therefore, these shares are classified within accounts payable and accrued liabilities in our condensed consolidated balance sheet. In March 2017, our Board of Directors declared and paid an aggregate of $0.6 million of dividends on the preferred stock issued under the Employee Preferred Stock Plan. Such dividends are included in salaries and employee benefits in our condensed consolidated statement of operations. Recently issued accounting standards Adoption of recent accounting standards In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, in an effort to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This update standard is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. We adopted the provisions of ASU 2017-01 effective January 1, 2017. This adoption had no significant effect on our condensed consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The amendments in ASU 2016-18 require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This update standard is effective for public business entities for fiscal years beginning after December 15, 2017 and interim periods within fiscal years beginning after December 15, 2019. The amendments in ASU 2016-18 should be applied on a retrospective transition basis. Early adoption is permitted, including adoption during an interim period. Effective January 1, 2017, the Company has adopted the provisions of ASU 2016-18. This adoption had no significant effect on our condensed consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718). ASU 2016-09 makes several modifications to Topic 718 related to the accounting for forfeitures, employer tax withholding on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies. ASU 2016-09 also clarifies the statement of cash flows presentation for certain components of share-based awards. This update standard became effective for interim and annual reporting periods beginning after December 15, 2016. Our adoption of this amendment on January 1, 2017 did not have a significant effect on our condensed consolidated financial statements. Recently issued accounting standards not yet adopted In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The amendments in ASU 2016-15 address eight specific cash flow issues and apply to all entities that are required to present a statement of cash flows under Topic 230. The amendments in ASU 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is permitted, including adoption during an interim period. We do not expect this amendment to a significant effect on our consolidated financial statements. In February 2016, FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires that lessees recognize assets and liabilities for leases with lease terms greater than twelve months in the statement of financial position and also requires improved disclosures to help users of financial statements better understand the amount, timing and uncertainty of cash flows arising from leases. This update is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within those fiscal years. Early adoption is permitted. We do not expect this amendment to a significant effect on our consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10). ASU 2016-01 requires all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). The amendments also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition, the amendments eliminate the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities and the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet for public business entities. The amendments in this Update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. Upon our adoption of ASU 2016-01, we expect to recognize a cumulative-effect adjustment to our balance sheet to reclassify our accumulated other comprehensive income to our statement of operations, and we will thereafter record changes in the fair value of our available-for-sale securities through profit and loss. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. In August 2015, FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which effectively delayed the adoption date of ASU 2014-09 by one year. In 2016, the FASB issued accounting standards updates that amended several aspects of ASU 2014-09. ASU 2014-09, as amended, is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted for fiscal years, and interim periods within those years, beginning after December 15, 2016. We do not expect this amendment to have a significant effect on our consolidated financial statements. We anticipate applying this amendment using the modified retrospective method. |
Fair value of financial instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of financial instruments | Fair value of financial instruments The following table sets forth carrying amount and the fair value of the Company's financial assets by level within the fair value hierarchy as of March 31, 2017 ($ in thousands):
We did not transfer any assets from one level to another level during the three months ended March 31, 2017 and during the year ended December 31, 2016. The fair value of our available-for-sale securities is based on unadjusted quoted market prices from active markets. We held 1,624,465 shares of RESI's common stock at each of March 31, 2017 and December 31, 2016, representing approximately 3.0% RESI's then-outstanding common stock at each date, which is included as available-for-sale securities in our condensed consolidated balance sheet. All of our shares of RESI's common stock were acquired in open market transactions. We received dividends on RESI's common stock of $0.2 million and $0.3 million during the three months ended March 31, 2017 and 2016, respectively. The following table presents the amortized cost and fair value of our available-for-sale securities as of March 31, 2017 ($ in thousands):
We have recognized no other-than-temporary impairment related to our investment in RESI's common stock. During the three months ended March 31, 2016, we acquired 1,300,000 shares of RESI's common stock in open market transactions at a weighted average purchase price of $11.97 per share, respectively. |
Commitments and contingencies |
3 Months Ended |
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Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and contingencies Litigation, claims and assessments From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. Set forth below is a summary of legal proceedings to which we are a party during 2017: City of Cambridge Retirement System v. Altisource Asset Management Corp., et al. On January 16, 2015, a putative shareholder class action complaint was filed in the United States District Court of the Virgin Islands by a purported shareholder of AAMC under the caption City of Cambridge Retirement System v. Altisource Asset Management Corp., et al., 15-cv-00004. The action names as defendants AAMC, our former Chairman, William C. Erbey, and certain officers of AAMC and alleges that the defendants violated federal securities laws by failing to disclose material information to AAMC shareholders concerning alleged conflicts of interest held by Mr. Erbey with respect to AAMC’s relationship and transactions with RESI, Altisource, Home Loan Servicing Solutions, Ltd., Southwest Business Corporation, NewSource Reinsurance Company and Ocwen Financial Corporation, including allegations that the defendants failed to disclose (i) the nature of relationships between Mr. Erbey, AAMC and those entities; and (ii) that the transactions were the result of an allegedly unfair process from which Mr. Erbey failed to recuse himself. The action seeks, among other things, an award of monetary damages to the putative class in an unspecified amount and an award of attorney’s and other fees and expenses. AAMC and Mr. Erbey are the only defendants who have been served with the complaint. On May 12, 2015, the court entered an order granting the motion of Denver Employees Retirement Plan to be lead plaintiff. On May 15, 2015, the court entered a scheduling order requiring plaintiff to file an amended complaint on or before June 19, 2015, and setting a briefing schedule for any motion to dismiss. Plaintiff filed an amended complaint on June 19, 2015. On July 20, 2015, AAMC and Mr. Erbey filed a motion to dismiss the amended complaint. Briefing on the motion to dismiss was completed on September 3, 2015, and we are awaiting a decision from the court on the motion. On December 16, 2016, the case was reassigned to a new Judge, U.S. District Court Judge Harvey Bartle, III, in the Eastern District of Pennsylvania. On April 6, 2017, the Court issued an opinion and order granting defendants’ motion to dismiss the complaint for failure to state a claim upon which relief can be granted. On April 21, 2017, Plaintiff filed a notice with the court that it intended to file a first amended consolidated complaint in the matter no later than May 1, 2017. On May 1, 2017, Plaintiff filed a motion for leave to amend the complaint and, at the same time, filed a first amended consolidated complaint. We believe the amended complaint is without merit. At this time, we are not able to predict the ultimate outcome of this matter, nor can we estimate the range of possible loss, if any. Kanga v. Altisource Asset Management Corporation, et al. On March 12, 2015, a shareholder derivative action was filed in the Superior Court of the Virgin Islands, Division of St. Croix, by a purported shareholder of AAMC under the caption Nanzeen Kanga v. William Erbey, et al., SX-15-CV-105. The action names as defendants William C. Erbey and each of the current and former members of AAMC's Board of Directors and alleges that Mr. Erbey and AAMC’s directors breached fiduciary duties in connection with the disclosures that are the subject of the City of Cambridge Retirement System case described above and certain other matters involving the relationship of RESI and AAMC. On May 15, 2015, the plaintiff and the defendants filed an agreed motion to stay the action until the earliest of any of the following events: (i) the City of Cambridge Retirement System action is dismissed with prejudice; (ii) any of the defendants in the City of Cambridge Retirement System action file an answer in that action; and (iii) defendants do not move to stay any later-filed derivative action purportedly brought on behalf of us arising from similar facts as the Kanga action and relating to the same time frame or such motion to stay is denied. At this time, we are not able to predict the ultimate outcome of this matter, nor can we estimate the range of possible loss, if any. Management does not believe that we have incurred an estimable, probable or material loss by reason of any of the above actions. |
Related-party transactions |
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Related-party transactions | Related party transactions Asset management agreement with RESI Pursuant to our AMA with RESI, we design and implement RESI's business strategy, administer its business activities and day-to-day operations and provide corporate governance services, subject to oversight by RESI's Board of Directors. We are responsible for, among other duties: (1) performing and administering all of RESI's day-to-day operations; (2) defining investment criteria in RESI's investment policy in cooperation with its Board of Directors; (3) sourcing, analyzing and executing asset acquisitions, including the related financing activities; (4) analyzing and executing sales of REO properties and residential mortgage loans; (5) overseeing the Property Managers' renovation, leasing and property management of RESI's SFR properties; (6) overseeing the servicing of RESI's residential mortgage loan portfolios; (7) performing asset management duties and (8) performing corporate governance and other management functions, including financial, accounting and tax management services. We provide RESI with a management team and support personnel who have substantial experience in the acquisition and management of residential properties and residential mortgage loans. Our management also has significant corporate governance experience that enables us to manage RESI's business and organizational structure efficiently. We have agreed not to provide the same or substantially similar services without the prior written consent of RESI's Board of Directors to any business or entity competing against RESI in (a) the acquisition or sale of SFR and/or REO properties, non-performing and re-performing mortgage loans or other similar assets; (b) the carrying on of a single-family rental business or (c) any other activity in which RESI engages. Notwithstanding the foregoing, we may engage in any other business or render similar or different services to any businesses engaged in lending or insurance activities or any other activity other than those described above. Further, at any time following RESI's determination and announcement that it will no longer engage in any of the above-described competitive activities, we would be entitled to provide advisory or other services to businesses or entities in such competitive activities without RESI's prior consent. The AMA, which became effective on April 1, 2015, provides for a management fee structure as follows:
To the extent RESI has an aggregate shortfall in its return rate over the previous seven quarters, that aggregate return rate shortfall gets added to the normal quarterly 1.75% return hurdle for the next quarter before we are entitled to an Incentive Management Fee. RESI has the flexibility to pay up to 25% of the Incentive Management Fee to us in shares of its common stock. Under the AMA, RESI reimburses us for the compensation and benefits of the General Counsel dedicated to RESI and certain other out-of-pocket expenses incurred on RESI's behalf. The AMA requires that we are the exclusive asset manager for RESI for an initial term of 15 years from April 1, 2015, with two potential five-year extensions, subject to RESI achieving an average annual return on invested capital of at least 7.0%. RESI's termination rights under the AMA are significantly limited. Neither party is entitled to terminate the AMA prior to the end of the initial term, or each renewal term, other than termination by (a) us and/or RESI “for cause” for certain events such as a material breach of the AMA and failure to cure such breach, (b) RESI for certain other reasons such as its failure to achieve a return on invested capital of at least 7.0% for two consecutive fiscal years after the third anniversary of the AMA or (c) RESI in connection with certain change of control events. If the AMA were terminated by RESI, our financial position and future prospects for revenues and growth would be materially adversely affected. Summary of related party transactions The following table presents our significant transactions with RESI, which is a related party, for the periods indicated ($ in thousands):
No Incentive Management Fee was due from RESI for the first quarter of 2017 because RESI's return on invested capital (as defined in the AMA) was below the required hurdle rate. Under the AMA, to the extent RESI has an aggregate shortfall in its return rate over the previous seven quarters, that aggregate return rate shortfall gets added to the normal quarterly 1.75% return hurdle for the next quarter before we are entitled to an Incentive Management Fee. As of March 31, 2017, RESI's aggregate return shortfall under the AMA was approximately 55.60% of invested capital. As each quarter with a shortfall rolls off the trailing seven quarters, the aggregate shortfall will change by the difference in the quarter that rolls off versus the most recently completed quarter. We held 1,624,465 shares of RESI's common stock at each of March 31, 2017 and December 31, 2016, representing approximately 3.0% of RESI's then-outstanding common stock at each date. All of our shares of RESI's common stock were acquired in open market transactions. On March 23, 2017, we completed the repurchase of an aggregate of 50,000 shares of common stock from an affiliated fund of Luxor Capital Partners Group (“Luxor”) in a block trade at a price of $52.50 per share, or an aggregate of $2.6 million, pursuant to our previously reported $300.0 million stock repurchase program. Luxor may be considered a related party of the Company because a Luxor partner is a member of our Board of Directors. Following the transaction, the Company now holds the acquired shares as treasury shares. |
Share-based payments |
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Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based payments | Share-based payments On March 7, 2017, we granted 20,205 restricted stock units to members of management with a weighted average grant date fair value of $78.58 per share. The restricted stock units will vest in three equal annual installments on each of March 7, 2018, 2019 and 2020, subject to forfeiture or acceleration. During the three months ended March 31, 2016, we granted no share-based payments to members of management. Our Directors each received annual grants of restricted stock equal to $60,000 based on the market value of our common stock at the time of the annual stockholders meeting. These shares of restricted stock vest and are issued after a one-year service period, subject to each Director attending at least 75% of the Board and committee meetings. No dividends are paid on the shares until the award is issued. We recorded $2.2 million and $2.4 million of compensation expense related to our grants of restricted stock for the three months ended March 31, 2017 and 2016, respectively. As of March 31, 2017 and December 31, 2016, we had an aggregate $9.2 million and $9.6 million, respectively, of total unrecognized share-based compensation cost to be recognized over a weighted average remaining estimated term of 1.4 years and 1.5 years, respectively. |
Income taxes |
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Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes We are domiciled in the USVI and under current USVI law are obligated to pay taxes in the USVI on our income. We applied for tax benefits from the USVI Economic Development Commission and received our certificate of benefits (the “Certificate”), effective as of February 1, 2013. Pursuant to the Certificate, so long as we comply with its provisions, we will receive a 90% tax reduction on our USVI-sourced income taxes until 2043. As of March 31, 2017 and December 31, 2016, we accrued no interest or penalties associated with any unrecognized tax benefits, nor did we recognize any interest expense or penalty during the three months ended March 31, 2017 and 2016. |
Earnings per share |
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Earnings per share | Earnings per share The following table sets forth the components of diluted earnings (loss) per share (in thousands, except share and per share amounts):
We excluded the items presented below from the calculation of diluted earnings per share as they were antidilutive for the periods indicated:
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Segment information |
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Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment information | Segment information Our primary business is to provide asset management and certain corporate governance services to institutional investors. Because substantially all of our revenue is derived from the services we provide to RESI under the AMA, we operate as a single segment focused on providing asset management and corporate governance services. |
Subsequent events |
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Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent events | Subsequent events Management has evaluated the impact of all subsequent events through the issuance of these condensed consolidated interim financial statements and has determined that there were no subsequent events requiring adjustment or disclosure in the financial statements. |
Organization and basis of presentation (Policies) |
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Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation and use of estimates | The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). All wholly owned subsidiaries are included, and all intercompany accounts and transactions have been eliminated. The unaudited interim condensed consolidated financial statements and accompanying unaudited condensed consolidated financial information, in our opinion, contain all adjustments that are of a normal recurring nature and are necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods. The interim results are not necessarily indicative of results for a full year. We have omitted certain notes and other information from the interim condensed consolidated financial statements presented in this Quarterly Report on Form 10-Q as permitted by SEC rules and regulations. These condensed consolidated financial statements should be read in conjunction with our annual consolidated financial statements included within our 2016 Annual Report on Form 10-K, which was filed with the SEC on March 1, 2017. Effective January 1, 2016, the accompanying condensed consolidated financial statements include the accounts of AAMC and its consolidated subsidiaries, which are comprised of voting interest entities in which we are determined to have a controlling financial interest under Accounting Standards Codification (“ASC”) 810, as amended by Accounting Standards Update (“ASU”) 2015-02, Consolidation (Topic 810) – Amendments to the Consolidation Analysis (“ASU 2015-02”). Our voting interest entities consist entirely of our wholly owned subsidiaries. We also consider variable interest entities (“VIEs”) for consolidation where we are the primary beneficiary. With the adoption of the ASU 2015-02 effective January 1, 2016, we no longer consolidate RESI as a VIE, and we currently do not have any other potential VIEs. |
Deconsolidation of Residential | Deconsolidation of RESI Prior to our adoption of ASU 2015-02 on January 1, 2016, we consolidated the accounts of RESI in our consolidated financial statements as a VIE. Effective January 1, 2016, we adopted the provisions of ASU 2015-02, and we performed an analysis of our relationship with RESI pursuant to the amended guidance. We determined that the compensation we receive in return for our services to RESI is commensurate with the level of effort required to perform such services and the arrangement includes customary terms, conditions or amounts present in arrangements for similar services negotiated at arm’s length; therefore, RESI is no longer a VIE under the amended guidance. As a result, effective January 1, 2016, we no longer consolidate the accounts of RESI. We have applied ASU 2015-02 using the modified retrospective approach, which has resulted in a cumulative-effect adjustment to equity on January 1, 2016. As a result, periods ending prior to the adoption were not impacted. The adoption effectively removed those balances previously disclosed that related to RESI from our consolidated financial statements and eliminated the amounts previously reported as noncontrolling interests in RESI as a consolidated affiliate. Subsequent to adoption, our consolidated revenues consist primarily of management fees received from RESI under the AMA, and our consolidated expenses consist primarily of salaries and employee benefits, legal and professional fees and general and administrative expenses. |
Recently issued accounting standards | Recently issued accounting standards Adoption of recent accounting standards In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, in an effort to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This update standard is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. We adopted the provisions of ASU 2017-01 effective January 1, 2017. This adoption had no significant effect on our condensed consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The amendments in ASU 2016-18 require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This update standard is effective for public business entities for fiscal years beginning after December 15, 2017 and interim periods within fiscal years beginning after December 15, 2019. The amendments in ASU 2016-18 should be applied on a retrospective transition basis. Early adoption is permitted, including adoption during an interim period. Effective January 1, 2017, the Company has adopted the provisions of ASU 2016-18. This adoption had no significant effect on our condensed consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718). ASU 2016-09 makes several modifications to Topic 718 related to the accounting for forfeitures, employer tax withholding on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies. ASU 2016-09 also clarifies the statement of cash flows presentation for certain components of share-based awards. This update standard became effective for interim and annual reporting periods beginning after December 15, 2016. Our adoption of this amendment on January 1, 2017 did not have a significant effect on our condensed consolidated financial statements. Recently issued accounting standards not yet adopted In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The amendments in ASU 2016-15 address eight specific cash flow issues and apply to all entities that are required to present a statement of cash flows under Topic 230. The amendments in ASU 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is permitted, including adoption during an interim period. We do not expect this amendment to a significant effect on our consolidated financial statements. In February 2016, FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires that lessees recognize assets and liabilities for leases with lease terms greater than twelve months in the statement of financial position and also requires improved disclosures to help users of financial statements better understand the amount, timing and uncertainty of cash flows arising from leases. This update is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within those fiscal years. Early adoption is permitted. We do not expect this amendment to a significant effect on our consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10). ASU 2016-01 requires all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). The amendments also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition, the amendments eliminate the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities and the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet for public business entities. The amendments in this Update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. Upon our adoption of ASU 2016-01, we expect to recognize a cumulative-effect adjustment to our balance sheet to reclassify our accumulated other comprehensive income to our statement of operations, and we will thereafter record changes in the fair value of our available-for-sale securities through profit and loss. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. In August 2015, FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which effectively delayed the adoption date of ASU 2014-09 by one year. In 2016, the FASB issued accounting standards updates that amended several aspects of ASU 2014-09. ASU 2014-09, as amended, is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted for fiscal years, and interim periods within those years, beginning after December 15, 2016. We do not expect this amendment to have a significant effect on our consolidated financial statements. We anticipate applying this amendment using the modified retrospective method. |
Fair value of financial instruments (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value measurements, recurring and nonrecurring | The following table sets forth carrying amount and the fair value of the Company's financial assets by level within the fair value hierarchy as of March 31, 2017 ($ in thousands):
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Fair value, unrealized gains (losses) | The following table presents the amortized cost and fair value of our available-for-sale securities as of March 31, 2017 ($ in thousands):
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Related-party transactions (Tables) |
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of related party transactions | The following table presents our significant transactions with RESI, which is a related party, for the periods indicated ($ in thousands):
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Earnings per share (Tables) |
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of earning per share, basic and diluted | The following table sets forth the components of diluted earnings (loss) per share (in thousands, except share and per share amounts):
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Schedule of antidilutive securities excluded from computation of earnings per share | We excluded the items presented below from the calculation of diluted earnings per share as they were antidilutive for the periods indicated:
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Fair value of financial instruments - Narrative (Details) - Common Stock - Altisource Residential Corporation - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | ||
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Mar. 31, 2017 |
Mar. 31, 2016 |
Dec. 31, 2016 |
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Investment Holdings [Line Items] | |||
Shares acquired in Residential | 1,624,465 | 1,624,465,000 | |
Investment owned, ownership percentage | 3.00% | 3.00% | |
Proceeds from dividends received | $ 0.2 | $ 0.3 | |
Additional shares acquired in Residential (shares) | 1,300,000 | ||
Average purchase price per share of additional shares acquired in Residential (usd per share) | $ 11.97 |
Fair value of financial instruments - Fair value, unrealized gains (losses) (Details) - Common Stock - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amortized Cost | $ 20,596 | $ 20,596 |
Gross Unrealized Gains | 4,177 | 0 |
Gross Unrealized Losses | 0 | 2,662 |
Fair Value | $ 24,773 | $ 17,934 |
Share-based payments (Details) - USD ($) |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 07, 2017 |
Mar. 31, 2017 |
Mar. 31, 2016 |
Dec. 31, 2016 |
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Share-based compensation arrangement by share-based payment award [Line Items] | ||||
Share-based compensation | $ 2,169,000 | $ 2,368,000 | ||
Unamortized stock compensation | $ 9,200,000 | $ 9,600,000 | ||
Weighted average remaining amortization period of unamortized share based compensation | 1 year 5 months | 1 year 6 months | ||
Management | Restricted stock | ||||
Share-based compensation arrangement by share-based payment award [Line Items] | ||||
Shares of restricted stock granted (in shares) | 20,205 | |||
Weighted average grant date fair value of market based restricted stock granted (usd per share) | $ 78.58 | |||
Director | Restricted stock | ||||
Share-based compensation arrangement by share-based payment award [Line Items] | ||||
Value of restricted stock granted to directors annually | $ 60,000 | |||
Required service period for restricted stock | 1 year | |||
Director attendance requirement | 75.00% |
Income taxes (Details) |
3 Months Ended |
---|---|
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income tax exemption, percentage | 90.00% |
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