Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 17, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-36063 | ||
Entity Registrant Name | Altisource Asset Management Corporation | ||
Entity Incorporation, State or Country Code | VI | ||
Entity Tax Identification Number | 66-0783125 | ||
Entity Address, Address Line One | 5100 Tamarind Reef | ||
Entity Address, City or Town | Christiansted | ||
Entity Address, Country | VI | ||
Entity Address, Postal Zip Code | 00820 | ||
City Area Code | 704 | ||
Local Phone Number | 275-9113 | ||
Title of 12(b) Security | Common stock, par value $0.01 per share | ||
Trading Symbol | AAMC | ||
Security Exchange Name | NYSEAMER | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 10.5 | ||
Entity Common Stock, Shares Outstanding | 1,760,827 | ||
Documents Incorporated by Reference | Portions of the Registrant's definitive proxy statement relating to its 2023 annual meeting of shareholders (the “2023 Proxy Statement”) are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. The Registrant intends to file the 2023 Proxy Statement with the U.S. Securities and Exchange Commission not later than 120 days after the end of the fiscal year to which this report relates. | ||
Entity Central Index Key | 0001555074 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Auditor Information [Abstract] | |
Auditor Firm ID | 42 |
Auditor Name | Ernst & Young LLP |
Auditor Location | Atlanta, Georgia |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
ASSETS | ||
Loans held for sale, at fair value | $ 11,593 | $ 0 |
Loans held for investment, at fair value | 83,143 | 0 |
Cash and cash equivalents | 10,727 | 78,349 |
Restricted cash | 2,047 | 0 |
Other assets | 10,137 | 3,127 |
Total assets | 117,647 | 81,476 |
Liabilities | ||
Accrued expenses and other liabilities | 10,349 | 7,145 |
Lease liabilities | 1,323 | 859 |
Credit facility | 51,653 | 0 |
Total liabilities | 63,325 | 8,004 |
Commitments and contingencies | ||
Redeemable preferred stock: | ||
Preferred stock, $0.01 par value, 250,000 shares authorized as of December 31, 2022 and December 31, 2021. 144,212 shares issued and outstanding and $144,212 redemption value as of December 31, 2022 and 150,000 shares issued and outstanding and $150,000 redemption value as of December 31, 2021. | 144,212 | 150,000 |
Stockholders' deficit: | ||
Common stock, $.01 par value, 5,000,000 authorized shares; 3,432,294 and 1,783,862 shares issued and outstanding, respectively, as of December 31, 2022 and 3,416,541 and 2,055,561 shares issued and outstanding, respectively, as of December 31, 2021. | 34 | 34 |
Additional paid-in capital | 149,010 | 143,523 |
Retained earnings | 41,516 | 57,450 |
Accumulated other comprehensive income | 20 | 54 |
Treasury stock, at cost, 1,648,432 shares as of December 31, 2022 and 1,360,980 shares as of December 31, 2021. | (280,470) | (277,589) |
Total stockholders' deficit | (89,890) | (76,528) |
Total Liabilities and Equity | $ 117,647 | $ 81,476 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares issued (in shares) | 250,000 | 250,000 |
Preferred stock, shares outstanding (in shares) | 144,212 | 150,000 |
Preferred stock, redemption amount | $ 144,212,000 | $ 150,000,000 |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Common stock, shares issued (in shares) | 3,432,294 | 3,416,541 |
Common stock, shares outstanding (in shares) | 1,783,862 | 2,055,561 |
Treasury stock, shares (in shares) | 1,648,432 | 1,360,980 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues from discontinued operations: | ||
Loan interest income | $ 4,579 | $ 0 |
Loan fee income | 353 | 0 |
Servicing fee revenue | 33 | 0 |
Total revenues | 4,965 | 0 |
Expenses: | ||
Salaries and employee benefits | 5,839 | 5,635 |
Legal fees | 4,349 | 6,885 |
Professional fees | 1,901 | 1,531 |
General and administrative | 3,545 | 2,573 |
Servicing and asset management expense | 683 | 0 |
Acquisition charges | 513 | 3,908 |
Interest expense | 1,328 | 60 |
Direct loan expense | 122 | 0 |
Loan sales and marketing expense | 338 | 0 |
Total expenses | 18,618 | 20,592 |
Other income from discontinued operations: | ||
Change in fair value of loans | (1,963) | 0 |
Change in fair value of equity securities | 0 | 146 |
Gain on sale of equity securities | 0 | 8,347 |
Dividend income | 0 | 3,061 |
Other | 32 | 94 |
Total other (expense) income | (1,931) | 11,648 |
Net loss from continuing operations before income tax | (15,584) | (8,944) |
Income tax expense | 350 | 3,273 |
Net loss from continuing operations | (15,934) | (12,217) |
Gain on sale of discontinued operations, net of tax expense | 0 | 6,213 |
Net loss attributable to common stockholders | (15,934) | (6,004) |
Continuing operations earnings per share | ||
Net loss from continuing operations | (15,934) | (12,217) |
Gain on preferred stock transaction | 5,122 | 87,961 |
Numerator for earnings per share from continuing operations | (10,812) | 75,744 |
Discontinued operations earnings per share | ||
Net income from discontinued operations | $ 0 | $ 6,213 |
Earnings per share of common stock - Basic: | ||
Continuing operations - basic ( in USD per share) | $ (5.64) | $ 37.83 |
Discontinued operations - basic (in USD per share) | 0 | 3.11 |
Earnings (loss) per basic common share (in USD per share) | $ (5.64) | $ 40.94 |
Weighted average common stock outstanding – basic (in shares) | 1,917,503 | 2,002,111 |
Earnings per share of common stock - Diluted: | ||
Continuing operations - diluted (in USD per share) | $ (5.64) | $ 35.03 |
Discontinued operations - diluted (in USD per share) | 0 | 2.87 |
Earnings (loss) per diluted common share (in USD per share) | $ (5.64) | $ 37.90 |
Weighted average common stock outstanding – diluted (in shares) | 1,917,503 | 2,162,378 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Income Statement [Abstract] | |
Income tax expense related to disposal | $ 1,272 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (15,934) | $ (6,004) |
Other comprehensive loss: | ||
Currency translation adjustments, net | (34) | (6) |
Total other comprehensive loss | (34) | (6) |
Comprehensive loss | $ (15,968) | $ (6,010) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock |
Beginning balance (in shares) at Dec. 31, 2020 | 2,966,207 | |||||
Beginning balance at Dec. 31, 2020 | $ (166,578) | $ 30 | $ 46,574 | $ 63,426 | $ (65) | $ (276,543) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common shares issued under share-based compensation plans, net of employee tax withholdings (in shares) | 162,051 | |||||
Common shares issued under share-based compensation plans, net of employee tax withholdings | (800) | $ 2 | (2) | (800) | ||
Shares withheld for taxes upon vesting of restricted stock | (27) | (27) | ||||
Share-based compensation | 1,720 | 1,939 | (219) | |||
Currency translation adjustments, net | (6) | (6) | ||||
Acquisition and disposition of subsidiaries | 153 | 28 | 125 | |||
Preferred stock conversion (in shares) | 288,283 | |||||
Preferred stock conversion | 95,014 | $ 2 | 95,012 | |||
Net loss | $ (6,004) | (6,004) | ||||
Ending balance (in shares) at Dec. 31, 2021 | 2,055,561 | 3,416,541 | ||||
Ending balance at Dec. 31, 2021 | $ (76,528) | $ 34 | 143,523 | 57,450 | 54 | (277,589) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common shares issued under share-based compensation plans, net of employee tax withholdings (in shares) | 15,753 | |||||
Common shares issued under share-based compensation plans, net of employee tax withholdings | 25 | $ 0 | 25 | 0 | ||
Treasury shares repurchased | (2,881) | (2,881) | ||||
Share-based compensation | 340 | 340 | 0 | |||
Currency translation adjustments, net | (34) | (34) | ||||
Preferred stock conversion (in shares) | 0 | |||||
Preferred stock conversion | 5,122 | $ 0 | 5,122 | |||
Net loss | $ (15,934) | (15,934) | ||||
Ending balance (in shares) at Dec. 31, 2022 | 1,783,862 | 3,432,294 | ||||
Ending balance at Dec. 31, 2022 | $ (89,890) | $ 34 | $ 149,010 | $ 41,516 | $ 20 | $ (280,470) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating activities: | ||
Net loss | $ (15,934,000) | $ (6,004,000) |
Less: Income from discontinued operations, net of tax | 0 | 6,213,000 |
Net loss from continuing operations | (15,934,000) | (12,217,000) |
Adjustments to reconcile net loss from continuing operations to net cash used in operating activities: | ||
Depreciation | 199,000 | 309,000 |
Share-based compensation | 340,000 | 1,939,000 |
Amortization of operating lease right-of-use assets | 241,000 | 139,000 |
Change in fair value of loans | 1,963,000 | 0 |
Dividend income | 0 | (3,061,000) |
Change in fair value of securities | 0 | (146,000) |
Gain on securities | 0 | (8,347,000) |
Changes in operating assets and liabilities, net of effects from discontinued operations and acquisitions of subsidiaries: | ||
Originations of held for sale loans | (8,843,000) | 0 |
Principal payments on held for sale loans | 1,061,000 | 0 |
Additional fundings of held for sale loans | (3,857,000) | 0 |
Interest receivable | (1,353,000) | 0 |
Amortization of deferred financing fees | 52,000 | 0 |
Other assets and liabilities | (933,000) | (5,145,000) |
Receivable from Front Yard | 0 | 3,414,000 |
Net cash used in continuing operations | (27,064,000) | (23,115,000) |
Net cash provided by discontinued operations | 0 | 5,439,000 |
Net cash used in operating activities | (27,064,000) | (17,676,000) |
Investing activities: | ||
Website development | (1,482,000) | 0 |
Purchase of loans held for investment | (99,087,000) | 0 |
Additional fundings of loans held for investment | (10,794,000) | 0 |
Principal payments on loans held for investment | 26,174,000 | 0 |
Purchase of equity securities | 0 | (96,950,000) |
Dividends received | 0 | 3,061,000 |
Proceeds from sale of interest in equity securities | 0 | 152,796,000 |
Investment in property and equipment | (60,000) | (511,000) |
Net cash (used in) provided by continuing operations | (85,249,000) | 58,396,000 |
Net cash provided by discontinued operations | 0 | 511,000 |
Net cash (used in) provided by investing activities | (85,249,000) | 58,907,000 |
Financing activities: | ||
Conversion of preferred stock | (1,893,000) | (3,763,000) |
Proceeds from borrowed funds | 95,197,000 | 28,549,000 |
Repayment of borrowed funds | (43,544,000) | (28,549,000) |
Deferred financing fees | (125,000) | 0 |
Proceeds and payment of tax withholding on exercise of stock options, net | 25,000 | 5,000 |
Shares withheld for taxes upon vesting of restricted stock | 0 | (1,046,000) |
Net payment from subsidiaries included in disposal group | 0 | (80,000) |
Repurchase of common stock | (2,881,000) | 0 |
Net cash provided by (used in) continuing operations | 46,779,000 | (4,884,000) |
Net cash provided by discontinued operations | 0 | 80,000 |
Net cash provided by (used in) financing activities | 46,779,000 | (4,804,000) |
Net change in cash and cash equivalents | (65,534,000) | 36,427,000 |
Effect of exchange rate changes on cash and cash equivalents | (41,000) | 115,000 |
Consolidated cash, cash equivalents and restricted cash, beginning of period | 78,349,000 | 41,807,000 |
Consolidated cash, cash equivalents and restricted, end of the period | 12,774,000 | 78,349,000 |
Supplemental disclosure of cash flow information (continuing and discontinued operations): | ||
Cash paid for interest | 873,000 | 60,000 |
Income taxes paid | 3,806,000 | 2,103,000 |
Right-of-use lease assets recognized - operating leases | 710,000 | 308,000 |
Operating lease liabilities recognized | 710,000 | 0 |
Reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets: | ||
Cash and cash equivalents | 10,727,000 | 78,349,000 |
Restricted cash | 2,047,000 | 0 |
Consolidated cash and cash equivalents | $ 12,774,000 | $ 78,349,000 |
Organization and Basis of Prese
Organization and Basis of Presentation | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | 1. Organization and Basis of Presentation Altisource Asset Management Corporation (“we,” “our,” “us,” “AAMC,” or the “Company”) was incorporated in the U.S. Virgin Islands (“USVI”) on March 15, 2012 (our “inception”), and commenced operations as an asset manager on December 21, 2012. As disclosed in our public filings, the Company’s prior business operations ceased in the first week of 2021. The Company previously operated as the external manager for Front Yard Residential Corporation (“Front Yard”), a public real estate investment trust (“REIT”) focused on acquiring and managing quality, affordable, single-family rental (“SFR”) properties throughout the United States. During 2021, AAMC engaged in a comprehensive assessment to either internally develop a new business operation or acquire a separate operating company. A range of industries were analyzed, including, but not limited to, real estate, lending cryptocurrency, block-chain technology and insurance operations. Outside professional firms, including among others, Cowen and Company, LLC, an investment bank, and Norton Rose Fulbright LLP, a global law practice, were engaged to provide due diligence, legal and valuation expertise to assist in our search. As of March 2022, the Company created the Alternative Lending Group (“ALG”), to generate alternative private credit loans through Direct to Borrower Lending, Wholesale Originations, and Correspondent Loan Acquisitions. The initial operations of ALG entail the following: • Build out a niche origination platform as well as a loan acquisition team; • Fund the originated or acquired alternative loans from a combination of Company equity and existing or future lines of credit; • Sell the originated and acquired alternative loans through forward commitment and repurchase contracts; • Leverage senior management’s expertise in this space; and • Utilize AAMC’s existing operations in India to drive controls and cost efficiencies. ALG's primary sources of income is derived from mortgage banking activities generated through the origination and acquisition of loans, and their subsequent sale or securitization as well as net interest income from loans while held on the balance sheet for investment. In addition, the Company has determined to focus operations solely on ALG for the foreseeable future. Based on current market conditions in the cryptocurrency industry the Company does not believe the timing is right to deploy resources to the cryptocurrency ATM business until the cryptocurrency market has reached some type of stabilization. Basis of presentation and use of estimates The accompanying audited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. All wholly owned subsidiaries are included, and all intercompany accounts and transactions have been eliminated. The Company changed its balance sheet presentation from classified (distinguishing between short-term and long-term accounts) to unclassified (no such distinction) in the second quarter of 2022. This change was prompted by the Company’s strategic decision to launch an alternative lending operation, ALG, in March 2022, as described above. The presentation of an unclassified balance sheet is consistent with that of the Company’s peers within the lending industry. Further, the previous classified presentation was not utilized to derive any metric by which the Company is measured or will be measured on a prospective basis. As the Company is now presenting an unclassified balance sheet, reclassification adjustments have been made to the historical Consolidated Balance Sheets at December 31, 2021 in order for it to conform with the current unclassified presentation. Use of estimates The preparation of 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Loans held for sale or investment, carried at fair market value We originate and purchase alternative loans. These loans will either be classified as held for investment or held for sale depending upon the determination of management. We have elected to measure these alternative loans at fair value on a loan by loan basis. This option is available when we first recognize a financial asset. Subsequent changes in the fair value of these loans will be recorded in our Consolidated Statements of Operations in the period of the change. Purchased loans, also known as correspondent loans, can be bought with a net strip interest component in that the seller of the loan will receive an agreed upon percentage of the coupon interest generated from the sold loan. This strip component is reflected as service and asset management expense on the Consolidated Statements of Operations. A fair value measurement represents the price at which an orderly transaction would occur between willing market participants at the measurement date. We estimate the fair values of the loans held for investment or sale based on available inputs from the marketplace. The market for the loans that we have or will invest in is generally illiquid. Establishing fair values for illiquid assets is inherently subjective and is often dependent upon our estimates and modeling assumptions. In circumstances where relevant market inputs cannot be obtained, increased analysis and management judgment are required to estimate fair value. This generally requires us to establish internal assumptions about future cash flows and appropriate risk-adjusted discount rates. Regardless of the valuation inputs we apply, the objective of fair value measurement for assets is unchanged from what it would be if markets were operating at normal activity levels and/or transactions were orderly; that is, to determine the current exit price. See Note 4 for further discussion on fair value measurements. Interest for these loans is recognized as revenue based on the stated coupon when earned and deemed collectible or until a loan becomes more than 90 days past due, at which point the loan is placed on nonaccrual status and any accrued interest is reversed against interest income. When a seriously delinquent loan previously placed on nonaccrual status has been cured, meaning all delinquent principal and interest have been remitted by the borrower, the loan will be placed back on accrual status. Interest accrued as of period end is included within loans held for sale, at fair value or loans held for investment, at fair value in the Consolidated Balance Sheets as applicable. Redeemable Preferred stock Issuance of Series A Convertible Preferred Stock in 2014 Private Placement During the first quarter of 2014, we issued 250,000 shares of convertible preferred stock for $250.0 million to institutional investors. Under the Certificate of Designations of the Series A Shares (the “Certificate”), we have the option to redeem all of the Series A Shares on March 15, 2020 and on each successive five-year anniversary of March 15, 2020 thereafter. In connection with these same redemption dates, each holder of our Series A Shares has the right to give notice requesting us to redeem all of the Series A Shares held by such holder out of legally available funds. In accordance with the terms of the Certificate, if we have legally available funds to redeem all, but not less than all, of the Series A Shares requested to be redeemed on a redemption date, we will deliver to those holders who have requested redemption in accordance with the Certificate a notice of redemption. If we do not have legally available funds to redeem all, but not less than all, of the Series A Shares requested to be redeemed on a redemption date, we will not provide a notice of redemption. The redemption right will be exercisable in connection with each redemption date every five years until the mandatory redemption date in 2044. If we are required to redeem all of the holder’s Series A Shares, we are required to do so for cash at a price equal to $1,000 per share (the issuance price) out of funds legally available therefor. Due to the redemption provisions of the Series A Shares, we classify these shares as mezzanine equity, outside of permanent stockholders' equity. The holders of our Series A Shares are not entitled to receive dividends with respect to their Series A Shares. The Series A Shares are convertible into shares of our common stock at a conversion price of $1,250 per share (or an exchange rate of 0.8 shares of common stock for Series A Share), subject to certain anti-dilution adjustments. Upon certain change of control transactions or upon the liquidation, dissolution or winding up of the Company, holders of the Series A Shares will be entitled to receive an amount in cash per Series A Share 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 Series A Shares were convertible on each ex-dividend date for such dividends; and (ii) The number of shares of common stock into which the Series A Shares are then convertible multiplied by the then-current market price of the common stock. The Certificate 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 Shares 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 Shares rank senior to our common stock and on parity with all other classes of preferred stock that may be issued by us in the future. The Series A Shares are recorded net of issuance costs, which were amortized on a straight-line basis through the first potential redemption date in March 2020. Between January 31, 2020 and February 3, 2020, we received purported notices from all of the holders of our Series A Shares requesting us to redeem an aggregate of $250.0 million liquidation preference of our Series A Shares on March 15, 2020. We did not have legally available funds to redeem all, but not less than all, of the Series A Shares on March 15, 2020. As a result, we do not believe, under the terms of the Certificate, that we were obligated to redeem any of the Series A Shares under the Certificate. Current Litigation – Luxor (plaintiff) v. AAMC (defendant) On February 3, 2020, Luxor filed a complaint in the Supreme Court of the State of New York, County of New York, against AAMC for breach of contract, specific performance, unjust enrichment, and related damages and expenses. The complaint alleges that AAMC’s position that it will not redeem any of Luxor’s Series A Shares on the March 15, 2020 redemption date is a material breach of AAMC’s redemption obligations under the Certificate. Luxor seeks an order requiring AAMC to redeem its Series A Shares, recovery of no less than $144,212,000 in damages, which is equal to the amount Luxor would receive if AAMC redeemed all of Luxor’s Series A Shares at the redemption price of $1,000 per share set forth in the Certificate, as well as payment of its costs and expenses in the lawsuit. In the alternative, Luxor seeks a return of its initial purchase price of $150,000,000 for the Series A Shares, as well as payment of its costs and expenses in the lawsuit. On May 25, 2020, Luxor’s complaint was amended to add Putnam Equity Spectrum Fund and Putnam Capital Spectrum Fund (collectively, “Putnam”), which also invested in the Series A Shares, as plaintiff. On June 12, 2020, AAMC moved to dismiss the Amended Complaint in favor of AAMC’s first-filed declaratory judgment action in the U.S. Virgin Islands. On August 3, 2020, the court denied AAMC’s motion to dismiss. On February 23, 2021, in accordance with the terms of the Putnam Agreement described below, Putnam agreed to discontinue all claims against AAMC with prejudice related to the Series A shares. Luxor and AAMC have completed discovery in the action. AAMC and Luxor each filed summary judgment motions on July 19, 2022 and replies to those motions on August 18, 2022 and September 15, 2022. On December 1, 2022, having heard oral arguments on the summary judgment motions, the court denied both parties’ motions. AAMC And Luxor have filed an appeal and cross-appeal, respectively, from the trial court’s ruling in the Appellate Division - First Department, of the Supreme Court of the State of New York. By stipulation of the parties, the appeal and cross-appeal shall be perfected and briefed for the June 2023 term. AAMC’s brief as Defendant-Appellant-Cross-Respondent was filed on February 22, 2023. Luxor’s brief as Plaintiff-Appellee-Cross-Appellant is due to be filed by April 6, 2023. AAMC’s reply brief is due April 21, 2023. Luxor’s reply brief is due May 8, 2023. AAMC continues to pursue its strategic business initiatives despite this litigation. If Luxor were to prevail in its lawsuit, our liquidity could be materially and adversely affected. – AAMC (plaintiff) v. Nathaniel Redleaf (defendant) On October 31, 2022, AAMC filed a complaint with demand for jury trial in the Superior Court of the Virgin Islands, Division of St. Croix, against Nathaniel Redleaf alleging breach of fiduciary duty to AAMC. Mr. Redleaf was a member of AAMC’s Board of Directors for five years and the Company’s complaint alleges that he breached his fiduciary duty, by among other things, disclosing AAMC’s confidential information to Luxor. AAMC seeks a number of remedies, including compensatory damages, disgorgement of any benefit received by Luxor or Mr. Redleaf as a result of such breaches. On January 4, 2023, this action was removed to the United States District Court of the Virgin Islands, Division of St. Croix. On February 28, 2023, defendant Redleaf filed a motion to dismiss the complaint. AAMC’s opposition to defendant’s motion is due on April 4, 2023. Settlement Activities On February 17, 2021, the Company entered into a settlement agreement dated as of February 17, 2021 (the “Putnam Agreement”) with Putnam. Pursuant to the Putnam Agreement, AAMC and Putnam exchanged all of Putnam’s 81,800 Series A Shares for 288,283 shares of AAMC’s common stock. Additionally, AAMC paid Putnam $1,636,000 within three On August 27, 2021, the Company entered into a settlement agreement (the “Wellington Agreement”) with certain funds managed by Wellington Management Company LLP (collectively, “Wellington”). Under the Wellington Agreement, the Company paid Wellington $2,093,000 in exchange for 18,200 Series A Shares ($18.2 million of liquidation preference) held by Wellington , and in return Wellington agreed to release AAMC from all claims related to the Series A Shares . As a result of this settlement, we recognized a one-time gain directly to Additional paid in capital of $16.1 million gain in the third quarter of 2021. On January 6, 2022, the Company entered into a settlement agreement (the "Settlement Agreement") with two institutional investors. Under the Settlement Agreement, the Company paid the institutional investors approximately $665 thousand in cash in exchange for 5,788 Series A Shares ($5.79 million of liquidation preference) held by the institutional investors. As a result of this settlement, the Company recognized a one-time gain directly to Additional paid in capital of approximately $5.1 million in the first quarter of 2022. On July 18, 2022, the Company entered into an agreement (the "Purchase Agreement") with Putnam in which the Company repurchased 286,873 shares of common stock of the Company owned by Putnam (the "Putnam Shares"). The aggregate purchase price of the Putnam Shares was $2,868,730, or $10 per share. Pursuant to the Purchase Agreement, the Company and Putnam also agreed to terminate the most favored nation clause granted to Putnam in the Putnam Agreement. The Company and Putnam also agreed to terminate all of Putnam's shareholder voting obligations included in the Putnam Agreement. 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 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. We have issued shares of preferred stock under the Employee Preferred Stock Plan 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. At December 31, 2022 and 2021, we had 3,200 and 1,200 and shares outstanding, respectively, and we included the redemption value of these shares of $32,000 and $12,000 respectively, within accounts payable and accrued liabilities in our Consolidated Balance Sheets. In December 2022 and January 2021, our Board of Directors declared and paid an aggregate $0.4 million and of $1.6 million, respectively, of dividends on these shares of preferred stock. Such dividends are included in salaries and employee benefits in our Consolidated Statements of Operations. Recently issued accounting standards Recently issued accounting standards adopted In December 2019, the FASB issued ASU 2019-12, “Income Taxes - Simplifying the Accounting for Income Taxes (Topic 740),” which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. Our adoption of this standard in the first quarter of 2022 did not have a material impact on our financial statements. Recently issued accounting standards not yet adopted In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which provides practical expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments in this update apply only to contracts, hedging relationships, and other transactions that reference the London interbank offered rate (“LIBOR”) or another reference rate expected to be discontinued as a result of reference rate reform. These amendments are not applicable to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. ASU No. 2020-04 is effective as of March 12, 2020 through December 31, 2022 and may be applied to contract modifications and hedging relationships from the beginning of an interim period that includes or is subsequent to March 12, 2020. In December 2022, the FASB extended the temporary accounting rules under Topic 848 from December 31, 2022 to December 31, 2024. We will adopt this standard when LIBOR is discontinued. We are evaluating the impact the new standard will have on our consolidated financial statements and related disclosures, but do not anticipate a material impact. Recent accounting pronouncements pending adoption not discussed above or in the 2021 Form 10-K are either not applicable or will not have, or are not expected to have a material impact on our consolidated financial position, results of operations, or cash flows. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Cash equivalents We consider highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Certain account balances exceed FDIC insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. To mitigate this risk, we maintain our cash and cash equivalents at large national or international banking institutions. Restricted cash We have designated restricted cash when appropriate within our Consolidated Balance Sheets. Consolidations The consolidated financial statements include the accounts of AAMC and its consolidated subsidiaries, which include the voting interest entities in which we are determined to have a controlling financial interest. 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. We had no VIEs or potential VIEs as of and for the years ended December 31, 2022 or 2021. Earnings per share Basic earnings per share is computed by dividing net income or loss, less amortization of preferred stock issuance costs, by the weighted average common stock outstanding during the period. Diluted earnings per share is computed by dividing net income or loss by the weighted average common stock outstanding for the period plus the dilutive effect of (i) stock options and restricted stock outstanding using the treasury stock method and (ii) Series A Preferred Shares using the if-converted method. Weighted average common stock outstanding - basic excludes the impact of unvested restricted stock since dividends paid on such restricted stock are non-participating. Any gain on settlement of preferred shares, which is recorded directly to equity, is included in the numerators for our earnings per share calculations. Fair value of financial instruments We designate fair value measurements into three levels based on the lowest level of substantive input used to make the fair value measurement. Those levels are as follows: • 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. Income taxes Income taxes are provided for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in the years in which management expects those temporary differences to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period in which the change occurs. Subject to our judgment, we reduce a deferred tax asset by a valuation allowance if it is “more likely than not” that some or the entire deferred tax asset will not be realized. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in evaluating tax positions, and we recognize tax benefits only if it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authority. For all temporary differences, we have considered the potential future sources of taxable income against which they may be realized. In so doing, we have taken into account temporary differences that we expect to reverse in future years and those where it is unlikely. Where it is more likely than not that there will not be potential future taxable income to offset a temporary difference, a valuation allowance has been recorded. Lastly, the Company accounts for the tax on global intangible low-taxed income (“GILTI”) as incurred and therefore has not recorded deferred taxes related to GILTI on its foreign subsidiaries. Leases On January 1, 2019, we adopted ASU 2016-02, including various associated updates and amendments, which together comprise the requirements for lease accounting under ASC 842. ASC 842 fundamentally changes accounting for operating leases by requiring lessees to recognize a liability to make lease payments and a right-of-use asset over the term of the lease. We also adopted the “package of practical expedients,” which permits us not to reassess our prior conclusions about lease identification, lease classification and initial direct costs under the new standard. We also elected the short-term lease exemption for all leases that qualify; as a result, we will not recognize right-of-use assets or lease liabilities for leases with a term of less than 12 months at inception. We lease office space under three operating leases. Our office leases are generally for terms of one Other assets Other assets includes leasehold improvements; furniture, fixtures and equipment; deferred tax assets, refunds due and miscellaneous other assets. The cost basis of fixed assets is depreciated using the straight-line method over an estimated useful life of three Revenue recognition Interest revenue is recognized based on the stated coupon when earned and deemed collectible or until a loan becomes more than 90 days past due, at which point the loan is place on nonaccrual status and any accrued interest is reversed against interest revenue. Upon a nonaccrual loan being reinstated, meaning all delinquent principal and interest payments have been remitted by the borrower, the loan will be placed back on accrual status. Interest accrued as of period end is included within loans for sale, at fair value, or loans held for investment, at fair value, in the Consolidated Balance Sheets as applicable. Loan fees represent origination fees charged to borrowers and are recognized to revenue upon the origination date of the loan. Share-based compensation We amortize the grant date fair value of restricted stock as expense on a straight-line basis over the service period with an offsetting increase in stockholders' equity. The grant date fair value of awards with only service-based vesting conditions is determined based upon the share price on the grant date. We recognize share-based compensation expense related to (i) awards to employees in salaries and employee benefits and (ii) awards to Directors or non-employees in general and administrative expense in our Consolidated Statements of Operations. Forfeitures of share-based awards are recognized as they occur. Treasury stock We account for repurchased common stock under the cost method and include such treasury stock as a component of total stockholders’ equity. We have repurchased shares of our common stock (i) under our Board approval to repurchase up to $300.0 million in shares of our common stock and (ii) upon our withholding of shares of our common stock to satisfy tax withholding obligations in connection with the vesting of our restricted stock. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 3. Discontinued Operations Our primary client prior to December 31, 2020 had been Front Yard Residential Corporation (“Front Yard”), a public real estate investment trust (“REIT”) focused on acquiring and managing quality, affordable single-family rental (“SFR”) properties throughout the United States. All of our revenue for all periods presented prior to December 31, 2021 was generated through our asset management agreements with Front Yard. On August 13, 2020, AAMC and Front Yard entered into a Termination and Transition Agreement (the “Termination Agreement”), pursuant to which the Company and Front Yard have agreed to effectively internalize the asset management function of Front Yard. The Termination Agreement provided that the Amended AMA would terminate following a transition period to enable the internalization of Front Yard’s asset management function, allow for the assignment of certain vendor contracts and implement the transfer of certain employees to Front Yard and the training of required replacement employees at each company. In addition, Front Yard acquired the equity interests of AAMC's Indian subsidiary, the equity interests of AAMC's Cayman Islands subsidiary, the right to solicit and hire designated AAMC employees that oversaw the management of Front Yard's business and other assets of AAMC that were used in connection with the operation of Front Yard's business. The transition period ended at the close of business, December 31, 2020, the time that AAMC and Front Yard mutually agreed that all required transition activities had been successfully completed (the “Termination Date”). On the Termination Date, the Amended AMA terminated, and the Company completed the assignment of our lease in Charlotte, North Carolina to Front Yard. Additionally, on December 31, 2020, we completed the sale of our Cayman Islands subsidiary. On January 1, 2021, in connection with the Termination Agreement, the Company completed the sale of our India subsidiary, the gain on this sale, net of taxes was $6.2 million. The Company had no assets and liabilities related to our discontinued operations that constituted the Disposal Group at December 31, 2022. The following table details the components comprising net income from our discontinued operations for the year ended December 31, 2021. ($ in thousands): Year ended December 31, 2021 Other income from discontinued operations: Gain on disposal $ 7,485 Total other income from discontinued operations 7,485 Net income from discontinued operations before income taxes 7,485 Income tax expense 1,272 Net income from discontinued operations $ 6,213 The following table details cash flow information related to our discontinued operations for the year ended December 31, 2021. ($ in thousands): Year ended December 31, 2021 Total operating cash flows from discontinued operations $ 5,439 Total investing cash flows from discontinued operations 511 Total financing cash flows from discontinued operations 80 |
Loans Held for Sale or Investme
Loans Held for Sale or Investment at Fair Value | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Loans Held for Sale or Investment at Fair Value | 4. Loans Held for Sale or Investment at Fair Value Our loan portfolio consists of business purpose loans secured by single family, multifamily and commercial real estate that were acquired from third party originators or issued by us. The composition of the loan portfolio by classification as of December 31, 2022 and 2021, respectively, is summarized in the table below ($ in thousands): Held for Sale Held for Investment December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021 Total loan commitments $ 15,080 $ — $ 98,157 $ — Less: construction holdbacks (1) (3,350) — (13,188) — Total principal outstanding 11,730 — 84,969 — Change in fair value of loans (137) — (1,826) — Total loans at fair value $ 11,593 $ — $ 83,143 $ — (1) Construction holdbacks include in process accounts such as payments, advances, interest reserve, accrued interest and other accounts. The loan portfolio consists of 128 loans at December 31, 2022, with a weighted average coupon of 9.4%, of which the Company receives a net yield of 8.5% after taking into account the strip interest to the sellers of the loans. The weighted average life of the portfolio is approximately 8.2 months. 19 loans represent 60% of the total principal outstanding at December 31, 2022. There was one loan on nonaccrual status or 90 days or more past due at December 31, 2022, with a carrying value of $0.6 million. The table below represents activity within the loan portfolio by classification for the period shown ($ in thousands): Loans Held for Sale Loans Held for Investment Balance at December 31, 2021 $ — $ — Acquisitions — 99,087 Originations 8,843 — Additional fundings 3,857 10,794 Interest receivable 91 1,262 Payoffs and repayments (1,061) (26,174) Fair value adjustment (137) (1,826) Balance at December 31, 2022 $ 11,593 $ 83,143 The composition of the total loan commitment by state as of December 31, 2022 is summarized below ($ in thousands): State Commitment Percent of Portfolio Florida $ 32,422 28.6 % New York 22,250 19.6 % New Jersey 12,367 10.9 % California 12,513 11.1 % Washington 6,215 5.5 % Connecticut 4,374 3.9 % Texas 4,815 4.3 % Illinois 4,357 3.8 % Other 13,924 12.3 % Total $ 113,237 100.0 % For financial reporting purposes of our alternative loans, we follow a fair value hierarchy established under GAAP, as described in Note 2 , that is used to determine the fair value of financial instruments. This hierarchy prioritizes relevant market inputs in order to determine an “exit price” at the measurement date, or at the price at which an asset could be sold or a liability could be transferred in an orderly process that is not a forced liquidation or distressed sale. In certain cases, inputs used to measure fair value fall into different levels of the fair value hierarchy. In such cases, the level at which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. Our assessment of the significance of a particular input requires judgment and considers factors specific to the asset or liability being measured. The following table presents the assets that are reported at fair value on a recurring basis as of December 31, 2022, as well as the fair value of hierarchy of the valuation inputs used to measure fair value. We did not have any assets that were reported at fair value as of December 31, 2021. We did not have any liabilities to report at fair value on a recurring basis as of December 31, 2022. December 31, 2022 Carrying Fair Value Measurements Using (In thousands) Value Level 1 Level 2 Level 3 Assets Loans held for sale $ 11,593 $ — $ — $ 11,593 Loans held for investment 83,143 — — 83,143 Total measured $ 94,736 $ — $ — $ 94,736 The estimated fair value for our business purpose loans is determined using the discounted cash flow model (“DCF”) to estimate the net present value of the future cash flows expected from each loan. For performing loans, the DCF is based on the future expected cash flows of each loan in accordance with its contractual terms net of the strip component. Cash flows for performing loans with construction holdbacks incorporate the draws to complete the required improvements to the underlying property securing the loan. For nonaccrual loans, the estimated cash flows are based on the current fair value of the collateral of the loans, in which the Company will utilize a third-party appraisal to determine the fair value (Level 3). On a loan by loan basis, the weighted average discount rate range utilized for the DCF applied to the net yield to be received by the Company was 11.4% which is greater than the overall yield on the portfolio of 7.7%, resulting in the decrease in value of the portfolio at December 31, 2022. The determination of the discount rate was based on analysis of the current interest rates charged for business purpose loans in conjunction with the increase in rates for other underlying base rates such as the 10-year U.S. treasury bond and the 30 day Secured Overnight Financing Rate ("SOFR") (Level 3). As of December 31, 2022, the Company had no securities outstanding. We did not transfer any assets from one level to another level during the years ended December 31, 2022 and 2021, respectively. |
Equity Securities
Equity Securities | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Equity Securities | 5. Equity Securities Investment gains/losses for December 31, 2022 and 2021, are summarized as follows ($ in thousands): Year ended December 31, 2022 2021 Equity securities: Investment gains on securities sold during the period $ — $ 8,347 — 8,347 Front Yard common stock: Investment gains on securities sold during the period — 146 — 146 Total change in fair value of equity securities and Front Yard common stock $ — $ 8,493 Investment gains and losses include unrealized gains and losses from changes in fair values during the period on positions that we owned in 2021. As reflected in the Consolidated Statements of Cash Flows, total proceeds from sales of securities during December 31, 2021 was $152.8 million which consisted of proceeds from sales of Front Yard common stock of $47.5 million and $105.3 million in proceeds from sales of securities. No proceeds from sales of securities were received in 2022 because no investments were held. In the preceding table, investment gains/losses on equity securities sold during the period reflect the difference between the sales proceeds and the fair value of the equity securities sold at the beginning of the applicable period. |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Borrowings | 6. Borrowings In December 2022, the Company entered into a $50.0 million Master Repurchase Agreement (the "NexBank Line") with NexBank, as the buyer. The Company uses the proceeds from the NexBank Line to fund the acquisition and origination of business purpose loans (the "Loans") secured by residential, multifamily and certain commercial properties. Each draw on the NexBank Line can be outstanding up to 180 days. NexBank has a security interest in the Loans subject to a transaction under the NexBank Line. The NexBank Line's maturity is 364 days from the execution date. The carrying value of the NexBank Line approximates its fair value as of December 31, 2022 due to its short-term nature and floating interest rate terms. The NexBank Line accrues interest at a equal to the greater of (a) the 1 month Term SOFR rate plus a spread dependent on three and on-half percent (3.50%) or (b) four and one-quarter (4.25%). The average borrowing rate was 5.60% and weighted average remaining term is 156 days as of December 31, 2022. NexBank Line’s outstanding balance is $9.2 million and is collateralized by $10.4 million in Loans at December 31, 2022. The NexBank Line provides for certain affirmative and negative covenants applicable to the Company and its subsidiaries. The Company is required to maintain financial covenants including specified levels of: 1) maximum debt to net worth ratio; 2) minimum current ratio; and 3) minimum liquidity. The NexBank Line also contains events of default (subject to certain materiality thresholds and grace periods), including payment defaults, breaches of covenants and representations and warranties, cross defaults, bankruptcy or insolvency proceedings and other events of default which are customary for this type of transaction. The remedies for such events of default include the acceleration of the principal amount outstanding under the NexBank Line and the liquidation of Loans subject to a transaction. The Company was in compliance with all covenants and there were no defaults as of December 31, 2022. In August 2022, the Company entered into a $50.0 million Master Repurchase Agreement (the “Flagstar Line”) with Flagstar Bank FSB (“Flagstar”), a federal savings bank, as a buyer and administrative agent. The Company uses the proceeds from the Flagstar Line to fund the acquisition and origination of Loans secured by residential, multifamily and certain commercial properties. Each draw on the Flagstar Line can be outstanding up to 180 days. Flagstar has a security interest in the Loans subject to a transaction under the Flagstar Line and requires the Company to maintain restricted cash of $2 million in a Flagstar deposit account. The Flagstar Line's maturity is 364 days from the execution date. The carrying value of the Flagstar Line approximates its fair value as of December 31, 2022 due to its short-term nature and floating interest rate terms. The Flagstar Line accrues interest at a base 1-Month Term SOFR rate plus a spread dependent upon the type of Loan subject to a transaction. Interest is payable at 90 days. The Company also incurs a fee on the unused portion of the $50.0 million if the average outstanding balance of the Flagstar Line is less than a threshold level of the total commitment. The average borrowing rate was 7.30% and weighted average remaining term is 134 days as of December 31, 2022. Flagstar Line’s outstanding balance is $42.5 million and is collateralized by $57.4 million in Loans at December 31, 2022. The Flagstar Line provides for certain affirmative and negative covenants applicable to the Company and its subsidiaries. The Company is required to maintain financial covenants including specified levels of: 1) quarter-end tangible net worth; 2) quarter-end liquidity; 3) a quarter-end ratio of total liabilities to tangible net worth; and 4) minimum profitability requirements in 2023. The Flagstar Line also contains events of default (subject to certain materiality thresholds and grace periods), including payment defaults, breaches of covenants and representations and warranties, cross defaults, bankruptcy or insolvency proceedings and other events of default which are customary for this type of transaction. The remedies for such events of default include the acceleration of the principal amount outstanding under the Flagstar Line and the liquidation of Loans subject to a transaction. The Company was in compliance with all covenants and there were no defaults as of December 31, 2022. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | 7. Leases We lease office space under operating leases in Christiansted, St. Croix, U.S. Virgin Islands, Tampa, Florida and Bengaluru, India. As of December 31, 2022 and 2021, our weighted average remaining lease term, including applicable extensions, was 3.8 years and 5.1 years, respectively, and we applied a discount rate of 7.0% and 7.0%, respectively, to our office leases. We determined the discount rate for each lease to be either the discount rate stated in the lease agreement or our estimated rate that we would charge to finance real estate assets. During the years ended December 31, 2022 and 2021, we recognized rent expense of $0.3 million and $0.2 million, respectively, related to long-term operating leases. We had no short-term rent expense in 2022 or 2021. We include rent expense as a component of general and administrative expenses in the Consolidated Statements of Operations. We had no finance leases during the years ended December 31, 2022 and December 31, 2021. The following table presents a maturity analysis of our operating leases as of December 31, 2022 ($ in thousands): Operating Lease Liabilities 2022 $ 468 2023 330 2024 311 2025 321 2026 76 Total lease payments 1,506 Less: interest 183 Lease liabilities $ 1,323 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. 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 material legal proceedings to which we are a party as of December 31, 2022: Litigation regarding Luxor Capital Group, LP and certain of its managed funds and accounts ("Luxor") Please refer to Note 1 – Section Series A Convertible Preferred Stock in 2014 Private Placement. Executive Arbitrations Former Chief Executive Officer, Indroneel Chatterjee On May 3, 2021, Mr. Chatterjee, commenced an arbitration against the Company and each of its directors. The arbitration complaint alleges that the Company’s April 16, 2021 for cause termination of Mr. Chatterjee was in breach of Mr. Chatterjee’s Amended and Restated Employment Agreement and made extra contractual claims against the Company for not affording Mr. Chatterjee a “fair procedure” and placed him in a “false light” by disclosing Mr. Chatterjee’s termination in its public announcement of the for cause termination. In addition, the arbitration complaint also asserts a tort claim against each of the Company’s directors relating to that termination and against the Company for its April 16, 2021 public announcement of the for cause termination. Mr. Chatterjee’s arbitration complaint seeks unspecified damages for his contract claims including for loss of income, stock and bonus, and punitive damages on his tort claims. On June 10, 2021, the Company and its directors responded to the arbitration complaint and advanced counterclaims against Mr. Chatterjee. On October 20, 2021, the arbitrator granted the Company’s motion to dismiss with respect to Mr. Chatterjee’s “fair procedure” and “false light” claims, but denied the motion to dismiss the tort claim against each of the directors. Following the close of discovery on July 11, 2022, the Company moved for summary judgment seeking dismissal of Mr. Chatterjee's remaining claims against the Company and against its directors, and further seeking entry of judgment on the majority of the Company's counterclaims. On July 21, 2022, the Company and its directors filed a motion alleging that Mr. Chatterjee had engaged in fraud and seeking as sanctions for that abuse both the dismissal of all of Mr. Chatterjee's claims and the payment of the Company's legal fees resulting from that alleged abuse. Following briefing by all parties on the summary judgment and sanction motions, on October 19, 2022, the arbitrator found that Mr. Chatterjee engaged in serious and repeated misconduct, attempting to perpetrate a fraud on the arbitrator and the Company and accordingly (i) dismissed all of Mr. Chatterjee's remaining claims, both as a sanction for his misconduct and, independently, on the merits of the Respondents' motion for summary judgment; (ii) granted summary judgment on one of the Company's counterclaims requiring Mr. Chatterjee to pay the Company $400,000 (the return of half of his initial signing bonus); and, (iii) ordered that Mr. Chatterjee, as a further sanction for his misconduct, reimburse the Company for all expenses it incurred directly and solely as a result of his misconduct (which dollar amount has not yet been set). On December 29, 2022, the arbitrator entered a final order which granted an additional award of fees and costs to the Company in the amount of over $1 million, bringing the Company's total judgment against Mr. Chatterjee to approximately $1.6 million. In the arbitrator's final award, he also included the amounts he had previously awarded to the Company in his October 19, 2022 order, which were $400,000 plus interest at the U.S. Virgin Islands' 9.0% statutory rate for contractual claims (since Mr. Chatterjee's termination on April 16, 2021) and approximately $140,000 as reimbursement to the Company for all expenses the Company incurred directly and soley as a result of Mr. Chatterjee's misconduct in the arbitration. The Company intends to enforce the judgment against Mr. Chatterjee. Erbey Holding Corporation et al. v. Blackrock Management Inc., et al. On April 12, 2018, a partial stockholder derivative action was filed in the Superior Court of the Virgin Islands, Division of St. Croix under the caption Erbey Holding Corporation, et al. v. Blackrock Financial Management Inc., et al. The action was filed by Erbey Holding Corporation (“Erbey Holding”), John R. Erbey Family Limited Partnership (“JREFLP”), by its general partner Jupiter Capital, Inc., Salt Pond Holdings, LLC (“Salt Pond”), Munus, L.P. (“Munus”), Carisma Trust (“Carisma”), by its trustee, Venia, LLC, and Tribue Limited Partnership (collectively, the “Plaintiffs”) each on its own behalf and Salt Pond and Carisma derivatively on behalf of AAMC. The action was filed against Blackrock Financial Management, Inc., Blackrock Investment Management, LLC, Blackrock Investments, LLC, Blackrock Capital Management, Inc., Blackrock, Inc. (collectively, “Blackrock”), Pacific Investment Management Company LLC, PIMCO Investments LLC (collectively, “PIMCO”) and John and Jane Does 1-10 (collectively with Blackrock and PIMCO, the “Defendants”). The action alleges a conspiracy by Blackrock and PIMCO to harm Ocwen Financial Corporation (“Ocwen”) and AAMC and certain of their subsidiaries, affiliates and related companies and to extract enormous profits at the expense of Ocwen and AAMC by attempting to damage their operations, business relationships and reputations. The complaint alleges that Defendants’ conspiratorial activities, which included short-selling activities, were designed to destroy Ocwen and AAMC, and that the Plaintiffs (including AAMC) suffered significant injury, including but not limited to lost value of their stock and/or stock holdings. The action seeks, among other things, an award of monetary damages to AAMC, including treble damages under Section 605, Title IV of the Virgin Islands Code related to the Criminally Influenced and Corrupt Organizations Act, punitive damages and an award of attorney’s and other fees and expenses. Defendants have moved to dismiss the first amended verified complaint on various alleged grounds, including that the Court allegedly lacks personal jurisdiction over Defendants. Plaintiffs and AAMC have opposed Defendants’ motions and have also moved for leave to file a second amended verified complaint to include AAMC as a direct plaintiff, rather than as a derivative party. On March 27, 2019, the Court held oral argument on Defendants' motions to dismiss the first amended verified complaint and Plaintiffs' motion for leave to file the second amended verified complaint. The Court held additional oral argument on the pending motions on October 25, 2021. Plaintiffs have repeatedly requested the Court to decide the pending motions and issue a scheduling order permitting discovery to proceed. On October 11, 2022, the Court appointed a Staff Master to decide, or issue a recommended decision on, the pending motions, including the motion to dismiss for lack of personal jurisdiction. On February 1, 2023, Plaintiffs and AAMC filed a petition for mandamus with the United States Virgin Islands Supreme Court seeking an order directing the Superior Court to issue a decision on the personal jurisdiction issue and to permit discovery to proceed. On March 3, 2023, the Staff Master held a hearing to discuss the pending motions to dismiss. At the hearing, he indicated that a recommended decision on the pending motions (which would need to be confirmed or rejected by the Court) could be expected in late March or early April, 2023. At this time, we are not able to predict the ultimate outcome of this matter, nor can we estimate the range of possible damages to be awarded to AAMC, if any. As such, we have not recorded a gain contingency for this matter at December 31, 2022 or 2021, respectively. |
Incentive Compensation and Shar
Incentive Compensation and Share-based Payments | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Incentive Compensation and Share-based Payments | 9. Incentive Compensation and Share-based Payments Long-term incentive compensation Our officers and employees participate in an annual non-equity incentive program whereby they are eligible for incentive cash payments based on a percentage of their annual base salary. Our officers generally have a target annual non-equity incentive payment percentage that ranges from 50% to 200% of base salary. The officer's actual incentive payment for the year is determined by (i) the Company's performance versus the objectives established by our Board of Directors (80%) and (ii) a performance appraisal (20%). Share-based Payments Certain executive officers and employees have and will receive grants of stock options and/or restricted stock under the 2012 and 2020 Equity Incentive Plans, collectively (the "Equity Incentive Plans"). The Equity Incentive Plans also allow for the grant of performance awards and other awards such as purchase rights, equity appreciation rights, shares of common stock awarded without restrictions or conditions, convertible securities, exchangeable securities or other rights convertible or exchangeable into shares of common stock, as the Compensation Committee in its discretion may determine. 2012 Special Equity Incentive Plan A special grant of stock options and restricted stock was made to certain employees of Altisource Portfolio Solutions N.A. (“ASPS”) related to our separation from ASPS under the 2012 Special Equity Incentive Plan (the “2012 Special Plan”). We included no share-based compensation in our consolidated financial statements for the portion of these grants made to ASPS employees. The shares of restricted stock became fully vested and were issued during 2017. Dividends received on restricted stock are forfeitable and are accumulated until the time of vesting at the same rate and on the same date as on shares of common stock. Upon the vesting of stock options and restricted stock, we may withhold up to the statutory minimum to satisfy the resulting employee tax obligation. Stock options During the years ended December 31, 2022 and 2021, we recorded zero and approximately $21,000 compensation expense related to grants of stock options, respectively. The following table sets forth the activity of our outstanding options: Number of Options Weighted Average Exercise Price per Share December 31, 2020 67,225 12.13 Forfeited/expired (1) (61,375) 12.87 December 31, 2021 5,850 4.36 Exercised (2) (5,850) $ 4.36 December 31, 2022 — _____________ (1) 1,000 stock options expired on July 18, 2021 and 375 expired on July 21, 2021. All forfeited and expired options had a weighted average exercise price of $12.87. (2) 5,850 stock options were exercised on March 12, 2022 with a weighted average exercise price of $4.36. As of December 31, 2022, we had no outstanding options issued under all of our share-based compensation plans or as inducement awards. As of December 31, 2021, we had 5,850 outstanding options issued under all of our share-based compensation plans or as inducement awards, with a weighted average exercise price of $4.36, weighted average remaining life of 0.2 years and intrinsic value of $0.1 million. All options were exercised in March 2022. Restricted stock During the year ended December 31, 2022, we granted a total of 22,500 shares of service-based restricted stock to members of management with a weighted average grant date value per share of $9.89. These shares of service-based restricted stock awards were granted either as inducement awards or under our Equity Incentive Plans. These grants were to vest in three equal installments based on the grant date(s), subject to forfeiture or acceleration. During the year ended December 31, 2021, we granted a total of 90,671 shares of service-based restricted stock to members of management. Of which, 82,671 shares of service-based restricted stock awards were issued with a weighted average grant date fair value per share of $26.25 which vested immediately. An additional 8,000 shares were issued with a weighted average grant date value per share of $21.58. These additional shares of service-based restricted stock awards were granted either as inducement awards or under our Equity Incentive Plans. These grants will vest in three equal annual installments based on the grant date(s), subject to forfeiture or acceleration. We recorded $0.2 million and $1.8 million of compensation expense related to these grants for the years ended December 31, 2022, and 2021, respectively. As of December 31, 2022 and 2021, we had $0.3 million and $0.3 million, respectively, of total unrecognized share-based compensation cost to be recognized over a weighted average remaining estimated term of 1.1 years and 1.2 years, respectively. Additionally, our Directors each receive 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. This restricted stock vests on the date of the next Annual Meeting of Stockholders following the date of grant, 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. During the years ended December 31, 2022 and 2021, we granted 8,571 and 7,236 shares of stock, respectively, pursuant to our Equity Incentive Plans with a weighted average grant date fair value per share of $21.00 and $24.88, respectively. The following table sets forth the activity of our restricted stock: Number of Shares Weighted Average Grant Date Fair Value December 31, 2020 129,380 24.32 Granted 97,907 25.77 Vested (1) (162,051) 14.50 Forfeited/expired (50,000) 14.35 December 31, 2021 15,236 23.15 Granted 31,071 12.95 Vested (1) (9,903) 23.99 December 31, 2021 36,404 $ 14.22 _____________ (1) The vesting date fair value of restricted stock that vested during the years ended December 31, 2022, and 2021 was $0.2 million and $2.1 million, respectively. The following table sets forth the number of shares of common stock reserved for future issuance. We may issue new shares or issue shares from treasury shares upon the exercise of stock options or the vesting of restricted stock. December 31, 2022 Stock options outstanding — Possible future issuances under share-based compensation plans 91,217 91,217 As of December 31, 2022, we had 1,567,706 remaining shares of common stock, excluding treasury shares, authorized to be issued under our charter. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes We are domiciled in the USVI and are obligated to pay taxes to the USVI on our income. We applied for tax benefits from the USVI Economic Development Commission (“EDC”) and received our certificate of benefits (“the EDC Certificate”), effective as of February 1, 2013. Pursuant to the Certificate, so long as we comply its provisions, we will receive a 90% tax reduction on our USVI-sourced income until 2043. By letter dated September 16, 2022, the EDC approved a temporary waiver (the "Waiver") of the Company's minimum employment requirements to five full-time USVI employees for the period from July 1, 2022 to December 31, 2022. At December 31, 2022, the Company met the minimum employment requirements required under the provisions of the Waiver. Additionally, the Company hired Jason Kopcak as President and Chief Operating Officer, now Chief Executive Officer, in May 2022, and he has relocated to the USVI. Beginning on January 1, 2017, AAMC US, Inc., a domestic U.S. corporation and wholly-owned subsidiary, began operations. This entity is based entirely in the mainland U.S. and is subject to U.S. federal and state corporate income tax. The following table sets forth the components of income (loss) from continuing operations before income taxes ($ in thousands): Year ended December 31, 2022 2021 U.S. Virgin Islands $ (15,584) $ (8,879) Other — (65) Loss before income taxes $ (15,584) $ (8,944) The provision (benefit) for income taxes from continuing operations is summarized as follows ($ in thousands): Year ended December 31, 2022 2021 Current Federal $ 195 $ 4,378 State 4 — International 55 203 Total current tax expense 254 4,581 Deferred Federal 94 (1,281) State 2 — International — (27) Total deferred tax expense (benefit) 96 (1,308) Total tax expense $ 350 $ 3,273 The following table sets forth the components of our total deferred tax assets ($ in thousands): December 31, 2022 December 31, 2021 Deferred tax assets: Stock compensation $ 2 $ 2 Accrued expenses 84 24 Net operating losses (1) 1,109 637 Lease liabilities 54 14 Other 76 1 Gross deferred tax assets 1,325 678 Deferred tax liability: Right-of-use lease assets 53 13 Investments 6 — Gross deferred tax liabilities 59 13 Net deferred tax asset before valuation allowance 1,266 665 Valuation allowance (1,266) (498) Deferred tax asset, net $ — $ 167 _____________ (1) Net operating loss (“NOL”) carry-forwards for tax years prior to 2018 expire in 2037. Beginning with 2018, NOLs are carried forward indefinitely. The change in deferred tax assets is included in changes in other assets and liabilities in the Consolidated Statement of Cash Flows. The significant factors contributing to the increase in our valuation allowance in 2022 are due to increases in the temporary differences attributable to net operating losses, accrued compensation, and unrealized losses. ASC 740 requires that the tax benefit of net operating losses, temporary differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization is "more likely than not." Realization of the future tax benefits is dependent on the Company's ability to generate sufficient taxable income within the carryforward period. AAMC has historically been in a three-year cumulative loss position with the exception of 2020 due to the recognition of the Termination Fee payments as income that year. Removing this income from the analysis results in cumulative three-year book losses as of December 31, 2022. The Company believes that it is more likely than not that the Company will not realize the benefit of its net deferred tax assets. As such, the Company has recorded a full valuation allowance in 2022 against its net deferred tax assets. The valuation allowance increased by $768 thousand during the year ended December 31, 2022. The following table sets forth the reconciliation of the statutory USVI income tax rate from continuing operations to our effective income tax rate: Year ended December 31, 2022 2021 U.S. Virgin Islands income tax rate 23.1 % 23.1 % EDC benefits in the USVI (19.5) (48.2) Foreign tax rate differential (0.2) (0.2) Subpart F income — (18.5) Permanent and other (0.5) (1.6) Share-based compensation — (0.2) Valuation allowance (4.9) (4.8) Foreign Tax Credit — 13.6 Other Adjustments (0.3) — Effective income tax rate (2.3) % (36.8) % During the tax years ended December 31, 2022 and 2021, we recognized no interest or penalties associated with unrecognized tax benefits. As of December 31, 2022 and 2021, we had accrued no unrecognized tax benefits or associated interest and penalties. AAMC believes that the tax positions taken in the AAMC tax returns satisfy the more-likely-than-not threshold for benefit recognition. Furthermore, a review of the AAMC entity trial balances suggests that AAMC has appropriately addressed the material book-tax differences. AAMC is confident that the amounts claimed (or expected to be claimed) in the tax returns reflect the largest amount of such benefits that are greater than fifty percent likely of being realized upon ultimate settlement. Accordingly, no ASC 740-10-25 liabilities have been recorded by the Company as a result of ASC 740-10-25. We remain subject to tax examination in the USVI for tax years 2019 to 2022 and in the United States for tax years 2019 to 2022. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 11. Earnings Per Share The following table sets forth the components of diluted loss per share (in thousands, except share and per share amounts): Year ended December 31, 2022 2021 Numerator Continuing operations: Net loss from continuing operations $ (15,934) $ (12,217) Gain on preferred stock transactions 5,122 87,961 Numerator for basic and diluted EPS from continuing operations – net income (loss) from continuing operations attributable to common stockholders $ (10,812) $ 75,744 Discontinued operations: Numerator for basic and diluted EPS from discontinued operations - net gain from discontinued operations $ — 6,213 Total: Net loss $ (15,934) $ (6,004) Gain on preferred stock transactions 5,122 87,961 Numerator for basic and diluted EPS - net income attributable to common stockholders (10,812) 81,957 Denominator Weighted average common stock outstanding – basic 1,917,503 2,002,111 Weighted average common stock outstanding – diluted 1,917,503 2,162,378 Earnings (loss) per share of common stock – basic: Continuing operations - basic $ (5.64) $ 37.83 Discontinued operations - basic — 3.11 Earnings per basic common share $ (5.64) $ 40.94 Earnings (loss) per share of common stock – diluted: Continuing operations - diluted $ (5.64) $ 35.03 Discontinued operations - diluted — 2.87 Earnings per diluted common share $ (5.64) $ 37.90 We excluded the items presented below from the calculation of diluted earnings per share as they were antidilutive for the periods indicated, as the Company had a net loss from continuing operations for each period presented ($ in thousands): Year ended December 31, 2022 2021 Denominator Stock options — — Restricted stock 16,965 — Preferred stock, if converted 115,434 — |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | 12. Segment Information Our primary business prior to December 31, 2020 was to provide asset management and certain corporate governance services to institutional investors. Because substantially all of our revenue was derived from the services we provided to Front Yard, we previously operated as a single segment focused on providing asset management and corporate governance services. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. Subsequent Events Management has evaluated the impact of all subsequent events to December 31, 2022 and through the issuance of these consolidated financial statements. Management has determined that there were no subsequent events requiring adjustment or disclosure in the financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation | The accompanying audited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. All wholly owned subsidiaries are included, and all intercompany accounts and transactions have been eliminated. The Company changed its balance sheet presentation from classified (distinguishing between short-term and long-term accounts) to unclassified (no such distinction) in the second quarter of 2022. This change was prompted by the Company’s strategic decision to launch an alternative lending operation, ALG, in March 2022, as described above. The presentation of an unclassified balance sheet is consistent with that of the Company’s peers within the lending industry. Further, the previous classified presentation was not utilized to derive any metric by which the Company is measured or will be measured on a prospective basis. As the Company is now presenting an unclassified balance sheet, reclassification adjustments have been made to the historical Consolidated Balance Sheets at December 31, 2021 in order for it to conform with the current unclassified presentation. |
Use of estimates | The preparation of 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Loans held for sale or investment, carried at fair market value We originate and purchase alternative loans. These loans will either be classified as held for investment or held for sale depending upon the determination of management. We have elected to measure these alternative loans at fair value on a loan by loan basis. This option is available when we first recognize a financial asset. Subsequent changes in the fair value of these loans will be recorded in our Consolidated Statements of Operations in the period of the change. Purchased loans, also known as correspondent loans, can be bought with a net strip interest component in that the seller of the loan will receive an agreed upon percentage of the coupon interest generated from the sold loan. This strip component is reflected as service and asset management expense on the Consolidated Statements of Operations. A fair value measurement represents the price at which an orderly transaction would occur between willing market participants at the measurement date. We estimate the fair values of the loans held for investment or sale based on available inputs from the marketplace. The market for the loans that we have or will invest in is generally illiquid. Establishing fair values for illiquid assets is inherently subjective and is often dependent upon our estimates and modeling assumptions. In circumstances where relevant market inputs cannot be obtained, increased analysis and management judgment are required to estimate fair value. This generally requires us to establish internal assumptions about future cash flows and appropriate risk-adjusted discount rates. Regardless of the valuation inputs we apply, the objective of fair value measurement for assets is unchanged from what it would be if markets were operating at normal activity levels and/or transactions were orderly; that is, to determine the current exit price. See Note 4 for further discussion on fair value measurements. Interest for these loans is recognized as revenue based on the stated coupon when earned and deemed collectible or until a loan becomes more than 90 days past due, at which point the loan is placed on nonaccrual status and any accrued interest is reversed against interest income. When a seriously delinquent loan previously placed on nonaccrual status has been cured, meaning all delinquent principal and interest have been remitted by the borrower, the loan will be placed back on accrual status. Interest accrued as of period end is included within loans held for sale, at fair value or loans held for investment, at fair value in the Consolidated Balance Sheets as applicable. |
Recently issued accounting standards | Recently issued accounting standards Recently issued accounting standards adopted In December 2019, the FASB issued ASU 2019-12, “Income Taxes - Simplifying the Accounting for Income Taxes (Topic 740),” which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. Our adoption of this standard in the first quarter of 2022 did not have a material impact on our financial statements. Recently issued accounting standards not yet adopted In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which provides practical expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments in this update apply only to contracts, hedging relationships, and other transactions that reference the London interbank offered rate (“LIBOR”) or another reference rate expected to be discontinued as a result of reference rate reform. These amendments are not applicable to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. ASU No. 2020-04 is effective as of March 12, 2020 through December 31, 2022 and may be applied to contract modifications and hedging relationships from the beginning of an interim period that includes or is subsequent to March 12, 2020. In December 2022, the FASB extended the temporary accounting rules under Topic 848 from December 31, 2022 to December 31, 2024. We will adopt this standard when LIBOR is discontinued. We are evaluating the impact the new standard will have on our consolidated financial statements and related disclosures, but do not anticipate a material impact. Recent accounting pronouncements pending adoption not discussed above or in the 2021 Form 10-K are either not applicable or will not have, or are not expected to have a material impact on our consolidated financial position, results of operations, or cash flows. |
Cash equivalents | Cash equivalents We consider highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Certain account balances exceed FDIC insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. To mitigate this risk, we maintain our cash and cash equivalents at large national or international banking institutions. Restricted cash |
Consolidations | Consolidations The consolidated financial statements include the accounts of AAMC and its consolidated subsidiaries, which include the voting interest entities in which we are determined to have a controlling financial interest. 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. We had no VIEs or potential VIEs as of and for the years ended December 31, 2022 or 2021. |
Earnings per share | Earnings per share Basic earnings per share is computed by dividing net income or loss, less amortization of preferred stock issuance costs, by the weighted average common stock outstanding during the period. Diluted earnings per share is computed by dividing net income or loss by the weighted average common stock outstanding for the period plus the dilutive effect of (i) stock options and restricted stock outstanding using the treasury stock method and (ii) Series A Preferred Shares using the if-converted method. Weighted average common stock outstanding - basic excludes the impact of unvested restricted stock since dividends paid on such restricted stock are non-participating. Any gain on settlement of preferred shares, which is recorded directly to equity, is included in the numerators for our earnings per share calculations. |
Fair value of financial instruments | Fair value of financial instruments We designate fair value measurements into three levels based on the lowest level of substantive input used to make the fair value measurement. Those levels are as follows: • 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. |
Income taxes | Income taxes Income taxes are provided for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in the years in which management expects those temporary differences to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period in which the change occurs. Subject to our judgment, we reduce a deferred tax asset by a valuation allowance if it is “more likely than not” that some or the entire deferred tax asset will not be realized. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in evaluating tax positions, and we recognize tax benefits only if it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authority. For all temporary differences, we have considered the potential future sources of taxable income against which they may be realized. In so doing, we have taken into account temporary differences that we expect to reverse in future years and those where it is unlikely. Where it is more likely than not that there will not be potential future taxable income to offset a temporary difference, a valuation allowance has been recorded. Lastly, the Company accounts for the tax on global intangible low-taxed income (“GILTI”) as incurred and therefore has not recorded deferred taxes related to GILTI on its foreign subsidiaries. |
Leases | Leases On January 1, 2019, we adopted ASU 2016-02, including various associated updates and amendments, which together comprise the requirements for lease accounting under ASC 842. ASC 842 fundamentally changes accounting for operating leases by requiring lessees to recognize a liability to make lease payments and a right-of-use asset over the term of the lease. We also adopted the “package of practical expedients,” which permits us not to reassess our prior conclusions about lease identification, lease classification and initial direct costs under the new standard. We also elected the short-term lease exemption for all leases that qualify; as a result, we will not recognize right-of-use assets or lease liabilities for leases with a term of less than 12 months at inception. We lease office space under three operating leases. Our office leases are generally for terms of one |
Other assets | Other assetsOther assets includes leasehold improvements; furniture, fixtures and equipment; deferred tax assets, refunds due and miscellaneous other assets. The cost basis of fixed assets is depreciated using the straight-line method over an estimated useful life of three |
Revenue recognition | Revenue recognition Interest revenue is recognized based on the stated coupon when earned and deemed collectible or until a loan becomes more than 90 days past due, at which point the loan is place on nonaccrual status and any accrued interest is reversed against interest revenue. Upon a nonaccrual loan being reinstated, meaning all delinquent principal and interest payments have been remitted by the borrower, the loan will be placed back on accrual status. Interest accrued as of period end is included within loans for sale, at fair value, or loans held for investment, at fair value, in the Consolidated Balance Sheets as applicable. Loan fees represent origination fees charged to borrowers and are recognized to revenue upon the origination date of the loan. |
Share-based compensation | Share-based compensation We amortize the grant date fair value of restricted stock as expense on a straight-line basis over the service period with an offsetting increase in stockholders' equity. The grant date fair value of awards with only service-based vesting conditions is determined based upon the share price on the grant date. We recognize share-based compensation expense related to (i) awards to employees in salaries and employee benefits and (ii) awards to Directors or non-employees in general and administrative expense in our Consolidated Statements of Operations. Forfeitures of share-based awards are recognized as they occur. |
Treasury stock | Treasury stock We account for repurchased common stock under the cost method and include such treasury stock as a component of total stockholders’ equity. We have repurchased shares of our common stock (i) under our Board approval to repurchase up to $300.0 million in shares of our common stock and (ii) upon our withholding of shares of our common stock to satisfy tax withholding obligations in connection with the vesting of our restricted stock. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | The following table details the components comprising net income from our discontinued operations for the year ended December 31, 2021. ($ in thousands): Year ended December 31, 2021 Other income from discontinued operations: Gain on disposal $ 7,485 Total other income from discontinued operations 7,485 Net income from discontinued operations before income taxes 7,485 Income tax expense 1,272 Net income from discontinued operations $ 6,213 The following table details cash flow information related to our discontinued operations for the year ended December 31, 2021. ($ in thousands): Year ended December 31, 2021 Total operating cash flows from discontinued operations $ 5,439 Total investing cash flows from discontinued operations 511 Total financing cash flows from discontinued operations 80 |
Loans Held for Sale or Invest_2
Loans Held for Sale or Investment at Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable | The composition of the loan portfolio by classification as of December 31, 2022 and 2021, respectively, is summarized in the table below ($ in thousands): Held for Sale Held for Investment December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021 Total loan commitments $ 15,080 $ — $ 98,157 $ — Less: construction holdbacks (1) (3,350) — (13,188) — Total principal outstanding 11,730 — 84,969 — Change in fair value of loans (137) — (1,826) — Total loans at fair value $ 11,593 $ — $ 83,143 $ — (1) Construction holdbacks include in process accounts such as payments, advances, interest reserve, accrued interest and other accounts. The table below represents activity within the loan portfolio by classification for the period shown ($ in thousands): Loans Held for Sale Loans Held for Investment Balance at December 31, 2021 $ — $ — Acquisitions — 99,087 Originations 8,843 — Additional fundings 3,857 10,794 Interest receivable 91 1,262 Payoffs and repayments (1,061) (26,174) Fair value adjustment (137) (1,826) Balance at December 31, 2022 $ 11,593 $ 83,143 |
Loan Commitment Classified by Geographic Areas | The composition of the total loan commitment by state as of December 31, 2022 is summarized below ($ in thousands): State Commitment Percent of Portfolio Florida $ 32,422 28.6 % New York 22,250 19.6 % New Jersey 12,367 10.9 % California 12,513 11.1 % Washington 6,215 5.5 % Connecticut 4,374 3.9 % Texas 4,815 4.3 % Illinois 4,357 3.8 % Other 13,924 12.3 % Total $ 113,237 100.0 % |
Fair Value Measurements, Recurring and Nonrecurring | The following table presents the assets that are reported at fair value on a recurring basis as of December 31, 2022, as well as the fair value of hierarchy of the valuation inputs used to measure fair value. We did not have any assets that were reported at fair value as of December 31, 2021. We did not have any liabilities to report at fair value on a recurring basis as of December 31, 2022. December 31, 2022 Carrying Fair Value Measurements Using (In thousands) Value Level 1 Level 2 Level 3 Assets Loans held for sale $ 11,593 $ — $ — $ 11,593 Loans held for investment 83,143 — — 83,143 Total measured $ 94,736 $ — $ — $ 94,736 |
Equity Securities (Tables)
Equity Securities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Investment Gain/Losses | Investment gains/losses for December 31, 2022 and 2021, are summarized as follows ($ in thousands): Year ended December 31, 2022 2021 Equity securities: Investment gains on securities sold during the period $ — $ 8,347 — 8,347 Front Yard common stock: Investment gains on securities sold during the period — 146 — 146 Total change in fair value of equity securities and Front Yard common stock $ — $ 8,493 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of Maturity Analysis of Operating Leases | The following table presents a maturity analysis of our operating leases as of December 31, 2022 ($ in thousands): Operating Lease Liabilities 2022 $ 468 2023 330 2024 311 2025 321 2026 76 Total lease payments 1,506 Less: interest 183 Lease liabilities $ 1,323 |
Incentive Compensation and Sh_2
Incentive Compensation and Share-based Payments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity | The following table sets forth the activity of our outstanding options: Number of Options Weighted Average Exercise Price per Share December 31, 2020 67,225 12.13 Forfeited/expired (1) (61,375) 12.87 December 31, 2021 5,850 4.36 Exercised (2) (5,850) $ 4.36 December 31, 2022 — _____________ (1) 1,000 stock options expired on July 18, 2021 and 375 expired on July 21, 2021. All forfeited and expired options had a weighted average exercise price of $12.87. (2) 5,850 stock options were exercised on March 12, 2022 with a weighted average exercise price of $4.36. |
Schedule of Restricted Stock Activity | The following table sets forth the activity of our restricted stock: Number of Shares Weighted Average Grant Date Fair Value December 31, 2020 129,380 24.32 Granted 97,907 25.77 Vested (1) (162,051) 14.50 Forfeited/expired (50,000) 14.35 December 31, 2021 15,236 23.15 Granted 31,071 12.95 Vested (1) (9,903) 23.99 December 31, 2021 36,404 $ 14.22 _____________ (1) The vesting date fair value of restricted stock that vested during the years ended December 31, 2022, and 2021 was $0.2 million and $2.1 million, respectively. |
Schedule of Shares Reserved for Future Issuance | The following table sets forth the number of shares of common stock reserved for future issuance. We may issue new shares or issue shares from treasury shares upon the exercise of stock options or the vesting of restricted stock. December 31, 2022 Stock options outstanding — Possible future issuances under share-based compensation plans 91,217 91,217 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income by Jurisdiction | The following table sets forth the components of income (loss) from continuing operations before income taxes ($ in thousands): Year ended December 31, 2022 2021 U.S. Virgin Islands $ (15,584) $ (8,879) Other — (65) Loss before income taxes $ (15,584) $ (8,944) |
Schedule of Components of Income Tax Expense (Benefit) | The provision (benefit) for income taxes from continuing operations is summarized as follows ($ in thousands): Year ended December 31, 2022 2021 Current Federal $ 195 $ 4,378 State 4 — International 55 203 Total current tax expense 254 4,581 Deferred Federal 94 (1,281) State 2 — International — (27) Total deferred tax expense (benefit) 96 (1,308) Total tax expense $ 350 $ 3,273 |
Schedule of Deferred Tax Assets and Liabilities | The following table sets forth the components of our total deferred tax assets ($ in thousands): December 31, 2022 December 31, 2021 Deferred tax assets: Stock compensation $ 2 $ 2 Accrued expenses 84 24 Net operating losses (1) 1,109 637 Lease liabilities 54 14 Other 76 1 Gross deferred tax assets 1,325 678 Deferred tax liability: Right-of-use lease assets 53 13 Investments 6 — Gross deferred tax liabilities 59 13 Net deferred tax asset before valuation allowance 1,266 665 Valuation allowance (1,266) (498) Deferred tax asset, net $ — $ 167 _____________ (1) Net operating loss (“NOL”) carry-forwards for tax years prior to 2018 expire in 2037. Beginning with 2018, NOLs are carried forward indefinitely. |
Schedule of Effective Income Tax Rate Reconciliation | The following table sets forth the reconciliation of the statutory USVI income tax rate from continuing operations to our effective income tax rate: Year ended December 31, 2022 2021 U.S. Virgin Islands income tax rate 23.1 % 23.1 % EDC benefits in the USVI (19.5) (48.2) Foreign tax rate differential (0.2) (0.2) Subpart F income — (18.5) Permanent and other (0.5) (1.6) Share-based compensation — (0.2) Valuation allowance (4.9) (4.8) Foreign Tax Credit — 13.6 Other Adjustments (0.3) — Effective income tax rate (2.3) % (36.8) % |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Components of Diluted Earnings (Loss) Per Share | The following table sets forth the components of diluted loss per share (in thousands, except share and per share amounts): Year ended December 31, 2022 2021 Numerator Continuing operations: Net loss from continuing operations $ (15,934) $ (12,217) Gain on preferred stock transactions 5,122 87,961 Numerator for basic and diluted EPS from continuing operations – net income (loss) from continuing operations attributable to common stockholders $ (10,812) $ 75,744 Discontinued operations: Numerator for basic and diluted EPS from discontinued operations - net gain from discontinued operations $ — 6,213 Total: Net loss $ (15,934) $ (6,004) Gain on preferred stock transactions 5,122 87,961 Numerator for basic and diluted EPS - net income attributable to common stockholders (10,812) 81,957 Denominator Weighted average common stock outstanding – basic 1,917,503 2,002,111 Weighted average common stock outstanding – diluted 1,917,503 2,162,378 Earnings (loss) per share of common stock – basic: Continuing operations - basic $ (5.64) $ 37.83 Discontinued operations - basic — 3.11 Earnings per basic common share $ (5.64) $ 40.94 Earnings (loss) per share of common stock – diluted: Continuing operations - diluted $ (5.64) $ 35.03 Discontinued operations - diluted — 2.87 Earnings per diluted common share $ (5.64) $ 37.90 |
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, as the Company had a net loss from continuing operations for each period presented ($ in thousands): Year ended December 31, 2022 2021 Denominator Stock options — — Restricted stock 16,965 — Preferred stock, if converted 115,434 — |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Details) | 3 Months Ended | 12 Months Ended | ||||||||||||
Jul. 18, 2022 USD ($) $ / shares shares | Jan. 06, 2022 USD ($) investor shares | Aug. 27, 2021 USD ($) shares | Feb. 17, 2021 USD ($) shares | Feb. 03, 2020 USD ($) $ / shares | Mar. 31, 2022 USD ($) | Sep. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) | Mar. 31, 2014 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) | Dec. 29, 2016 series_of_preferred_stock shares | May 26, 2016 $ / shares | |
Organization and Basis of Presentation [Line Items] | ||||||||||||||
Loans receivable, threshold period past due | 90 days | |||||||||||||
Preferred stock, shares issued (in shares) | shares | 250,000 | 250,000 | 250,000 | |||||||||||
Proceeds from issuance of convertible preferred stock | $ 250,000,000 | |||||||||||||
Temporary equity, redemption period | 5 years | |||||||||||||
Redemption price per share (in USD per share) | $ / shares | $ 1,000 | $ 1,000 | ||||||||||||
Preferred stock, conversion price per share (in USD per share) | $ / shares | $ 1,250 | |||||||||||||
Exchange ratio for preferred stock to common stock | 0.8 | |||||||||||||
Loss contingency, damages awarded, number of business days to pay | 3 days | |||||||||||||
Preferred stock conversion | $ 5,122,000 | $ 95,014,000 | ||||||||||||
Stock repurchased during period (in shares) | shares | 286,873 | |||||||||||||
Stock repurchased during period, value | $ 2,868,730 | $ 2,881,000 | ||||||||||||
Price of common stock repurchased ( in usd per share) | $ / shares | $ 10 | |||||||||||||
Number of institutional investors in settlement agreement | investor | 2 | |||||||||||||
Preferred stock, par value (in USD per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||||||||
Number of additional series of preferred stock authorized | series_of_preferred_stock | 14 | |||||||||||||
Number of shares each new series of preferred stock authorizes (in shares) | shares | 1,000 | |||||||||||||
Dividends declared and paid on preferred stock | $ 400,000 | $ 400,000 | $ 1,600,000 | |||||||||||
Additional Paid-in Capital | ||||||||||||||
Organization and Basis of Presentation [Line Items] | ||||||||||||||
Preferred stock conversion | $ 71,900,000 | 5,122,000 | 95,012,000 | |||||||||||
Preferred stock | ||||||||||||||
Organization and Basis of Presentation [Line Items] | ||||||||||||||
Accounts payable and accrued liabilities | $ 32,000 | $ 12,000 | ||||||||||||
Luxor | ||||||||||||||
Organization and Basis of Presentation [Line Items] | ||||||||||||||
Damages sought | $ 150,000,000 | |||||||||||||
Luxor Capital Group, LP, et al. v. Altisource Asset Management Corporation | ||||||||||||||
Organization and Basis of Presentation [Line Items] | ||||||||||||||
Gain related to litigation settlement | $ 5,100,000 | |||||||||||||
Luxor Capital Group, LP, et al. v. Altisource Asset Management Corporation | Putnam | ||||||||||||||
Organization and Basis of Presentation [Line Items] | ||||||||||||||
Loss contingency, damages awarded | $ 1,636,000 | |||||||||||||
Loss contingency, damages awarded, due on one-year anniversary of the effective date of the agreement | $ 1,227,000 | |||||||||||||
Settlement Agreement with Wellington | ||||||||||||||
Organization and Basis of Presentation [Line Items] | ||||||||||||||
Amount awarded to other party | $ 2,093,000 | |||||||||||||
Gain related to litigation settlement | $ 16,100,000 | |||||||||||||
Minimum | Luxor | ||||||||||||||
Organization and Basis of Presentation [Line Items] | ||||||||||||||
Damages sought | 144,212,000 | |||||||||||||
Series A Preferred Stock | ||||||||||||||
Organization and Basis of Presentation [Line Items] | ||||||||||||||
Preferred stock, liquidation preference | $ 5,790,000 | $ 250,000,000 | ||||||||||||
Litigation settlement, shares awarded from other party (in shares) | shares | 5,788 | |||||||||||||
Series A Preferred Stock | Luxor Capital Group, LP, et al. v. Altisource Asset Management Corporation | ||||||||||||||
Organization and Basis of Presentation [Line Items] | ||||||||||||||
Amount awarded to other party | $ 665,000 | |||||||||||||
Series A Preferred Stock | Luxor Capital Group, LP, et al. v. Altisource Asset Management Corporation | Putnam | ||||||||||||||
Organization and Basis of Presentation [Line Items] | ||||||||||||||
Shares converted (in shares) | shares | 81,800 | |||||||||||||
Series A Preferred Stock | Settlement Agreement with Wellington | ||||||||||||||
Organization and Basis of Presentation [Line Items] | ||||||||||||||
Preferred stock, liquidation preference | $ 18,200,000 | |||||||||||||
Litigation settlement, shares awarded from other party (in shares) | shares | 18,200 | |||||||||||||
Common Stock | Luxor Capital Group, LP, et al. v. Altisource Asset Management Corporation | Putnam | ||||||||||||||
Organization and Basis of Presentation [Line Items] | ||||||||||||||
Shares issued related to conversion of stock (in shares) | shares | 288,283 | |||||||||||||
Redeemable Preferred Stock | ||||||||||||||
Organization and Basis of Presentation [Line Items] | ||||||||||||||
Preferred stock, shares issued (in shares) | shares | 3,200 | 1,200 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) lease | |
Property, Plant and Equipment [Line Items] | |
Number of operating leases | lease | 3 |
Authorized amount of stock to repurchase | $ | $ 300 |
Minimum | |
Property, Plant and Equipment [Line Items] | |
Operating lease, term of contract | 1 year |
Property useful life | 3 years |
Maximum | |
Property, Plant and Equipment [Line Items] | |
Operating lease, term of contract | 5 years |
Property useful life | 5 years |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |||
Gain on sale of discontinued operations, net of tax expense | $ 6,200 | $ 0 | $ 6,213 |
Discontinued Operations - Incom
Discontinued Operations - Income Statement (Details) - Discontinued Operations $ in Thousands | 12 Months Ended |
Dec. 31, 2021 USD ($) | |
Other income from discontinued operations: | |
Gain on disposal | $ 7,485 |
Total other income from discontinued operations | 7,485 |
Net income from discontinued operations before income taxes | 7,485 |
Income tax expense | 1,272 |
Net income from discontinued operations | $ 6,213 |
Discontinued Operations - Cash
Discontinued Operations - Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Total operating cash flows from discontinued operations | $ 0 | $ 5,439 |
Total investing cash flows from discontinued operations | 0 | 511 |
Total financing cash flows from discontinued operations | $ 0 | $ 80 |
Loans Held for Sale or Invest_3
Loans Held for Sale or Investment at Fair Value - Schedule of Accounts, Notes, Loans and Financing Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loan commitments | $ 113,237 | |
Total loans at fair value | 83,143 | $ 0 |
Loans Held For Sale | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loan commitments | 15,080 | 0 |
Less: construction holdbacks | (3,350) | 0 |
Total principal outstanding | 11,730 | 0 |
Change in fair value of loans | (137) | 0 |
Total loans at fair value | 11,593 | 0 |
Loan Held For Investment | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loan commitments | 98,157 | 0 |
Less: construction holdbacks | (13,188) | 0 |
Total principal outstanding | 84,969 | 0 |
Change in fair value of loans | (1,826) | 0 |
Total loans at fair value | $ 83,143 | $ 0 |
Loans Held for Sale or Invest_4
Loans Held for Sale or Investment at Fair Value - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) loan | Dec. 31, 2021 USD ($) | |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Number of loan portfolio | loan | 128 | |
Weighted average coupon | 9.40% | |
Net yield | 8.50% | |
Weighted average life, terms | 8 months 6 days | |
Number of loan outstanding | loan | 19 | |
Percentage of outstanding total principal amount | 60% | |
Number of loans on nonaccrual status or 90 days or more past due | loan | 1 | |
Carry value of nonaccrual loan | $ | $ 600,000 | |
Valuation Technique, Discounted Cash Flow | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Net yield | 11.40% | |
Valuation Technique, Discounted Cash Flow | Portfolio Loans | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Net yield | 7.70% | |
Fair Value Measurements, Recurring | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Assets, fair value disclosure | $ | $ 94,736,000 | $ 0 |
Liabilities, fair value disclosure | $ | $ 0 | $ 0 |
Loans Held for Sale or Invest_5
Loans Held for Sale or Investment at Fair Value - Schedule Of Accounts Loan Portfolio By Classification (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | |
Balance at December 31, 2021 | $ 0 |
Balance at December 31, 2022 | 83,143 |
Loans Held For Sale | |
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | |
Balance at December 31, 2021 | 0 |
Acquisitions | 0 |
Originations | 8,843 |
Additional fundings | 3,857 |
Interest receivable | 91 |
Payoffs and repayments | (1,061) |
Fair value adjustment | (137) |
Balance at December 31, 2022 | 11,593 |
Loan Held For Investment | |
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | |
Balance at December 31, 2021 | 0 |
Acquisitions | 99,087 |
Originations | 0 |
Additional fundings | 10,794 |
Interest receivable | 1,262 |
Payoffs and repayments | (26,174) |
Fair value adjustment | (1,826) |
Balance at December 31, 2022 | $ 83,143 |
Loans Held for Sale or Invest_6
Loans Held for Sale or Investment at Fair Value - Loan Commitment Classified by Geographic Areas (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Commitment | $ 113,237 | |
Percent of Portfolio | 100% | |
Florida | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Commitment | 32,422 | |
Percent of Portfolio | 28.60% | |
New York | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Commitment | 22,250 | |
Percent of Portfolio | 19.60% | |
New Jersey | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Commitment | 12,367 | |
Percent of Portfolio | 10.90% | |
California | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Commitment | 12,513 | |
Percent of Portfolio | 11.10% | |
Washington | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Commitment | 6,215 | |
Percent of Portfolio | 5.50% | |
Connecticut | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Commitment | 4,374 | |
Percent of Portfolio | 3.90% | |
Texas | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Commitment | 4,815 | |
Percent of Portfolio | 4.30% | |
Illinois | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Commitment | 4,357 | |
Percent of Portfolio | 3.80% | |
Other | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Commitment | $ 13,924 | |
Percent of Portfolio | 12.30% |
Loans Held for Sale or Invest_7
Loans Held for Sale or Investment at Fair Value - Fair Value Measurements, Recurring (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale, at fair value | $ 11,593,000 | $ 0 |
Loans held for investment, at fair value | 83,143,000 | 0 |
Fair Value Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale, at fair value | 11,593,000 | |
Loans held for investment, at fair value | 83,143,000 | |
Total measured | 94,736,000 | $ 0 |
Fair Value Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale, at fair value | 0 | |
Loans held for investment, at fair value | 0 | |
Total measured | 0 | |
Fair Value Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale, at fair value | 0 | |
Loans held for investment, at fair value | 0 | |
Total measured | 0 | |
Fair Value Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale, at fair value | 11,593,000 | |
Loans held for investment, at fair value | 83,143,000 | |
Total measured | $ 94,736,000 |
Equity Securities - Schedule of
Equity Securities - Schedule of Investment Gain/Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Equity Securities without Readily Determinable Fair Value [Line Items] | ||
Total change in fair value | $ 0 | $ 8,493 |
Equity Securities | ||
Equity Securities without Readily Determinable Fair Value [Line Items] | ||
Investment gains on securities sold during the period | 0 | 8,347 |
Total change in fair value | 0 | 8,347 |
Common Stock | ||
Equity Securities without Readily Determinable Fair Value [Line Items] | ||
Investment gains on securities sold during the period | 0 | 146 |
Total change in fair value | $ 0 | $ 146 |
Equity Securities - Narrative (
Equity Securities - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Investment Holdings [Line Items] | ||
Proceeds from sale of interest in equity securities | $ 0 | $ 152,796,000 |
Common Stock | ||
Investment Holdings [Line Items] | ||
Proceeds from sale of interest in equity securities | 47,500,000 | |
Equity Securities | ||
Investment Holdings [Line Items] | ||
Proceeds from sale of interest in equity securities | $ 105,300,000 |
Borrowings (Details)
Borrowings (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2022 | Aug. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Line of Credit Facility [Line Items] | ||||
Credit facility, outstanding balance | $ 51,653 | $ 51,653 | $ 0 | |
NexBank Line | ||||
Line of Credit Facility [Line Items] | ||||
Credit facility, outstanding balance | 9,200 | 9,200 | ||
Flagstar Line | ||||
Line of Credit Facility [Line Items] | ||||
Credit facility, outstanding balance | 42,500 | 42,500 | ||
Line of Credit | NexBank Line | ||||
Line of Credit Facility [Line Items] | ||||
Borrowing capacity | $ 50,000 | 50,000 | ||
Term for each draw on the line | 180 days | |||
Debt instrument, term | 364 days | |||
Average borrowing rate | 5.60% | |||
Weighted average remaining term | 156 days | |||
Credit facility, collateralized amount | $ 10,400 | $ 10,400 | ||
Line of Credit | NexBank Line | Minimum | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 3.50% | |||
Line of Credit | NexBank Line | Maximum | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 4.25% | |||
Line of Credit | Flagstar Line | ||||
Line of Credit Facility [Line Items] | ||||
Borrowing capacity | $ 50,000 | |||
Term for each draw on the line | 180 days | |||
Debt instrument, term | 364 days | |||
Average borrowing rate | 7.30% | |||
Weighted average remaining term | 134 days | |||
Credit facility, collateralized amount | $ 57,400 | $ 57,400 | ||
Required restricted cash balance | $ 2,000 | |||
Interest payable term | 90 days |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Operating lease, weighted average remaining lease term | 3 years 9 months 18 days | 5 years 1 month 6 days |
Operating lease, discount rate | 7% | 7% |
Operating lease cost | $ 300,000 | $ 200,000 |
Short-term lease cost | 0 | 0 |
Finance lease, liability | $ 0 | $ 0 |
Leases - Maturity Analysis of O
Leases - Maturity Analysis of Operating Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating Lease Liabilities | ||
2022 | $ 468 | |
2023 | 330 | |
2024 | 311 | |
2025 | 321 | |
2026 | 76 | |
Total lease payments | 1,506 | |
Less: interest | 183 | |
Lease liabilities | $ 1,323 | $ 859 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 12 Months Ended | |||
Dec. 29, 2022 USD ($) | Oct. 19, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Former Chief Executive Officer, Indroneel Chatterjee | ||||
Loss Contingencies [Line Items] | ||||
Amount awarded to company | $ 1,000,000 | $ 400,000 | $ 1,600,000 | |
Amount awarded to company, interest rate | 0.090 | |||
Reimbursement of legal expenses | $ 140,000 | |||
Erbey Holding Corporation et al. v. Blackrock Management Inc., et al. | ||||
Loss Contingencies [Line Items] | ||||
Gain contingency | $ 0 | $ 0 |
Incentive Compensation and Sh_3
Incentive Compensation and Share-based Payments - Long-Term Incentive Compensation (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Share-based compensation arrangement by share-based payment award [Line Items] | |
Weighting of Company's performance based on board of director objectives | 80% |
Personal evaluation weighting | 20% |
Minimum | |
Share-based compensation arrangement by share-based payment award [Line Items] | |
Non-equity incentive compensation percentage | 50% |
Maximum | |
Share-based compensation arrangement by share-based payment award [Line Items] | |
Non-equity incentive compensation percentage | 200% |
Incentive Compensation and Sh_4
Incentive Compensation and Share-based Payments - Stock Option Activity (Details) - USD ($) | 12 Months Ended | ||||
Mar. 12, 2022 | Jul. 21, 2021 | Jul. 18, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | |||||
Share-based compensation | $ 0 | $ 21,000 | |||
Number of Options | |||||
Beginning balance (in shares) | 5,850 | 67,225 | |||
Forfeited/expired (in shares) | (61,375) | ||||
Exercised (in shares) | (5,850) | ||||
Ending balance (in shares) | 0 | 5,850 | |||
Weighted Average Exercise Price per Share | |||||
Beginning balance (in USD per share) | $ 4.36 | $ 12.13 | |||
Forfeited/expired (in USD per share) | 12.87 | ||||
Exercised (in USD per share) | 4.36 | ||||
Ending balance (in USD per share) | $ 4.36 | ||||
Stock options expired (in shares) | 5,850 | 375 | 1,000 | ||
Exercise price (in USD per share) | $ 4.36 | $ 12.87 | |||
Stock options outstanding (in shares) | 0 | 5,850 | |||
Stock options outstanding, weighted average remaining life | 2 months 12 days | ||||
Weighted average exercise price of exercisable options (in USD per share) | $ 4.36 | ||||
Stock options outstanding, intrinsic value | $ 100,000 |
Incentive Compensation and Sh_5
Incentive Compensation and Share-based Payments - Restricted Stock Activity (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) installment $ / shares shares | Dec. 31, 2021 USD ($) installment $ / shares shares | |
Share-based compensation arrangement by share-based payment award [Line Items] | ||
Share-based compensation | $ | $ 0 | $ 21,000 |
Unrecognized stock compensation | $ | $ 300,000 | $ 300,000 |
Restricted stock | ||
Share-based compensation arrangement by share-based payment award [Line Items] | ||
Number of shares granted (in shares) | 31,071 | 97,907 |
Weighted average grant date fair value of grants in period (in USD per share) | $ / shares | $ 12.95 | $ 25.77 |
Forfeited (in shares) | 50,000 | |
Weighted average grant date fair value of shares forfeited (in USD per share) | $ / shares | $ 14.35 | |
Share-based compensation | $ | $ 200,000 | $ 1,800,000 |
Weighted average remaining amortization period of unamortized share based compensation (in years) | 1 year 1 month 6 days | 1 year 2 months 12 days |
Restricted stock | Management | ||
Share-based compensation arrangement by share-based payment award [Line Items] | ||
Number of shares granted (in shares) | 22,500 | 90,671 |
Number of annual installments | installment | 3 | 3 |
Restricted stock | Management | Vesting tranche one | ||
Share-based compensation arrangement by share-based payment award [Line Items] | ||
Number of shares granted (in shares) | 82,671 | |
Weighted average grant date fair value of grants in period (in USD per share) | $ / shares | $ 9.89 | $ 26.25 |
Restricted stock | Management | Vesting tranche two | ||
Share-based compensation arrangement by share-based payment award [Line Items] | ||
Number of shares granted (in shares) | 8,000 | |
Weighted average grant date fair value of grants in period (in USD per share) | $ / shares | $ 21.58 | |
Restricted stock | Directors | ||
Share-based compensation arrangement by share-based payment award [Line Items] | ||
Number of shares granted (in shares) | 8,571 | 7,236 |
Weighted average grant date fair value of grants in period (in USD per share) | $ / shares | $ 21 | $ 24.88 |
Value of restricted stock granted to directors annually | $ | $ 60,000 | |
Director attendance requirement | 75% |
Incentive Compensation and Sh_6
Incentive Compensation and Share-based Payments - Schedule of Restricted Stock Activity (Details) - Restricted stock - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Number of Shares | |||
Beginning balance (in shares) | 15,236 | 129,380 | |
Granted (in shares) | 31,071 | 97,907 | |
Vested (in shares) | (9,903) | (162,051) | |
Forfeited/expired (in shares) | (50,000) | ||
Ending balance (in shares) | 36,404 | 15,236 | |
Weighted Average Grant Date Fair Value | |||
Beginning balance (in USD per share) | $ 14.22 | $ 23.15 | $ 24.32 |
Granted (in USD per share) | 12.95 | 25.77 | |
Vested (in USD per share) | 23.99 | 14.50 | |
Forfeited/expired (in USD per share) | 14.35 | ||
Ending balance (in USD per share) | $ 14.22 | $ 23.15 | $ 24.32 |
Vesting date fair value of restricted stock that vested | $ 0.2 | $ 2.1 |
Incentive Compensation and Sh_7
Incentive Compensation and Share-based Payments - Schedule of Shares Reserved for Future Issuance (Details) - shares | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Share-Based Payment Arrangement [Abstract] | |||
Stock options outstanding (in shares) | 0 | 5,850 | 67,225 |
Possible future issuances under equity incentive plan (in shares) | 91,217 | ||
Common stock reserved for future issuance (in shares) | 91,217 | ||
Common stock, shares available to be issued under charter (in shares) | 1,567,706 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) employee | Dec. 31, 2021 USD ($) | |
Income Tax Disclosure [Abstract] | ||
Income tax exemption, percentage | 90% | |
Minimum employee requirement | employee | 5 | |
Cumulative loss position, duration | 3 years | |
Increase in valuation allowance | $ 768,000 | |
Unrecognized tax benefit, interest and penalties expensed | 0 | $ 0 |
Unrecognized tax benefit, interest and penalties accrued | $ 0 | $ 0 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income by Jurisdiction (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of income by jurisdiction [Line Items] | ||
Loss before income taxes | $ (15,584) | $ (8,944) |
U.S. Virgin Islands | ||
Schedule of income by jurisdiction [Line Items] | ||
Loss before income taxes | (15,584) | (8,879) |
Other | ||
Schedule of income by jurisdiction [Line Items] | ||
Loss before income taxes | $ 0 | $ (65) |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Current | ||
Federal | $ 195 | $ 4,378 |
State | 4 | 0 |
International | 55 | 203 |
Total current tax expense | 254 | 4,581 |
Deferred | ||
Federal | 94 | (1,281) |
State | 2 | 0 |
International | 0 | (27) |
Total deferred tax expense (benefit) | 96 | (1,308) |
Total tax expense | $ 350 | $ 3,273 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Stock compensation | $ 2 | $ 2 |
Accrued expenses | 84 | 24 |
Net operating losses | 1,109 | 637 |
Lease liabilities | 54 | 14 |
Other | 76 | 1 |
Gross deferred tax assets | 1,325 | 678 |
Deferred tax liability: | ||
Right-of-use lease assets | 53 | 13 |
Investments | 6 | 0 |
Gross deferred tax liabilities | 59 | 13 |
Net deferred tax asset before valuation allowance | 1,266 | 665 |
Valuation allowance | (1,266) | (498) |
Deferred tax asset, net | $ 0 | $ 167 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
U.S. Virgin Islands income tax rate | 23.10% | 23.10% |
EDC benefits in the USVI | (19.50%) | (48.20%) |
Foreign tax rate differential | (0.20%) | (0.20%) |
Subpart F income | 0% | (18.50%) |
Permanent and other | (0.50%) | (1.60%) |
Share-based compensation | 0% | (0.20%) |
Valuation allowance | (4.90%) | (4.80%) |
Foreign Tax Credit | 0% | 13.60% |
Other Adjustments | (0.30%) | 0% |
Effective income tax rate | (2.30%) | (36.80%) |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Components of Diluted Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Numerator | ||
Net loss from continuing operations | $ (15,934) | $ (12,217) |
Gain on preferred stock transactions | 5,122 | 87,961 |
Numerator for basic and diluted EPS from continuing operations – net income (loss) from continuing operations attributable to common stockholders | (10,812) | 75,744 |
Discontinued operations: | ||
Net income from discontinued operations | 0 | 6,213 |
Net loss | (15,934) | (6,004) |
Gain on preferred stock transactions | 5,122 | 87,961 |
Numerator for diluted EPS - (loss) income available to common stockholders after assumed conversions | $ (10,812) | $ 81,957 |
Denominator | ||
Weighted average common stock outstanding – basic (in shares) | 1,917,503 | 2,002,111 |
Weighted average common stock outstanding – diluted (in shares) | 1,917,503 | 2,162,378 |
Earnings per share of common stock - Basic: | ||
Continuing operations - basic ( in USD per share) | $ (5.64) | $ 37.83 |
Discontinued operations - basic (in USD per share) | 0 | 3.11 |
Earnings (loss) per basic common share (in USD per share) | (5.64) | 40.94 |
Earnings per share of common stock - Diluted: | ||
Continuing operations - diluted (in USD per share) | (5.64) | 35.03 |
Discontinued operations - diluted (in USD per share) | 0 | 2.87 |
Earnings (loss) per diluted common share (in USD per share) | $ (5.64) | $ 37.90 |
Earnings Per Share - Schedule_2
Earnings Per Share - Schedule of Antidilutive Securities Excluded From Computation of Earnings Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Stock options | ||
Denominator | ||
Antidilutive shares excluded from computation of earnings per share (in shares) | 0 | 0 |
Restricted stock | ||
Denominator | ||
Antidilutive shares excluded from computation of earnings per share (in shares) | 16,965 | 0 |
Preferred stock | ||
Denominator | ||
Antidilutive shares excluded from computation of earnings per share (in shares) | 115,434 | 0 |