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Altisource Asset Management(AAMC) - 2023 Q1 - Earnings Call Transcript
AAMCAltisource Asset Management(AAMC)2023-05-15 17:45
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Financial Data and Key Metrics Changes - First quarter earnings improved by 1.1million,reducingthefirstquarterlossto1.1 million, reducing the first quarter loss to 3 million on revenue of 2.1million[6][12]−Thecompanyoperateswithacapital−lightmodel,expectingtoearn2.1 million [6][12] - The company operates with a capital-light model, expecting to earn 7.50 for every dollar of capital deployed at the beginning of the year [5] Business Line Data and Key Metrics Changes - The product mix includes short duration high-yielding fixed income assets with a gross weighted average coupon of 9.5% to 12% [6] - The expected gross revenue per loan for residential transitional loans (RTLs) is in excess of 350 basis points, while for term and debt service coverage ratio (DSCR) loans, it is in excess of 250 basis points [9] Market Data and Key Metrics Changes - The direct-to-borrower origination pipeline is approximately 75million,andthewholesalechannelhasacommittedvolumeof75 million, and the wholesale channel has a committed volume of 45 million [10] - Net submissions averaged 10.7millionperweekoverthepastsevenweeks,indicatingstrongdemandforproducts[11]CompanyStrategyandDevelopmentDirection−Thecompanyisfocusedonscalingoperationsandperfectingprocessestoenhancecustomerexperienceandexecution[12]−Planstogolivewiththewholesaleplatformanddirect−to−brokerchannelinQ22023[9]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceinthestrengthofrelationshipswithbankpartners,statingthatregionalbankissueshavepositivelyimpactedthecompanybystrengtheningpartnerships[28]−Thecompanyisoptimisticaboutcontinuedgrowthinallthreeoriginationchannels[11]OtherImportantInformation−Thecompanyhasaddedthreeadditionaltakeoutinvestors,twoofwhichhaveinsurancemoney[8]−TheaverageloansizeforRTLsisapproximately10.7 million per week over the past seven weeks, indicating strong demand for products [11] Company Strategy and Development Direction - The company is focused on scaling operations and perfecting processes to enhance customer experience and execution [12] - Plans to go live with the wholesale platform and direct-to-broker channel in Q2 2023 [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of relationships with bank partners, stating that regional bank issues have positively impacted the company by strengthening partnerships [28] - The company is optimistic about continued growth in all three origination channels [11] Other Important Information - The company has added three additional takeout investors, two of which have insurance money [8] - The average loan size for RTLs is approximately 500,000, while for DSCR loans, it is approximately 300,000 [10] Q&A Session Summary Question: Growth in net submissions - Management acknowledged that net submissions have grown to an average of 10.7 million per week, indicating a strong upward trend [15][18] Question: Loan closing time and operational challenges - The average loan closing time is about 30 days, with improvements noted in the quality of loan packages over the past 30 days [20][22] Question: Stock repurchase plans - Management indicated that while they believe the stock is undervalued, they are currently prioritizing capital for loan originations over stock repurchases [26] Question: Impact of regional bank issues - Management stated that regional bank issues have not negatively affected the company, and relationships with bank partners have strengthened [28]