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Altisource Asset Management(AAMC) - 2023 Q4 - Annual Report
AAMCAltisource Asset Management(AAMC)2024-03-29 12:40

Financial Performance - Loan interest income increased to 4.9millionin2023from4.9 million in 2023 from 4.6 million in 2022, representing a growth of approximately 6.5%[136] - Loan fee income rose to 0.5millionin2023from0.5 million in 2023 from 0.4 million in 2022, marking a 25% increase[137] - Realized losses on loans held for sale were 2.2millionin2023,comparedtonolossesin2022,indicatingasignificantshiftinportfolioperformance[138]Expenses−Salariesandemployeebenefitsdecreasedto2.2 million in 2023, compared to no losses in 2022, indicating a significant shift in portfolio performance[138] Expenses - Salaries and employee benefits decreased to 5.7 million in 2023 from 5.8millionin2022,reflectingareductioninoverallcompensationcosts[139]−Legalfeesdecreasedto5.8 million in 2022, reflecting a reduction in overall compensation costs[139] - Legal fees decreased to 3.1 million in 2023 from 4.3millionin2022,primarilyduetolowerlitigationcosts[140]−Generalandadministrativeexpensesdecreasedto4.3 million in 2022, primarily due to lower litigation costs[140] - General and administrative expenses decreased to 3.3 million in 2023 from 3.5millionin2022,despiteincreasesincertainoperationalcosts[141]−Interestexpenseincreasedto3.5 million in 2022, despite increases in certain operational costs[141] - Interest expense increased to 2.8 million in 2023 from 1.3millionin2022,attributedtothedevelopmentoftheALGlineofbusiness[143]LoanPortfolio−Loansheldforsaledecreasedto1.3 million in 2022, attributed to the development of the ALG line of business[143] Loan Portfolio - Loans held for sale decreased to 4.5 million as of December 31, 2023, from 11.6millionin2022,drivenbyadecisiontoliquidatetheloanportfolio[150]−Loansheldforinvestmentdecreasedto11.6 million in 2022, driven by a decision to liquidate the loan portfolio[150] - Loans held for investment decreased to 5.6 million as of December 31, 2023, from 83.1millionin2022,reflectingasimilarliquidationstrategy[151]CashandFinancingActivities−Cashandcashequivalentsdecreasedto83.1 million in 2022, reflecting a similar liquidation strategy[151] Cash and Financing Activities - Cash and cash equivalents decreased to 8.7 million as of December 31, 2023, from 10.7millionin2022,primarilyduetoloanpurchases[149]−NetcashusedinfinancingactivitiesfortheyearendedDecember31,2023,primarilyconsistedoffundsborrowedandrepaidundertheCompany′slinesofcredit[159]Off−BalanceSheetandEquity−TheCompanyhadnooff−balancesheetarrangementsasofDecember31,2023or2022[160]−TheSeriesApreferredstockisclassifiedastemporaryequity,withanaggregateredemptionrequestof10.7 million in 2022, primarily due to loan purchases[149] - Net cash used in financing activities for the year ended December 31, 2023, primarily consisted of funds borrowed and repaid under the Company's lines of credit[159] Off-Balance Sheet and Equity - The Company had no off-balance sheet arrangements as of December 31, 2023 or 2022[160] - The Series A preferred stock is classified as temporary equity, with an aggregate redemption request of 250.0 million made on March 15, 2020, which the Company could not fulfill due to lack of legally available funds[164] Fair Value and Internal Control - The Company has elected the fair value option for its business purpose loans held for sale and investment, which are carried at estimated fair value, affecting reported earnings and financial condition[165] - Management assessed the effectiveness of internal control over financial reporting as of December 31, 2023, concluding it was effective in providing reasonable assurance regarding the reliability of financial reporting[170] - There were no changes in internal control over financial reporting that materially affected the Company during the year ended December 31, 2023[172] - The Company does not expect its controls to prevent or detect all errors or fraud, acknowledging inherent limitations[173]