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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Altisource Asset Management Corporation | AMEX:AAMC | AMEX | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.274 | -8.45% | 2.97 | 3.2499 | 2.97 | 3.16 | 3,269 | 21:00:24 |
x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2016
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
UNITED STATES VIRGIN ISLANDS
|
66-0783125
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
(Title of Each Class)
|
(Name of exchange on which registered)
|
Common stock, par value $0.01 per share
|
NYSE MKT
|
Large Accelerated Filer
|
¨
|
|
Accelerated Filer
|
¨
|
Non-Accelerated Filer
|
x
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(Do not check if a smaller reporting company)
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Smaller Reporting Company
|
¨
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•
|
our ability to implement our business strategy and the business strategy of RESI;
|
•
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our ability to retain RESI as a client;
|
•
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our ability to retain and maintain our strategic relationships;
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•
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the ability of RESI to generate a return on invested capital in excess of applicable hurdle rates or cash available for distribution to its stockholders under our management;
|
•
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our ability to obtain additional asset management clients or businesses;
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•
|
our ability to effectively compete with our competitors;
|
•
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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;
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•
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general economic and market conditions; and
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•
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governmental regulations, taxes and policies.
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•
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Acquisition Strategy Enables RESI to Build a Portfolio that we Expect will Provide High Yields to its Stockholders.
Through our personnel and technical expertise, we have developed a valuation model for RESI that uses proprietary historical data to evaluate and project the performance of single-family rental assets and residential mortgage loans. This valuation model has been built with multiple broad economic inputs as well as individual property-level inputs to determine which properties will produce the highest possible yields and how much to pay for these properties to best achieve optimal results. These internally-developed tools help RESI to evaluate the most attractive SFR properties for sale while leveraging its property managers' property inspection, management and rental infrastructure and related data flows to identify and acquire higher yielding assets at any progression in the loan-to-REO cycle and in any geographical location into which RESI desires to expand. We intend to continue to build this infrastructure and employ regional teams that will focus on specified geographical areas and use their developed regional experience to continually build a better, more predictable model meant to achieve high rental yield portfolio growth with properties marked by strong stabilized occupancy rates and optimal economic returns.
|
•
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Relationships with the Property Managers and their Nationwide Property Management Infrastructures
. With the support of its Property Managers' nationwide vendor networks, we believe that RESI is strategically positioned to operate SFR properties across the United States at an attractive cost structure. These vendor networks have been developed over many years, and we believe the Property Managers' infrastructures would be difficult and expensive for certain of RESI's competitors and/or new market participants to replicate. We believe, therefore, that RESI's existing relationships with ASPS and MSR, along with their respective vendor networks, give RESI a distinct advantage in bidding on SFR portfolios.
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•
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Depth of Management Experience.
We believe the experience and technical expertise of our management team is one of RESI's key strengths. Our team has a broad and deep knowledge of the mortgage and real estate markets with decades of experience in real estate, mortgage trading, housing, financial services and asset management markets. Their experience in the real estate industry brings a wealth of understanding of the markets in which RESI operates and can help RESI build its portfolio in a manner that brings the highest potential returns to its stockholders. Management and its supporting teams have expertise and a multitude of contacts that enable us to source single-family rental assets through access to auctions and sellers of SFR assets and obtain financing to optimize available leverage. Due to our management team's expertise, RESI has been able to strategically sell non-performing and re-performing loans to create taxable income and sustain a strong dividend while also using the liquidity generated from these sales to increase its SFR portfolio by approximately 215% in 2016. We believe that our asset evaluation process and the experience and judgment of our executive management team in identifying, assessing, valuing and acquiring new residential rental properties and related assets will help RESI to appropriately value the residential rental assets at the time of purchase and to quickly and efficiently grow its portfolio.
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•
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Strong Understanding of Mortgage Loan Management
. Our key personnel have extensive experience with managing mortgage loan assets that allows RESI to capitalize on the servicing capabilities of its third party servicers and ensure cost effective servicing of its residential mortgage loan portfolios. We will continue to work closely with RESI's mortgage loan servicers as RESI resolves the mortgage loans that remain its portfolio.
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•
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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 Current 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 average invested capital while it has
4,500
or more Rental Properties;
|
•
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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
|
•
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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 quarter.
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(i)
|
2%
of all cash available for distribution by RESI to its stockholders and to us as incentive management fee (“available cash”) until the aggregate amount per share of available cash for the quarter (based on the average number of shares of RESI's common stock outstanding during the quarter), which we referred to as the “quarterly per share distribution amount,” exceeded
$0.161
, then
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(ii)
|
15%
of all additional available cash for the quarter until the quarterly per share distribution amount exceeded
$0.193
, then
|
(iii)
|
25%
of all additional available cash for the quarter until the quarterly per share distribution amount exceeded
$0.257
, and thereafter
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(iv)
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50%
of all additional available cash for the quarter.
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•
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RESI's SFR property and sub-performing and non-performing loan portfolios typically contain properties that are geographically dispersed, requiring a cost-effective nationwide property management system; we believe RESI is positioned to acquire single-family asset portfolios with large geographic dispersion;
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•
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ASPS provides RESI with a low-cost source for full lifecycle rental property management services, including due diligence and acquisition support (i.e., title work, inspections and settlement), renovations and repairs, lease marketing, tenant management and customer care;
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•
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ASPS's rental marketing strategy is specifically designed to advertise listings across popular industry-focused websites, utilizing their high organic and paid search rankings to generate large volumes of prospective tenants;
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•
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ASPS's contracted relationships with nationwide manufacturers and material suppliers enable RESI to manage the ordering and delivery of flooring, appliances, paint, fixtures and lighting for all renovation and unit turn work (i.e. work associated with turnover from one tenant to the next);
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•
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We have direct access to ASPS's inspection and estimating application which is utilized by the third-party general contracting vendors to identify required renovation work and prepare detailed scopes of work to provide a consistent end product. In addition, this application catalogs major HVAC systems, appliances and construction materials, which can enable more accurate forecasting of long term maintenance requirements; and
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•
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Ongoing tenant management services are coordinated through an internal “24x7” customer service center.
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•
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As of
December 31, 2016
, MSR managed approximately 11,000 homes and has substantial experience in approximately 20 of RESI's current and target markets.
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•
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MSR provides RESI with a cost-effective renovation solution through its internal renovation and maintenance structure as well as its external vendor network. MSR has a team of dedicated personnel to oversee renovations of properties based on the approved bid prepared by an MSR inspector. All work is scheduled through local MSR personnel and MSR-certified contractors utilizing a pre-set market specific price list. MSR has negotiated substantial quantity discounts in each of its markets for products that it regularly uses during the renovation process, such as paint, appliances, HVAC systems, window blinds, carpet and flooring. MSR has also established and enforces best practices and quality consistency, reducing the costs of both materials and labor.
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•
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MSR's market analysis capabilities help RESI to optimize the yields on its SFR portfolio. MSR's in-house leasing agents work closely with its investment team to establish rental rates utilizing proprietary technology and input from its local leasing team. In establishing rental rates, MSR performs a competitive analysis of rents, the size and age of the property and many qualitative factors, such as neighborhood characteristics and access to quality schools, transportation and services.
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•
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MSR has an extensive in-house property management infrastructure, with technology systems, corporate process oversight and local personnel in the markets in which it operates. In these markets, property managers who are employees of MSR execute all property management functions. In addition, as part of its ongoing property management, MSR's in-house technicians conduct routine repairs and maintenance as appropriate to maximize long-term rental income and cash flows from all of the properties it manages. In addition, MSR's local property management teams make periodic neighborhood visits to monitor the condition of the homes and to ensure compliance with HOA rules and regulations.
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•
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MSR also manages property repairs and maintenance and tenant relations through a centralized call center, which offers a 24/7 emergency line to handle after hours issues, or through its web-based tenant platform. The maintenance call center technicians are trained to perform first level phone diagnosis and instruct self-service for minor issues to avoid on-site maintenance visits where possible. Maintenance vendors or in-house maintenance technicians are dispatched through our central maintenance call center depending on the severity of the repair.
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•
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the financial soundness of institutions with which RESI plans to transact business and recommendations with respect thereto;
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•
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RESI’s risk exposure limits with respect to the dollar amounts of total exposure with a given institution; and
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•
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investment accounts and trading accounts to be opened with banks, broker-dealers and financial institutions.
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•
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No investment will be made that would cause RESI or any of its subsidiaries to fail to qualify as a REIT for U.S. federal income tax purposes;
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•
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No investment will be made that would cause RESI to be required to register as an investment company under the Investment Company Act of 1940 (the “Investment Company Act”); and
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•
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Until appropriate investments can be identified, RESI may invest available cash in interest-bearing and short-term investments that are consistent with (a) RESI’s intention to qualify as a REIT and (b) RESI’s exemption from registration as an investment company under the Investment Company Act.
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•
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a number of our competitors may have greater financial, technical, marketing and other resources and more personnel than we do;
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•
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our clients may not perform as well as the clients of our competitors;
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•
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several of our competitors and their clients have significant amounts of capital, and many of them have similar management objectives to ours, which may create additional competition for management opportunities;
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•
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some of these competitors' clients may also have a lower cost of capital and access to funding sources that are not available to our clients, which may create competitive disadvantages for us with respect to funding opportunities;
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•
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some of our competitors' clients may have higher risk tolerances, different risk assessments or lower return thresholds, which could allow them to facilitate the acquisition and management by their clients of a wider variety of assets and allow them to advise their clients to bid more aggressively than our clients for assets on which we would advise our clients to bid;
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•
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there are relatively few barriers to entry impeding new asset management firms, and the successful efforts of new entrants into the asset management business is expected to continue to result in increased competition;
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•
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some of our competitors may have better expertise or be regarded by potential clients as having better expertise with regard to specific assets and
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•
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other industry participants will from time to time seek to recruit members of our management team and other employees away from us.
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•
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we may become subject to current United States federal income taxation on our net income from sources within the United States;
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•
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we may be subject to United States federal income tax on a portion of our net investment income, regardless of its source;
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•
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we may not be entitled to deduct certain expenses that would otherwise be deductible from the income subject to United States taxation and
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•
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we may be subject to United States branch profits tax on profits deemed to have been distributed out of the United States.
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•
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variations in actual or anticipated results of our operations, liquidity or financial condition;
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•
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changes in, or the failure to meet, our financial estimates or those of by securities analysts;
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•
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actions or announcements by our competitors;
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•
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potential conflicts of interest, or the discontinuance of our strategic relationships with RESI, ASPS and/or MSR;
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•
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actual or anticipated accounting problems;
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•
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regulatory actions;
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•
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lack of liquidity;
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•
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changes in the financial condition or stock price of RESI;
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•
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changes in the market outlook for the real estate, mortgage or housing markets;
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•
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technology changes in our business;
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•
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changes in interest rates that lead purchasers of our common stock to demand a higher yield;
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•
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actions by our stockholders;
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•
|
speculation in the press or investment community;
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•
|
general market, economic and political conditions, including an economic slowdown or dislocation in the global credit markets;
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•
|
failure to maintain the listing of our common stock on the NYSE MKT;
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•
|
failure of RESI to qualify or maintain qualification as a REIT;
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•
|
failure of RESI to maintain its exemption from registration under the Investment Company Act;
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•
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changes in accounting principles;
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•
|
passage of legislation or other regulatory developments that adversely affect us or our industry; and
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•
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departure of our key personnel.
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•
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a tightening of credit that has made it more difficult to finance a home purchase, combined with efforts by consumers generally to reduce their exposure to credit;
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•
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economic and employment conditions that have increased foreclosure rates; and
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•
|
reduced real estate values that challenged the traditional notion that homeownership is a stable investment.
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•
|
joblessness or unemployment rates that adversely affect the local economy;
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•
|
an oversupply of or a reduced demand for SFR properties for rent;
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•
|
a decline in employment or lack of employment growth;
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•
|
the inability or unwillingness of residents to pay rent increases or fulfill their lease obligations;
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•
|
a decline in rental rate, which may be accentuated since we expect RESI to generally have rent terms of one to two years;
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•
|
rent control or rent stabilization laws or other laws regulating housing that could prevent us from raising rents to offset increases in operating costs;
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•
|
changes in interest rates and availability and terms of debt financing; and
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•
|
economic conditions that could cause an increase in RESI's operating expenses such as increases in property taxes, utilities and routine maintenance.
|
•
|
limitations on capital structure;
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•
|
restrictions on specified investments;
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•
|
restrictions on leverage or senior securities;
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•
|
restrictions on unsecured borrowings;
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•
|
prohibitions on transactions with affiliates and
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•
|
compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would significantly increase RESI's operating expenses.
|
•
|
RESI would not be allowed a deduction for dividends paid to stockholders in computing its taxable income;
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•
|
RESI could be subject to the federal alternative minimum tax to a greater extent and possibly increased state and local taxes; and
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•
|
Unless RESI is entitled to relief under certain federal income tax laws, it could not re-elect REIT status until the fifth calendar year after the year in which it failed to qualify as a REIT. In addition, if RESI fails to qualify as a REIT, it will no longer be required to make distributions.
|
|
|
2016
|
|
2015
|
||||||||||||
Quarter ended
|
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||
March 31
|
|
$
|
20.01
|
|
|
$
|
11.77
|
|
|
$
|
342.85
|
|
|
$
|
156.33
|
|
June 30
|
|
24.37
|
|
|
12.20
|
|
|
259.95
|
|
|
140.50
|
|
||||
September 30
|
|
18.50
|
|
|
12.55
|
|
|
147.10
|
|
|
23.55
|
|
||||
December 31
|
|
57.75
|
|
|
21.18
|
|
|
38.00
|
|
|
11.34
|
|
|
|
(a) Total Number of Shares Purchased
|
|
(b) Average Price Paid per Share (1)
|
|
(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 (2)
|
||||||
October 1, 2016 to October 31, 2016
|
|
58,099
|
|
|
$
|
30.64
|
|
|
1,009,196
|
|
|
$
|
41,865
|
|
November 1, 2016 to November 30, 2016
|
|
—
|
|
|
—
|
|
|
1,009,196
|
|
|
41,865
|
|
||
December 1, 2016 to December 31, 2016
|
|
100,000
|
|
|
24.00
|
|
|
1,109,196
|
|
|
39,465
|
|
||
For the quarter ended December 31, 2016
|
|
158,099
|
|
|
$
|
26.44
|
|
|
1,109,196
|
|
|
$
|
39,465
|
|
(1)
|
Since Board approval of repurchases is based on dollar amount, we cannot estimate the number of shares yet to be purchased.
|
|
|
For the period from December 13, 2012 to December 31,
|
||||||||||||||||||
Index
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
||||||||||
Altisource Asset Management Corporation
|
|
$
|
546.67
|
|
|
$
|
6,200.00
|
|
|
$
|
2,067.47
|
|
|
$
|
114.40
|
|
|
$
|
356.67
|
|
S&P 500
|
|
100.47
|
|
|
130.22
|
|
|
145.05
|
|
|
144.00
|
|
|
157.73
|
|
|||||
Dow Jones U.S. Asset Manager Index
|
|
102.86
|
|
|
147.79
|
|
|
159.28
|
|
|
140.23
|
|
|
152.29
|
|
|
Year ended December 31, 2016
|
|
Year ended
December 31, 2015 |
|
Year ended
December 31, 2014
|
|
Year ended
December 31, 2013
|
|
March 15, 2012 (inception) to December 31, 2012
|
||||||||||
Total revenue
|
$
|
19,991
|
|
|
$
|
248,099
|
|
|
$
|
423,298
|
|
|
$
|
72,297
|
|
|
$
|
—
|
|
Net (loss) income attributable to common stockholders
|
(4,935
|
)
|
|
(3,290
|
)
|
|
59,679
|
|
|
(5,293
|
)
|
|
(46
|
)
|
|||||
(Loss) earnings per basic share
|
(2.93
|
)
|
|
(1.59
|
)
|
|
26.31
|
|
|
(2.26
|
)
|
|
(0.02
|
)
|
|||||
(Loss) earnings per diluted share
|
(2.93
|
)
|
|
(1.59
|
)
|
|
21.07
|
|
|
(2.26
|
)
|
|
(0.02
|
)
|
|
December 31, 2016
|
|
December 31, 2015
|
|
December 31, 2014
|
|
December 31, 2013
|
|
December 31, 2012
|
||||||||||
Total assets
|
$
|
65,748
|
|
|
$
|
2,518,601
|
|
|
$
|
2,756,447
|
|
|
$
|
1,402,811
|
|
|
$
|
105,815
|
|
Repurchase and loan agreements
|
—
|
|
|
763,369
|
|
|
1,013,133
|
|
|
600,089
|
|
|
—
|
|
|||||
Other secured borrowings
|
—
|
|
|
502,599
|
|
|
321,698
|
|
|
—
|
|
|
—
|
|
•
|
In April 2016, we increased the size of RESI's loan facility with Nomura Corporate Funding Americas, LLC (“Nomura”) from $200 million to $250 million and extended the facility for an additional year to April 2017;
|
•
|
In November 2016, we increased the size of RESI's repurchase facility with Credit Suisse (“CS”) from $350.0 million to $600.0 million (subject to scheduled reductions of available financing), improved RESI's loan-to-value rates and extended the facility to November 2017; and
|
•
|
In order to optimize RESI's cash flow and leverage, concurrently with the CS amendment in November 2016, we assisted RESI in the termination of its repurchase agreement with Wells Fargo, National Association (“Wells”).
|
•
|
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 Current 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 average 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 quarter.
|
i.
|
Rental revenues.
Minimum contractual rents from leases were recognized on a straight-line basis over the terms of the leases in residential rental revenues. Therefore, actual amounts billed in accordance with the lease during any given period may have been higher or lower than the amount of rental revenue recognized for the period.
|
ii.
|
Net realized gain on mortgage loans.
RESI recorded net realized gains, including the reclassification of previously accumulated net unrealized gains, upon the liquidation of a loan, which may have consisted of short sale, third party sale of the underlying property, refinancing or full debt pay-off of the loan.
|
iii.
|
Change in unrealized gains from the conversion of loans to REO.
Upon conversion of loans to REO, RESI marked the properties to the then-most recent market value. The difference between the carrying value of the asset at the time of conversion and the then-most recent market value, based on broker price opinions (“BPOs”), was recorded in RESI's statement of operations as change in unrealized gain on mortgage loans.
|
iv.
|
Change in unrealized gains from the change in fair value of loans.
After RESI's sub-performing and non-performing mortgage loans were acquired, the fair value of each loan was adjusted in each subsequent reporting period as the loan proceeded to a particular resolution (i.e., modification or conversion to real estate owned). As a loan approached resolution, the resolution timeline for that loan decreased and costs embedded in the discounted cash flow model for loan servicing, foreclosure costs and property insurance were incurred and removed from future expenses. The shorter resolution timelines and reduced future expenses each increased the fair value of the loan. The increase in the value of the loan was recognized in change in unrealized gain on mortgage loans in RESI's statements of operations.
|
v.
|
Net realized gain on real estate.
REO properties that did not meet RESI's investment criteria were sold out of its taxable REIT subsidiary. The realized gain or loss recognized in financial statements reflects the net amount of realized and unrealized gains on sold REOs from the time of acquisition to sale completion.
|
|
RESI (GAAP)
|
|
NewSource Stand-alone (Non-GAAP)
|
|
AAMC Stand-alone
(Non-GAAP)
|
|
Consolidating Entries
|
|
AAMC Consolidated (GAAP)
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
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
|
|
|||||
Conversion fee
|
—
|
|
|
—
|
|
|
1,037
|
|
|
(1,037
|
)
|
|
—
|
|
|||||
Base management fee
|
—
|
|
|
—
|
|
|
14,565
|
|
|
(14,565
|
)
|
|
—
|
|
|||||
Incentive management fee
|
—
|
|
|
—
|
|
|
7,994
|
|
|
(7,994
|
)
|
|
—
|
|
|||||
Expense reimbursements
|
—
|
|
|
—
|
|
|
750
|
|
|
(750
|
)
|
|
—
|
|
|||||
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
|
)
|
|
RESI (GAAP)
|
|
NewSource Stand-alone (Non-GAAP)
|
|
AAMC Stand-alone
(Non-GAAP)
|
|
Consolidating Entries
|
|
AAMC Consolidated (GAAP)
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Rental revenues
|
$
|
1,564
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,564
|
|
Change in unrealized gain on mortgage loans
|
350,822
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
350,822
|
|
|||||
Net realized gain on mortgage loans
|
55,766
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55,766
|
|
|||||
Net realized gain on mortgage loans held for sale
|
2,771
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,771
|
|
|||||
Net realized gain on real estate
|
9,482
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,482
|
|
|||||
Interest income
|
2,893
|
|
|
156
|
|
|
—
|
|
|
(156
|
)
|
|
2,893
|
|
|||||
Base management fee
|
—
|
|
|
—
|
|
|
941
|
|
|
(941
|
)
|
|
—
|
|
|||||
Incentive management fee
|
—
|
|
|
—
|
|
|
67,949
|
|
|
(67,949
|
)
|
|
—
|
|
|||||
Expense reimbursements
|
—
|
|
|
—
|
|
|
6,070
|
|
|
(6,070
|
)
|
|
—
|
|
|||||
Total revenues
|
423,298
|
|
|
156
|
|
|
74,960
|
|
|
(75,116
|
)
|
|
423,298
|
|
|||||
Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Salaries and employee benefits
|
—
|
|
|
—
|
|
|
5,217
|
|
|
—
|
|
|
5,217
|
|
|||||
Legal and professional fees
|
4,657
|
|
|
152
|
|
|
2,352
|
|
|
—
|
|
|
7,161
|
|
|||||
Residential property operating expenses
|
26,018
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26,018
|
|
|||||
Real estate depreciation and amortization
|
1,067
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,067
|
|
|||||
Selling costs and impairment
|
21,788
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,788
|
|
|||||
Mortgage loan servicing costs
|
68,181
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
68,181
|
|
|||||
Interest expense
|
35,812
|
|
|
—
|
|
|
—
|
|
|
(165
|
)
|
|
35,647
|
|
|||||
General and administrative
|
11,471
|
|
|
4,016
|
|
|
3,581
|
|
|
(6,070
|
)
|
|
12,998
|
|
|||||
Management fees
|
67,949
|
|
|
941
|
|
|
—
|
|
|
(68,890
|
)
|
|
—
|
|
|||||
Total expenses
|
236,943
|
|
|
5,109
|
|
|
11,150
|
|
|
(75,125
|
)
|
|
178,077
|
|
|||||
Other income
|
2,543
|
|
|
5,015
|
|
|
9
|
|
|
(2,160
|
)
|
|
5,407
|
|
|||||
Income before income taxes
|
188,898
|
|
|
62
|
|
|
63,819
|
|
|
(2,151
|
)
|
|
250,628
|
|
|||||
Income tax expense
|
45
|
|
|
—
|
|
|
2,051
|
|
|
—
|
|
|
2,096
|
|
|||||
Net income
|
188,853
|
|
|
62
|
|
|
61,768
|
|
|
(2,151
|
)
|
|
248,532
|
|
|||||
Net income attributable to non-controlling interest in consolidated affiliate
|
—
|
|
|
—
|
|
|
—
|
|
|
(188,853
|
)
|
|
(188,853
|
)
|
|||||
Net income attributable to stockholders
|
$
|
188,853
|
|
|
$
|
62
|
|
|
$
|
61,768
|
|
|
$
|
(191,004
|
)
|
|
$
|
59,679
|
|
|
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
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Preferred stock
|
—
|
|
|
—
|
|
|
249,133
|
|
|
—
|
|
|
249,133
|
|
|||||
Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
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
|
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
|
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
|
|
|
Year ended December 31, 2016
|
|
Year ended December 31, 2015
|
|
Year ended December 31, 2014
|
||||||
Net cash used in operating activities
|
$
|
(192
|
)
|
|
$
|
(183,237
|
)
|
|
$
|
(135,359
|
)
|
Net cash (used in) provided by investing activities (1)
|
(132,290
|
)
|
|
459,657
|
|
|
(974,920
|
)
|
|||
Net cash (used in) provided by financing activities
|
(11,478
|
)
|
|
(208,658
|
)
|
|
1,087,061
|
|
|||
Total cash flows
|
$
|
(143,960
|
)
|
|
$
|
67,762
|
|
|
$
|
(23,218
|
)
|
(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.
|
|
|
|
Amount Due during the Years ending December 31,
|
|
|
||||||||||||||
|
Total
|
|
2017
|
|
2018 - 2019
|
|
2020 - 2021
|
|
Thereafter
|
||||||||||
Operating leases (1) (2)
|
$
|
203,619
|
|
|
$
|
51,441
|
|
|
$
|
102,882
|
|
|
$
|
49,296
|
|
|
$
|
—
|
|
|
$
|
203,619
|
|
|
$
|
51,441
|
|
|
$
|
102,882
|
|
|
$
|
49,296
|
|
|
$
|
—
|
|
(1)
|
Excludes the operating lease related to the USVI property because the date upon which the five-year term will start is unknown.
|
(2)
|
Lease denominated in Indian rupees estimated at the exchange rate as of
December 31, 2016
.
|
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 Current Report on Form 8-K filed with the Commission on January 5, 2017).
|
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).
|
10.1
|
|
Asset Management Agreement, dated March 31, 2015, among Altisource Residential Corporation, Altisource Residential, L.P. and Altisource Asset Management Corporation (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed with the Commission on April 2, 2015).
|
10.2
|
|
Amendment to Asset Management Agreement, dated April 7, 2015, among Altisource Residential Corporation, Altisource Residential, L.P. and Altisource Asset Management Corporation (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed with the Commission on April 13, 2015).
|
10.3
|
|
Commercial Lease, dated April 16, 2015 by and between St. Croix Financial Center, Inc. and Altisource Asset Management Corporation (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed with the Commission on April 22, 2015).
|
10.4*†
|
|
Altisource Asset Management Corporation 2016 Preferred Stock Plan.
|
10.5†
|
|
Form of Preferred Stock Agreement under 2016 Employee Preferred Stock Plan (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed with the Commission on January 5, 2017).
|
21*
|
|
Schedule of Subsidiaries
|
23*
|
|
Consent of Deloitte & Touche LLP
|
24*
|
|
Power of Attorney (incorporated by reference to the signature page of this Annual Report on Form 10-K)
|
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:
|
March 1, 2017
|
By:
|
/s/
|
George G. Ellison
|
|
|
|
|
George G. Ellison
|
|
|
|
|
Chief Executive Officer
|
Date:
|
March 1, 2017
|
By:
|
/s/
|
Robin N. Lowe
|
|
|
|
|
Robin N. Lowe
|
|
|
|
|
Chief Financial Officer
|
Signature
|
|
Title
|
|
Date
|
/s/ George G. Ellison
|
|
Chairman of the Board of Directors and
Chief Executive Officer (Principal Executive Officer)
|
|
March 1, 2017
|
George G. Ellison
|
|
|
|
|
/s/ Paul T. Bossidy
|
|
Director
|
|
March 1, 2017
|
Paul T. Bossidy
|
|
|
|
|
/s/ Ricardo C. Byrd
|
|
Director
|
|
March 1, 2017
|
Ricardo C. Byrd
|
|
|
|
|
/s/ Dale Kurland
|
|
Director
|
|
March 1, 2017
|
Dale Kurland
|
|
|
|
|
/s/ Nathaniel Redleaf
|
|
Director
|
|
March 1, 2017
|
Nathaniel Redleaf
|
|
|
|
|
/s/ John P. de Jongh, Jr.
|
|
Director
|
|
March 1, 2017
|
John P. de Jongh, Jr.
|
|
|
|
|
/s/ Robin N. Lowe
|
|
Chief Financial Officer (Principal Financial Officer and
Principal Accounting Officer)
|
|
March 1, 2017
|
Robin N. Lowe
|
|
|
|
|
|
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 (Note 7)
|
—
|
|
|
—
|
|
||
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
|
|
|
Year ended December 31, 2016
|
|
Year ended December 31, 2015
|
|
Year ended December 31, 2014
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Management fees from RESI
|
$
|
17,334
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Conversion fees from RESI
|
1,841
|
|
|
—
|
|
|
—
|
|
|||
Expense reimbursements from RESI
|
816
|
|
|
—
|
|
|
—
|
|
|||
Rental revenues
|
—
|
|
|
13,233
|
|
|
1,564
|
|
|||
Change in unrealized gain on mortgage loans
|
—
|
|
|
88,829
|
|
|
350,822
|
|
|||
Net realized gain on mortgage loans
|
—
|
|
|
58,061
|
|
|
55,766
|
|
|||
Net realized gain on mortgage loans held for sale
|
—
|
|
|
36,432
|
|
|
2,771
|
|
|||
Net realized gain on real estate
|
—
|
|
|
50,932
|
|
|
9,482
|
|
|||
Interest income
|
—
|
|
|
612
|
|
|
2,893
|
|
|||
Total revenues
|
19,991
|
|
|
248,099
|
|
|
423,298
|
|
|||
Expenses:
|
|
|
|
|
|
||||||
Salaries and employee benefits
|
17,369
|
|
|
16,294
|
|
|
5,217
|
|
|||
Legal and professional fees
|
2,173
|
|
|
11,311
|
|
|
7,161
|
|
|||
Residential property operating expenses
|
—
|
|
|
66,266
|
|
|
26,018
|
|
|||
Real estate depreciation and amortization
|
—
|
|
|
7,472
|
|
|
1,067
|
|
|||
Selling costs and impairment
|
—
|
|
|
72,230
|
|
|
21,788
|
|
|||
Mortgage loan servicing costs
|
—
|
|
|
62,346
|
|
|
68,181
|
|
|||
Interest expense
|
—
|
|
|
53,131
|
|
|
35,647
|
|
|||
General and administrative
|
4,772
|
|
|
7,583
|
|
|
12,998
|
|
|||
Total expenses
|
24,314
|
|
|
296,633
|
|
|
178,077
|
|
|||
Other income:
|
|
|
|
|
|
||||||
Dividend income on RESI common stock
|
1,023
|
|
|
—
|
|
|
—
|
|
|||
Other income
|
71
|
|
|
—
|
|
|
5,407
|
|
|||
Total other income
|
1,094
|
|
|
—
|
|
|
5,407
|
|
|||
(Loss) income before income taxes
|
(3,229
|
)
|
|
(48,534
|
)
|
|
250,628
|
|
|||
Income tax expense
|
1,706
|
|
|
354
|
|
|
2,096
|
|
|||
Net (loss) income
|
(4,935
|
)
|
|
(48,888
|
)
|
|
248,532
|
|
|||
Net loss (income) attributable to non-controlling interest in consolidated affiliate
|
—
|
|
|
45,598
|
|
|
(188,853
|
)
|
|||
Net (loss) income attributable to stockholders
|
$
|
(4,935
|
)
|
|
$
|
(3,290
|
)
|
|
$
|
59,679
|
|
|
|
|
|
|
|
||||||
(Loss) earnings per share of common stock – basic:
|
|
|
|
|
|
||||||
(Loss) earnings per basic share
|
$
|
(2.93
|
)
|
|
$
|
(1.59
|
)
|
|
$
|
26.31
|
|
Weighted average common stock outstanding – basic
|
1,752,302
|
|
|
2,202,815
|
|
|
2,261,968
|
|
|||
|
|
|
|
|
|
||||||
(Loss) earnings per share of common stock – diluted:
|
|
|
|
|
|
||||||
(Loss) earnings per diluted share
|
$
|
(2.93
|
)
|
|
$
|
(1.59
|
)
|
|
$
|
21.07
|
|
Weighted average common stock outstanding – diluted
|
1,752,302
|
|
|
2,202,815
|
|
|
2,832,188
|
|
|
Year ended December 31, 2016
|
|
Year ended December 31, 2015
|
|
Year ended December 31, 2014
|
||||||
Net (loss) income attributable to stockholders
|
$
|
(4,935
|
)
|
|
$
|
(3,290
|
)
|
|
$
|
59,679
|
|
Other comprehensive loss:
|
|
|
|
|
|
||||||
Change in unrealized loss on available-for-sale securities (RESI common stock)
|
(1,681
|
)
|
|
—
|
|
|
—
|
|
|||
Total other comprehensive loss
|
(1,681
|
)
|
|
—
|
|
|
—
|
|
|||
Comprehensive (loss) income
|
$
|
(6,616
|
)
|
|
$
|
(3,290
|
)
|
|
$
|
59,679
|
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
(Accumulated Deficit) Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Treasury Stock
|
|
Non-controlling Interest in Consolidated Affiliate
|
|
Total Equity (Deficit)
|
|||||||||||||||||
|
Number of Shares
|
|
Amount
|
|
|
|
|
|
|
|||||||||||||||||||||
December 31, 2013
|
2,354,774
|
|
|
$
|
24
|
|
|
$
|
12,855
|
|
|
$
|
(5,339
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
785,427
|
|
|
$
|
792,967
|
|
Issuance of common stock, including option exercises
|
97,327
|
|
|
1
|
|
|
46
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|||||||
Treasury shares repurchased
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(245,468
|
)
|
|
—
|
|
|
(245,468
|
)
|
|||||||
Capital contribution from non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
468,429
|
|
|
468,429
|
|
|||||||
Distribution from non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(116,025
|
)
|
|
(116,025
|
)
|
|||||||
Amortization of preferred stock issuance costs
|
—
|
|
|
—
|
|
|
—
|
|
|
(166
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(166
|
)
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
1,251
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
227
|
|
|
1,478
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
59,679
|
|
|
—
|
|
|
—
|
|
|
188,853
|
|
|
248,532
|
|
|||||||
December 31, 2014
|
2,452,101
|
|
|
25
|
|
|
14,152
|
|
|
54,174
|
|
|
—
|
|
|
(245,468
|
)
|
|
1,326,911
|
|
|
1,149,794
|
|
|||||||
Issuance of common stock, including option exercises
|
104,727
|
|
|
1
|
|
|
72
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
73
|
|
|||||||
Treasury shares repurchased
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,516
|
)
|
|
—
|
|
|
(9,516
|
)
|
|||||||
Capital contribution from non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
111
|
|
|
111
|
|
|||||||
Distribution from non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(103,649
|
)
|
|
(103,649
|
)
|
|||||||
Repurchase of non-controlling interest in subsidiaries by affiliate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,983
|
)
|
|
(24,983
|
)
|
|||||||
Acquisition of non-controlling interest in affiliate
|
—
|
|
|
—
|
|
|
2,330
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,337
|
)
|
|
(5,007
|
)
|
|||||||
Amortization of preferred stock issuance costs
|
—
|
|
|
—
|
|
|
—
|
|
|
(206
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(206
|
)
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
6,865
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
184
|
|
|
7,049
|
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,290
|
)
|
|
—
|
|
|
—
|
|
|
(45,598
|
)
|
|
(48,888
|
)
|
|||||||
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
|
80,801
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|||||||
Treasury shares repurchased
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,500
|
)
|
|
—
|
|
|
(11,500
|
)
|
|||||||
Amortization of preferred stock issuance costs
|
—
|
|
|
—
|
|
|
—
|
|
|
(207
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(207
|
)
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
9,585
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,585
|
|
|||||||
Change in unrealized loss on available-for-sale securities (RESI common stock)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,681
|
)
|
|
—
|
|
|
—
|
|
|
(1,681
|
)
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,935
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,935
|
)
|
|||||||
December 31, 2016
|
2,637,629
|
|
|
$
|
26
|
|
|
$
|
30,696
|
|
|
$
|
46,145
|
|
|
$
|
(2,662
|
)
|
|
$
|
(266,484
|
)
|
|
$
|
—
|
|
|
$
|
(192,279
|
)
|
|
Year ended December 31, 2016
|
|
Year ended December 31, 2015
|
|
Year ended December 31, 2014
|
||||||
Operating activities:
|
|
|
|
|
|
||||||
Net (loss) income
|
$
|
(4,935
|
)
|
|
$
|
(48,888
|
)
|
|
$
|
248,532
|
|
Adjustments to reconcile net (loss) income to net cash used in operating activities:
|
|
|
|
|
|
||||||
Change in unrealized gain on mortgage loans
|
—
|
|
|
(88,829
|
)
|
|
(350,822
|
)
|
|||
Net realized gain on mortgage loans
|
—
|
|
|
(58,061
|
)
|
|
(55,766
|
)
|
|||
Net realized gain on mortgage loans held for sale
|
—
|
|
|
(36,432
|
)
|
|
(2,771
|
)
|
|||
Net realized gain of real estate
|
—
|
|
|
(50,932
|
)
|
|
(9,482
|
)
|
|||
Real estate depreciation and amortization
|
—
|
|
|
7,472
|
|
|
1,067
|
|
|||
Selling costs and impairment
|
—
|
|
|
72,230
|
|
|
21,788
|
|
|||
Accretion of interest on re-performing mortgage loans
|
—
|
|
|
(551
|
)
|
|
(2,610
|
)
|
|||
Share-based compensation
|
9,585
|
|
|
6,865
|
|
|
1,478
|
|
|||
Amortization of deferred financing costs
|
—
|
|
|
7,348
|
|
|
3,425
|
|
|||
Loss on retirement of leasehold improvements
|
—
|
|
|
212
|
|
|
—
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable, net
|
123
|
|
|
(21,919
|
)
|
|
(4,227
|
)
|
|||
Related party receivables
|
(5,266
|
)
|
|
17,491
|
|
|
8,199
|
|
|||
Prepaid expenses and other assets
|
68
|
|
|
(1,023
|
)
|
|
(1,106
|
)
|
|||
Deferred leasing costs
|
—
|
|
|
(88
|
)
|
|
—
|
|
|||
Accrued salaries and employee benefits
|
94
|
|
|
2,754
|
|
|
(287
|
)
|
|||
Accounts payable and accrued liabilities
|
2,319
|
|
|
15,283
|
|
|
3,937
|
|
|||
Related party payables
|
(2,180
|
)
|
|
(6,169
|
)
|
|
3,286
|
|
|||
Net cash used in operating activities
|
(192
|
)
|
|
(183,237
|
)
|
|
(135,359
|
)
|
|||
Investing activities:
|
|
|
|
|
|
||||||
Decrease in cash due to deconsolidation of RESI (Note 1)
|
(116,702
|
)
|
|
—
|
|
|
—
|
|
|||
Purchases of RESI common stock
|
(15,588
|
)
|
|
—
|
|
|
—
|
|
|||
Investment in mortgage loans
|
—
|
|
|
—
|
|
|
(1,265,890
|
)
|
|||
Investment in real estate
|
—
|
|
|
(119,977
|
)
|
|
(34,104
|
)
|
|||
Investment in renovations
|
—
|
|
|
(27,410
|
)
|
|
(12,721
|
)
|
|||
Investment in affiliate
|
—
|
|
|
(5,007
|
)
|
|
—
|
|
|||
Real estate tax advances
|
—
|
|
|
(29,862
|
)
|
|
(33,719
|
)
|
|||
Mortgage loan dispositions
|
—
|
|
|
468,111
|
|
|
334,366
|
|
|||
Mortgage loan payments
|
—
|
|
|
26,206
|
|
|
20,900
|
|
|||
Disposition of real estate
|
—
|
|
|
154,880
|
|
|
23,652
|
|
|||
Change in restricted cash
|
—
|
|
|
(7,284
|
)
|
|
(7,404
|
)
|
|||
Net cash (used in) provided by investing activities
|
(132,290
|
)
|
|
459,657
|
|
|
(974,920
|
)
|
|||
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
|
|
|
|
|
|
Altisource Asset Management Corporation
Consolidated Statements of Cash Flows (continued)
(In thousands)
|
|||||||||||
|
Year ended December 31, 2016
|
|
Year ended December 31, 2015
|
|
Year ended December 31, 2014
|
||||||
Financing activities:
|
|
|
|
|
|
||||||
Proceeds from issuance of preferred stock
|
—
|
|
|
—
|
|
|
250,000
|
|
|||
Cost of issuance of preferred stock
|
—
|
|
|
—
|
|
|
(1,237
|
)
|
|||
Issuance of common stock, including stock option exercises
|
593
|
|
|
833
|
|
|
12,389
|
|
|||
Repurchase of common stock
|
(11,500
|
)
|
|
(9,516
|
)
|
|
(245,468
|
)
|
|||
Payment of tax withholdings on exercise of stock options
|
(571
|
)
|
|
(760
|
)
|
|
(12,342
|
)
|
|||
Capital contribution from non-controlling interest
|
—
|
|
|
111
|
|
|
468,429
|
|
|||
Distribution to non-controlling interest
|
—
|
|
|
(98,123
|
)
|
|
(116,025
|
)
|
|||
Repurchase of non-controlling interest in subsidiaries by affiliate
|
—
|
|
|
(24,983
|
)
|
|
—
|
|
|||
Proceeds from issuance of other secured borrowings
|
—
|
|
|
220,931
|
|
|
324,426
|
|
|||
Repayments of other secured borrowings
|
—
|
|
|
(39,832
|
)
|
|
(344
|
)
|
|||
Proceeds from repurchase and loan agreements
|
—
|
|
|
347,077
|
|
|
1,094,042
|
|
|||
Repayments of repurchase and loan agreements
|
—
|
|
|
(594,564
|
)
|
|
(681,424
|
)
|
|||
Payment of deferred financing costs
|
—
|
|
|
(9,832
|
)
|
|
(5,385
|
)
|
|||
Net cash (used in) provided by financing activities
|
(11,478
|
)
|
|
(208,658
|
)
|
|
1,087,061
|
|
|||
Net (decrease) increase in cash and cash equivalents
|
(143,960
|
)
|
|
67,762
|
|
|
(23,218
|
)
|
|||
Cash and cash equivalents, beginning of the period
|
184,544
|
|
|
116,782
|
|
|
140,000
|
|
|||
Cash and cash equivalents, end of the period
|
$
|
40,584
|
|
|
$
|
184,544
|
|
|
$
|
116,782
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
—
|
|
|
$
|
46,559
|
|
|
$
|
31,053
|
|
Income taxes paid
|
132
|
|
|
265
|
|
|
2,778
|
|
|||
Transfer of mortgage loans to real estate owned, net
|
—
|
|
|
470,221
|
|
|
587,268
|
|
|||
Transfer of mortgage loans at fair value to mortgage loans held for sale
|
—
|
|
|
535,836
|
|
|
—
|
|
|||
Change in accrued capital expenditures
|
—
|
|
|
(1,388
|
)
|
|
4,151
|
|
|||
Changes in receivables from mortgage loan dispositions, payments and real estate tax advances, net
|
—
|
|
|
(592
|
)
|
|
10,024
|
|
|||
Changes in receivables from real estate owned dispositions
|
—
|
|
|
15,252
|
|
|
4,640
|
|
|||
Unpaid distribution to non-controlling interest
|
—
|
|
|
5,526
|
|
|
—
|
|
|
|
December 31, 2015
|
||||||||||
|
|
As Previously Reported
|
|
Adjustments
|
|
Current Presentation
|
||||||
Assets:
|
|
|
|
|
|
|
||||||
Deferred leasing and financing costs (1)
|
|
$
|
7,886
|
|
|
$
|
(7,886
|
)
|
|
$
|
—
|
|
Prepaid expenses and other assets (1)
|
|
2,458
|
|
|
711
|
|
|
3,169
|
|
|||
Liabilities:
|
|
|
|
|
|
|
||||||
Repurchase agreements
|
|
767,513
|
|
|
(4,144
|
)
|
|
763,369
|
|
|||
Other secured borrowings
|
|
505,630
|
|
|
(3,031
|
)
|
|
502,599
|
|
(1)
|
Upon adoption of ASU 2015-03, RESI reclassified its deferred leasing costs to prepaid expenses and other assets.
|
•
|
Level 1 -
Quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2 -
Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.
|
•
|
Level 3 -
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
|
|
Number of Loans
|
|
Carrying Value
|
|
Unpaid Principal Balance
|
|
Market Value of Underlying Properties
|
|||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|||||||
Current
|
|
730
|
|
|
$
|
124,595
|
|
|
$
|
165,645
|
|
|
$
|
177,348
|
|
30
|
|
80
|
|
|
12,003
|
|
|
18,142
|
|
|
21,858
|
|
|||
60
|
|
38
|
|
|
5,688
|
|
|
8,088
|
|
|
8,766
|
|
|||
90
|
|
984
|
|
|
130,784
|
|
|
216,717
|
|
|
196,963
|
|
|||
Foreclosure
|
|
3,907
|
|
|
687,464
|
|
|
946,962
|
|
|
917,671
|
|
|||
Mortgage loans at fair value
|
|
5,739
|
|
|
$
|
960,534
|
|
|
$
|
1,355,554
|
|
|
$
|
1,322,606
|
|
|
|
Number of Loans
|
|
Carrying Value
|
|
Unpaid Principal Balance
|
|
Market Value of Underlying Properties
|
|||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|||||||
Current
|
|
58
|
|
|
$
|
10,864
|
|
|
$
|
13,466
|
|
|
$
|
17,776
|
|
30
|
|
26
|
|
|
7,616
|
|
|
10,013
|
|
|
12,200
|
|
|||
60
|
|
6
|
|
|
668
|
|
|
775
|
|
|
1,063
|
|
|||
90
|
|
328
|
|
|
73,164
|
|
|
101,121
|
|
|
103,395
|
|
|||
Foreclosure
|
|
879
|
|
|
$
|
225,024
|
|
|
$
|
314,991
|
|
|
$
|
330,573
|
|
Mortgage loans held for sale
|
|
1,297
|
|
|
$
|
317,336
|
|
|
$
|
440,366
|
|
|
$
|
465,007
|
|
Accretable Yield
|
|
Year ended December 31, 2015
|
||
Balance at the beginning of the period
|
|
$
|
7,640
|
|
Loans sold
|
|
(4,943
|
)
|
|
Accretion
|
|
(551
|
)
|
|
Balance at the end of the period
|
|
$
|
2,146
|
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
Carrying Amount
|
|
Quoted Prices in Active Markets
|
|
Observable Inputs Other Than Level 1 Prices
|
|
Unobservable Inputs
|
||||||||
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
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
||||||||
RESI common stock
|
$
|
20,596
|
|
|
$
|
—
|
|
|
$
|
2,662
|
|
|
$
|
17,934
|
|
Total available-for-sale securities
|
$
|
20,596
|
|
|
$
|
—
|
|
|
$
|
2,662
|
|
|
$
|
17,934
|
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
Carrying Amount
|
|
Quoted Prices in Active Markets
|
|
Observable Inputs Other Than Level 1 Prices
|
|
Unobservable Inputs
|
||||||||
December 31, 2015
|
|
|
|
|
|
|
|
||||||||
Recurring basis (assets)
|
|
|
|
|
|
|
|
||||||||
Mortgage loans at fair value
|
$
|
960,534
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
960,534
|
|
Nonrecurring basis (assets)
|
|
|
|
|
|
|
|
||||||||
Real estate assets held for sale
|
250,557
|
|
|
—
|
|
|
—
|
|
|
250,557
|
|
||||
Not recognized on consolidated balance sheets at fair value (assets)
|
|
|
|
|
|
|
|
||||||||
Mortgage loans held for sale
|
317,336
|
|
|
—
|
|
|
—
|
|
|
317,336
|
|
||||
Not recognized on consolidated balance sheets at fair value (liabilities)
|
|
|
|
|
|
|
|
||||||||
Repurchase and loan agreements
|
763,369
|
|
|
—
|
|
|
767,513
|
|
|
—
|
|
||||
Other secured borrowings
|
502,599
|
|
|
—
|
|
|
502,268
|
|
|
—
|
|
|
Year ended December 31, 2015
|
||
Mortgage loans at fair value
|
|
||
Beginning balance
|
$
|
1,959,044
|
|
Change in unrealized gain on mortgage loans at fair value
|
177,545
|
|
|
Net realized gain on mortgage loans at fair value
|
58,061
|
|
|
Transfers of mortgage loans at fair value to mortgage loans held for sale
|
(535,836
|
)
|
|
Dispositions and payments of mortgage loans at fair value
|
(257,505
|
)
|
|
Real estate tax advances to borrowers
|
29,261
|
|
|
Transfer of mortgage loans at fair value to real estate owned, net
|
(470,036
|
)
|
|
Ending balance at December 31
|
$
|
960,534
|
|
|
|
||
Change in unrealized gain on mortgage loans at fair value held at the end of the period
|
$
|
78,453
|
|
Input
|
|
December 31, 2015
|
Equity discount rate
|
|
15.0%
|
Debt to asset ratio
|
|
65.0%
|
Cost of funds
|
|
3.5% over 1 month LIBOR
|
Annual change in home pricing index
|
|
0.0% to 10.2%
|
Loan resolution probabilities — modification
|
|
0% to 44.7%
|
Loan resolution probabilities — rental
|
|
0% to 100.0%
|
Loan resolution probabilities — liquidation
|
|
0% to 100.0%
|
Loan resolution timelines (in years)
|
|
0.1 to 5.6
|
Value of underlying properties
|
|
$3,000 - $4,500,000
|
|
|
Maximum Borrowing Capacity
|
|
Book Value of Collateral
|
|
Amount Outstanding
|
|
Amount of Available Funding
|
||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
Repurchase agreement due April 18, 2016
|
|
$
|
275,000
|
|
|
$
|
335,184
|
|
|
$
|
194,346
|
|
|
$
|
80,654
|
|
Repurchase agreement due September 27, 2017
|
|
750,000
|
|
|
708,275
|
|
|
371,130
|
|
|
378,870
|
|
||||
Repurchase agreement due March 11, 2016
|
|
54,944
|
|
|
130,863
|
|
|
54,944
|
|
|
—
|
|
||||
Loan agreement due April 8, 2016
|
|
200,000
|
|
|
204,578
|
|
|
147,093
|
|
|
52,907
|
|
||||
Less: deferred debt issuance costs
|
|
—
|
|
|
—
|
|
|
(4,144
|
)
|
|
—
|
|
||||
|
|
$
|
1,279,944
|
|
|
$
|
1,378,900
|
|
|
$
|
763,369
|
|
|
$
|
512,431
|
|
|
|
Interest Rate
|
|
Amount Outstanding
|
|||
December 31, 2015:
|
|
|
|
|
|||
ARLP Securitization Trust, Series 2014-1
|
|
|
|
|
|||
ARLP 2014-1 Class A Notes (1)
|
|
3.47
|
%
|
|
$
|
136,404
|
|
ARLP 2014-1 Class M Notes (1)
|
|
4.25
|
%
|
|
32,000
|
|
|
ARLP Securitization Trust, Series 2014-2
|
|
|
|
|
|||
ARLP 2014-2 Class A Notes (1)
|
|
3.63
|
%
|
|
244,935
|
|
|
ARLP 2014-2 Class M Notes (1)
|
|
—
|
%
|
|
234,010
|
|
|
ARLP Securitization Trust, Series 2015-1
|
|
|
|
|
|||
ARLP 2015-1 Class A Notes due May 25, 2055 (2)
|
|
4.01
|
%
|
|
203,429
|
|
|
ARLP 2015-1 Class M Notes due May 25, 2044
|
|
—
|
%
|
|
60,000
|
|
|
Intercompany eliminations
|
|
|
|
|
|||
Elimination of ARLP 2014-1 Class M Notes due to ARNS, Inc.
|
|
|
|
(32,000
|
)
|
||
Elimination of ARLP 2014-2 Class A Notes due to ARNS, Inc.
|
|
|
|
(45,138
|
)
|
||
Elimination of ARLP 2014-2 Class M Notes due to ARLP
|
|
|
|
(234,010
|
)
|
||
Elimination of ARLP 2015-1 Class A Notes due to ARNS, Inc.
|
|
|
|
(34,000
|
)
|
||
Elimination of ARLP 2015-1 Class M Notes due to ARLP
|
|
|
|
(60,000
|
)
|
||
Less: deferred debt issuance costs
|
|
|
|
(3,031
|
)
|
||
|
|
|
|
$
|
502,599
|
|
(1)
|
Terminated in March 2016.
|
(2)
|
The expected redemption date for the Class A Notes ranges from June 25, 2018 to June 25, 2019.
|
•
|
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 Current 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 average 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 quarter.
|
(i)
|
2%
of all cash available for distribution by RESI to its stockholders and to us as incentive management fee (“available cash”) until the aggregate amount per share of available cash for the quarter (based on the average number of shares of RESI's common stock outstanding during the quarter, the “quarterly per share distribution amount”) exceeded
$0.161
, then
|
(ii)
|
15%
of all additional available cash for the quarter until the quarterly per share distribution amount exceeded
$0.193
, then
|
(iii)
|
25%
of all additional available cash for the quarter until the quarterly per share distribution amount exceeded
$0.257
, and thereafter
|
(iv)
|
50%
of all additional available cash for the quarter,
|
|
Counterparty
|
|
Year ended December 31, 2016
|
|
Year ended December 31, 2015
|
|
Year ended December 31, 2014
|
||||||
Base management fees (1)
|
RESI
|
|
$
|
17,334
|
|
|
$
|
13,935
|
|
|
$
|
—
|
|
Conversion fees (1)
|
RESI
|
|
1,841
|
|
|
1,037
|
|
|
—
|
|
|||
Expense reimbursements (1)
|
RESI
|
|
816
|
|
|
750
|
|
|
6,070
|
|
|||
Incentive management fees (1)
|
RESI
|
|
—
|
|
|
7,994
|
|
|
67,949
|
|
|||
Professional fee sharing for negotiation of AMA (1)
|
RESI
|
|
—
|
|
|
2,000
|
|
|
—
|
|
|||
Residential property operating expenses
|
Ocwen/ASPS
|
|
—
|
|
|
—
|
|
|
21,612
|
|
|||
Mortgage loan servicing costs
|
Ocwen
|
|
—
|
|
|
—
|
|
|
65,363
|
|
|||
Salaries and employee benefits
|
Ocwen/ASPS
|
|
—
|
|
|
—
|
|
|
2,028
|
|
|||
General and administrative
|
Ocwen/ASPS
|
|
—
|
|
|
—
|
|
|
3,457
|
|
(1)
|
Prior to January 1, 2016, we eliminated these transactions upon consolidation (see
Note 1
).
|
|
|
December 31, 2016
|
|
Stock options outstanding
|
|
141,367
|
|
Possible future issuances under equity incentive plan
|
|
104,068
|
|
|
|
245,435
|
|
|
|
Number of Options
|
|
Weighted Average Exercise Price per Share
|
|||
December 31, 2013
|
|
281,221
|
|
|
$
|
1.11
|
|
Exercised
|
|
(41,685
|
)
|
|
1.16
|
|
|
Forfeited or canceled
|
|
(476
|
)
|
|
1.51
|
|
|
December 31, 2014
|
|
239,060
|
|
|
1.10
|
|
|
Exercised
|
|
(54,261
|
)
|
|
1.35
|
|
|
Forfeited or canceled
|
|
(3,097
|
)
|
|
4.14
|
|
|
December 31, 2015
|
|
181,702
|
|
|
0.98
|
|
|
Exercised
|
|
(39,396
|
)
|
|
0.80
|
|
|
Forfeited or canceled
|
|
(939
|
)
|
|
3.67
|
|
|
December 31, 2016
|
|
141,367
|
|
|
$
|
1.01
|
|
•
|
Twenty-five percent (
25%
) of the grant will vest in accordance with the vesting schedule set forth below if the market value of our stock meets both of the following conditions: (i) the market value has realized a compounded annual gain of at least twenty percent (
20%
) over the market value on the date of the grant and (ii) the market value is at least double the market value on the date of the grant;
|
•
|
Fifty percent (
50%
) of the grant will vest in accordance with the vesting schedule set forth below if the market value of our stock meets both of the following conditions: (i) the market value has realized a compounded annual gain of at least twenty-two and a half percent (
22.5%
) over the market value on the date of the grant and (ii) the market value is at least triple the market value on the date of the grant and
|
•
|
Twenty-five percent (
25%
) of the grant will vest in accordance with the vesting schedule set forth below if the market value of Company stock meets both of the following conditions: (i) the market value has realized a compounded annual gain of at least twenty-five percent (
25%
) over the market value on the date of the grant and (ii) the market value is at least quadruple the market value on the date of the grant.
|
•
|
After the performance hurdles have been achieved,
25%
of the restricted stock will vest on the first anniversary of the date that the performance hurdle for that tranche was met. The remaining
75%
of that tranche will either vest (i) on the second anniversary of the date that the performance hurdle was met for certain grants or (ii) ratably over the second, third and fourth anniversaries of the date that the performance hurdle was met for certain grants.
|
•
|
Twenty-five percent (
25%
) of the grant will vest in accordance with the vesting schedule set forth below if the market value of our stock meets all three of the following conditions: (i) the market value is at least equal to
$250 million
; (ii) the market value has realized a compounded annual gain of at least twenty percent (
20%
) over the market value on the date of the grant and (iii) the market value is at least double the market value on the date of the grant;
|
•
|
Fifty percent (
50%
) of the grant will vest in accordance with the vesting schedule set forth below if the market value of our stock meets all three of the following conditions: (i) the market value is at least equal to
$500 million
; (ii) the market value has realized a compounded annual gain of at least twenty-two and a half percent (
22.5%
) over the market value on the date of the grant and (iii) the market value is at least triple the market value on the date of the grant and
|
•
|
Twenty-five percent (
25%
) of the grant will vest in accordance with the vesting schedule set forth below if the market value of Company stock meets all three of the following conditions: (i) the market value is at least equal to
$750 million
; (ii) the market value has realized a compounded annual gain of at least twenty-five percent (
25%
) over the market value on the date of the grant and (iii) the market value is at least quadruple the market value on the date of the grant.
|
•
|
After the performance hurdles have been achieved,
25%
of the restricted stock will vest on each of the first four anniversaries of the date that the performance hurdles were met.
|
|
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value
|
|||
December 31, 2013
|
|
228,754
|
|
|
$
|
15.32
|
|
Granted
|
|
30,877
|
|
|
697.48
|
|
|
Vested (1)
|
|
(56,328
|
)
|
|
16.53
|
|
|
Forfeited or canceled
|
|
(27,814
|
)
|
|
294.59
|
|
|
December 31, 2014
|
|
175,489
|
|
|
90.51
|
|
|
Granted
|
|
53,531
|
|
|
174.34
|
|
|
Vested (1)
|
|
(51,305
|
)
|
|
11.53
|
|
|
Forfeited or canceled
|
|
(23,389
|
)
|
|
6.65
|
|
|
December 31, 2015
|
|
154,326
|
|
|
158.84
|
|
|
Granted
|
|
11,119
|
|
|
19.31
|
|
|
Vested (1)
|
|
(40,566
|
)
|
|
13.34
|
|
|
December 31, 2016
|
|
124,879
|
|
|
$
|
193.17
|
|
(1)
|
The vesting date fair value of restricted stock that vested during the years ended
December 31, 2016
,
2015
and
2014
was
$0.6 million
,
$11.6 million
and
$52.6 million
, respectively.
|
|
|
Year ended December 31, 2015
|
|
Year ended December 31, 2014
|
Risk free interest rate (1)
|
|
2.89% to 3.27%
|
|
3.07% to 3.73%
|
Common stock dividend yield (2)
|
|
0%
|
|
0%
|
Expected volatility (3)
|
|
92.04% to 96.46%
|
|
74.61% to 82.66%
|
(1)
|
Represents the interest rate as of the grant date on US treasury bonds having the same life as the estimated life of the restricted stock grants.
|
(2)
|
At the date of grant, we had no history of dividend payments.
|
(3)
|
Based on the historical volatility of comparable companies, adjusted for our expected additional cash flow volatility.
|
|
|
Year ended December 31, 2016
|
|
Year ended December 31, 2015
|
|
Year ended December 31, 2014
|
||||||
U.S. Virgin Islands
|
|
$
|
(3,721
|
)
|
|
$
|
(1,249
|
)
|
|
$
|
70,670
|
|
Other
|
|
492
|
|
|
(1,687
|
)
|
|
(8,895
|
)
|
|||
(Loss) income before income taxes
|
|
$
|
(3,229
|
)
|
|
$
|
(2,936
|
)
|
|
$
|
61,775
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Stock compensation and other
|
|
$
|
880
|
|
|
$
|
531
|
|
Accrued expenses
|
|
475
|
|
|
387
|
|
||
Real estate and mortgage loan fair value adjustments
|
|
—
|
|
|
1,492
|
|
||
Available-for-sale securities
|
|
1,027
|
|
|
—
|
|
||
Other
|
|
21
|
|
|
6
|
|
||
Net operating loss
|
|
—
|
|
|
21,592
|
|
||
|
|
2,403
|
|
|
24,008
|
|
||
Deferred tax liability:
|
|
|
|
|
||||
Depreciation
|
|
5
|
|
|
4
|
|
||
|
|
2,398
|
|
|
24,004
|
|
||
Valuation allowance
|
|
(2,377
|
)
|
|
(23,100
|
)
|
||
Deferred tax asset, net
|
|
$
|
21
|
|
|
$
|
904
|
|
|
Year ended December 31, 2016
|
|
Year ended December 31, 2015
|
|
Year ended December 31, 2014
|
||||||
Numerator
|
|
|
|
|
|
||||||
Net (loss) income
|
$
|
(4,935
|
)
|
|
$
|
(3,290
|
)
|
|
$
|
59,679
|
|
Amortization of preferred stock issuance costs
|
(207
|
)
|
|
(206
|
)
|
|
(166
|
)
|
|||
Numerator for basic EPS - (loss) income available to common stockholders
|
(5,142
|
)
|
|
(3,496
|
)
|
|
59,513
|
|
|||
Add back amortization of preferred stock issuance costs
|
—
|
|
|
—
|
|
|
166
|
|
|||
Numerator for diluted EPS - (loss) income available to common stockholders after assumed conversions
|
$
|
(5,142
|
)
|
|
$
|
(3,496
|
)
|
|
$
|
59,679
|
|
|
|
|
|
|
|
||||||
Denominator
|
|
|
|
|
|
||||||
Weighted average common stock outstanding – basic
|
1,752,302
|
|
|
2,202,815
|
|
|
2,261,968
|
|
|||
Stock options using treasury method
|
—
|
|
|
—
|
|
|
251,967
|
|
|||
Restricted stock
|
—
|
|
|
—
|
|
|
160,475
|
|
|||
Preferred shares, if converted
|
—
|
|
|
—
|
|
|
157,778
|
|
|||
Weighted average common stock outstanding – diluted
|
1,752,302
|
|
|
2,202,815
|
|
|
2,832,188
|
|
|||
|
|
|
|
|
|
||||||
(Loss) earnings per basic share
|
$
|
(2.93
|
)
|
|
$
|
(1.59
|
)
|
|
$
|
26.31
|
|
(Loss) earnings per diluted share
|
$
|
(2.93
|
)
|
|
$
|
(1.59
|
)
|
|
$
|
21.07
|
|
|
Year ended December 31, 2016
|
|
Year ended December 31, 2015
|
|
Year ended December 31, 2014
|
||||||
Numerator
|
|
|
|
|
|
||||||
Amortization of preferred stock issuance costs
|
$
|
207
|
|
|
$
|
206
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Denominator
|
|
|
|
|
|
||||||
Stock options
|
165,983
|
|
|
222,566
|
|
|
—
|
|
|||
Restricted stock
|
40,476
|
|
|
85,121
|
|
|
—
|
|
|||
Preferred stock, if converted
|
200,000
|
|
|
200,000
|
|
|
—
|
|
|
2016
|
||||||||||||||||||
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
|
Full Year
|
||||||||||
Total revenues (1)
|
$
|
4,526
|
|
|
$
|
5,407
|
|
|
$
|
4,854
|
|
|
$
|
5,204
|
|
|
$
|
19,991
|
|
Net loss
|
(940
|
)
|
|
(1,261
|
)
|
|
(1,071
|
)
|
|
(1,663
|
)
|
|
(4,935
|
)
|
|||||
Loss per share of common stock – basic
|
(0.50
|
)
|
|
(0.74
|
)
|
|
(0.67
|
)
|
|
(1.09
|
)
|
|
(2.93
|
)
|
|||||
Loss per share of common stock – diluted
|
(0.50
|
)
|
|
(0.74
|
)
|
|
(0.67
|
)
|
|
(1.09
|
)
|
|
(2.93
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
2015
|
||||||||||||||||||
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
|
Full Year
|
||||||||||
Total revenues
|
$
|
88,915
|
|
|
$
|
76,519
|
|
|
$
|
58,523
|
|
|
$
|
24,142
|
|
|
$
|
248,099
|
|
Net income (loss)
|
6,888
|
|
|
743
|
|
|
(1,980
|
)
|
|
(8,941
|
)
|
|
(3,290
|
)
|
|||||
Earnings (loss) per share of common stock – basic
|
3.10
|
|
|
0.31
|
|
|
(0.92
|
)
|
|
(4.12
|
)
|
|
(1.59
|
)
|
|||||
Earnings (loss) per share of common stock – diluted
|
2.50
|
|
|
0.27
|
|
|
(0.92
|
)
|
|
(4.12
|
)
|
|
(1.59
|
)
|
(1)
|
Total revenues have been corrected for the first, second and third quarters of 2016 to reflect the amounts previously reported as interest and dividend income within operating revenues of
$294,000
,
$247,000
and
$248,000
, respectively, as other income. Net loss was not affected for any period.
|
1 Year Altisource Asset Managem... Chart |
1 Month Altisource Asset Managem... Chart |
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