Florida
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1-13219
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65-0039856
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||
(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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o
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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o
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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o
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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o
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item
2.02.
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Results of Operations and Financial Condition. |
The news release of the Registrant dated February 24, 2011, announcing its results for the fourth quarter and year 2010 is attached hereto as Exhibit 99.1. The information in Exhibit 99.1 attached hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
Item
9.01.
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Financial Statements and Exhibits. |
(a) – (c) Not applicable.
(d) Exhibits:
99.1 Text of a press release by the Registrant dated February 24, 2011.
OCWEN FINANCIAL CORPORATION
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||
(Registrant)
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||
Date: February 24, 2011
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By:
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/s/ John Van Vlack
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John Van Vlack | ||
Executive Vice President, Chief Financial Officer and Chief Accounting Officer (On behalf of the Registrant and as its principal financial officer) |
Ocwen Financial Corporation®
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FOR IMMEDIATE RELEASE
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FOR FURTHER INFORMATION CONTACT:
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John P. Van Vlack
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Executive Vice President, Chief Financial Officer &
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Chief Accounting Officer
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T: (561) 682-7721
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E: John.VanVlack@Ocwen.com
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●
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Non-recurring transaction related expenses for the HomEq servicing acquisition of $17.5 million consisting primarily of $14.6 million in Occupancy and Equipment expense from writing-off leasehold improvements and establishing a reserve for the discounted future rent and lease termination fees on the two HomEq facilities which were acquired and closed in 2010 and severance and WARN Act compensation of $2.6 million.
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●
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Interest expense of $1.2 million representing incremental amortization of up-front fees and original issue discount on the Senior Secured Term Loan related to the partial prepayment of this loan in 2010.
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●
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Reduced servicing advances by $237.0 million, or 10.1%.
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●
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Completed 19,999 loan modifications of which 20% were HAMP modifications which exceeded the upper end of guidance of 16,000 to 19,000.
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●
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Made a $135.0 million voluntary prepayment on the Senior Secured Term Loan which along with the mandatory repayments reduced the outstanding balance to $197.5 million as of December 31, 2010. (Additional voluntary prepayments of $162.5 million were made subsequent to year-end.)
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●
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Gain of $6.0 million representing Ocwen’s share of proceeds from the sale of three low income housing partnerships with no book value.
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●
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Realized loss of $4.0 million on the sale of all remaining Auction Rate Securities.
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At or for the three months ended
|
||||||||||||||||||||
December 31,
2010
|
September 30,
2010
|
June 30,
2010
|
March 31,
2010
|
December 31,
2009
|
||||||||||||||||
Total unpaid principal balance of loans and REO serviced
|
$ | 73,886,391 | $ | 76,140,022 | $ | 55,244,576 | $ | 49,677,999 | $ | 49,980,077 | ||||||||||
Non-performing loans and REO serviced as a % of total UPB (1)
|
27.3 | % | 27.2 | % | 26.2 | % | 25.3 | % | 25.6 | % | ||||||||||
Prepayment speed (average CPR)
|
13 | % | 13 | % | 13 | % | 12 | % | 15 | % |
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(1)
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The increase in non-performing loans and REO serviced as a % of total UPB is due entirely to the acquisition of portfolios with higher delinquency rates. Non-performing loans exclude those serviced under special servicing agreements where we have no obligation to advance.
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Three months
|
Twelve months
|
|||||||||||||||
For the periods ended December 31,
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
Ocwen Asset Management
|
||||||||||||||||
Servicing
|
||||||||||||||||
Revenue
|
$ | 113,216 | $ | 72,327 | $ | 359,798 | $ | 272,725 | ||||||||
Operating expenses
|
59,069 | 30,472 | 200,108 | 129,252 | ||||||||||||
Income from operations
|
54,147 | 41,855 | 159,690 | 143,473 | ||||||||||||
Other expense, net
|
(35,313 | ) | (12,555 | ) | (81,495 | ) | (55,792 | ) | ||||||||
Income from continuing operations before taxes
|
18,834 | 29,300 | 78,195 | 87,681 | ||||||||||||
Loans and Residuals
|
||||||||||||||||
Revenue
|
— | — | — | — | ||||||||||||
Operating expenses
|
862 | 631 | 4,240 | 2,831 | ||||||||||||
Loss from operations
|
(862 | ) | (631 | ) | (4,240 | ) | (2,831 | ) | ||||||||
Other income (expense), net
|
(2,124 | ) | (1,427 | ) | 1,394 | (6,290 | ) | |||||||||
Loss from continuing operations before taxes
|
(2,986 | ) | (2,058 | ) | (2,846 | ) | (9,121 | ) | ||||||||
Asset Management Vehicles
|
||||||||||||||||
Revenue
|
166 | 422 | 696 | 1,851 | ||||||||||||
Operating expenses
|
596 | 578 | 2,099 | 3,108 | ||||||||||||
Loss from operations
|
(430 | ) | (156 | ) | (1,403 | ) | (1,257 | ) | ||||||||
Other income (expense), net
|
(212 | ) | (1,594 | ) | 606 | (4,060 | ) | |||||||||
Loss from continuing operations before taxes
|
(642 | ) | (1,750 | ) | (797 | ) | (5,317 | ) | ||||||||
Income from continuing operations before taxes
|
15,206 | 25,492 | 74,552 | 73,243 | ||||||||||||
Ocwen Solutions
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||||||||||||||||
Mortgage Services
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||||||||||||||||
Revenue
|
— | — | — | 54,052 | ||||||||||||
Operating expenses
|
— | — | — | 37,040 | ||||||||||||
Income from operations
|
— | — | — | 17,012 | ||||||||||||
Other income, net
|
— | — | — | 803 | ||||||||||||
Income from continuing operations before taxes
|
— | — | — | 17,815 | ||||||||||||
Financial Services
|
||||||||||||||||
Revenue
|
— | — | — | 40,293 | ||||||||||||
Operating expenses
|
— | — | — | 45,002 | ||||||||||||
Loss from operations
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— | — | — | (4,709 | ) | |||||||||||
Other expense, net
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— | — | — | (1,260 | ) | |||||||||||
Loss from continuing operations before taxes
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— | — | — | (5,969 | ) | |||||||||||
Technology Products
|
||||||||||||||||
Revenue
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— | — | — | 28,331 | ||||||||||||
Operating expenses
|
— | — | — | 18,638 | ||||||||||||
Income from operations
|
— | — | — | 9,693 | ||||||||||||
Other expense, net
|
— | — | — | (103 | ) | |||||||||||
Income from continuing operations before taxes
|
— | — | — | 9,590 | ||||||||||||
Income from continuing operations before taxes
|
— | — | — | 21,436 | ||||||||||||
Corporate Items and Other
|
||||||||||||||||
Revenue
|
275 | 385 | 1,416 | 1,066 | ||||||||||||
Operating expenses
|
2,883 | 4,942 | 30,791 | 16,308 | ||||||||||||
Loss from operations
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(2,608 | ) | (4,557 | ) | (29,375 | ) | (15,242 | ) | ||||||||
Other income (expense), net
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2,561 | (741 | ) | (6,023 | ) | 13,824 | ||||||||||
Loss from continuing operations before taxes
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(47 | ) | (5,298 | ) | (35,398 | ) | (1,418 | ) | ||||||||
Corporate Eliminations
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||||||||||||||||
Revenue
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(384 | ) | (386 | ) | (1,529 | ) | (17,590 | ) | ||||||||
Operating expenses
|
(145 | ) | (117 | ) | (764 | ) | (16,525 | ) | ||||||||
Loss from operations
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(239 | ) | (269 | ) | (765 | ) | (1,065 | ) | ||||||||
Other income, net
|
239 | 269 | 765 | 1,065 | ||||||||||||
Income (loss) from continuing operations before taxes
|
— | — | — | — | ||||||||||||
Consolidated income from continuing operations before taxes
|
$ | 15,159 | $ | 20,194 | $ | 39,154 | $ | 93,261 |
Three months
|
Twelve months
|
|||||||||||||||
For the periods ended December 31,
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
Revenue
|
||||||||||||||||
Servicing and subservicing fees
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$ | 102,859 | $ | 62,635 | $ | 321,699 | $ | 264,467 | ||||||||
Process management fees
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9,572 | 9,710 | 33,704 | 108,082 | ||||||||||||
Other revenues
|
842 | 403 | 4,978 | 8,179 | ||||||||||||
Total revenue
|
113,273 | 72,748 | 360,381 | 380,728 | ||||||||||||
Operating expenses
|
||||||||||||||||
Compensation and benefits
|
17,892 | 12,862 | 87,644 | 87,620 | ||||||||||||
Amortization of mortgage servicing rights
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9,352 | 6,485 | 31,455 | 32,228 | ||||||||||||
Servicing and origination
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2,095 | 2,376 | 6,851 | 38,653 | ||||||||||||
Technology and communications
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7,062 | 5,712 | 25,644 | 20,066 | ||||||||||||
Professional services
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5,316 | 4,428 | 42,837 | 26,200 | ||||||||||||
Occupancy and equipment
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19,407 | 3,929 | 32,924 | 18,985 | ||||||||||||
Other operating expenses
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2,141 | 714 | 9,119 | 11,902 | ||||||||||||
Total operating expenses
|
63,265 | 36,506 | 236,474 | 235,654 | ||||||||||||
Income from operations
|
50,008 | 36,242 | 123,907 | 145,074 | ||||||||||||
Other income (expense)
|
||||||||||||||||
Interest income
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2,352 | 2,375 | 10,859 | 8,786 | ||||||||||||
Interest expense
|
(35,906 | ) | (12,846 | ) | (85,923 | ) | (62,954 | ) | ||||||||
Gain (loss) on trading securities
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(4,010 | ) | (2,159 | ) | (7,968 | ) | 11,187 | |||||||||
Loss on loans held for resale, net
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(3,239 | ) | (2,349 | ) | (5,865 | ) | (11,132 | ) | ||||||||
Equity in earnings (losses) of unconsolidated entities
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27 | (1,325 | ) | 1,371 | (2,933 | ) | ||||||||||
Other, net
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5,927 | 256 | 2,773 | 5,233 | ||||||||||||
Other expense, net
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(34,849 | ) | (16,048 | ) | (84,753 | ) | (51,813 | ) | ||||||||
Income from continuing operations before taxes
|
15,159 | 20,194 | 39,154 | 93,261 | ||||||||||||
Income tax expense
|
5,235 | 13,307 | 5,545 | 96,110 | ||||||||||||
Income (loss) from continuing operations
|
9,924 | 6,887 | 33,609 | (2,849 | ) | |||||||||||
Income from discontinued operations, net of taxes
|
— | 2,488 | 4,383 | 3,121 | ||||||||||||
Net income
|
9,924 | 9,375 | 37,992 | 272 | ||||||||||||
Net loss (income) attributable to non-controlling interests
|
(3 | ) | 14 | (8 | ) | 25 | ||||||||||
Net income attributable to Ocwen Financial Corporation (OCN)
|
$ | 9,921 | $ | 9,389 | $ | 37,984 | $ | 297 | ||||||||
Basic earnings per share
|
||||||||||||||||
Income (loss) from continuing operations
|
$ | 0.10 | $ | 0.07 | $ | 0.34 | $ | (0.04 | ) | |||||||
Income from discontinued operations
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— | 0.02 | 0.04 | 0.04 | ||||||||||||
Net income attributable to OCN
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$ | 0.10 | $ | 0.09 | $ | 0.38 | $ | — | ||||||||
Diluted earnings per share
|
||||||||||||||||
Income (loss) from continuing operations
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$ | 0.09 | $ | 0.07 | $ | 0.32 | $ | (0.04 | ) | |||||||
Inome from discontinued operations
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— | 0.02 | 0.04 | 0.04 | ||||||||||||
Net income attributable to OCN
|
$ | 0.09 | $ | 0.09 | $ | 0.36 | $ | — | ||||||||
Weighted average common shares outstanding
|
||||||||||||||||
Basic
|
100,610,141 | 99,871,247 | 100,273,121 | 78,252,000 | ||||||||||||
Diluted
|
107,441,874 | 107,150,497 | 107,483,015 | 78,252,000 |
December 31,
2010
|
December 31,
2009
|
|||||||
Assets
|
||||||||
Cash
|
$ | 127,796 | $ | 90,919 | ||||
Restricted cash – for securitization investors
|
727 | |||||||
Trading securities, at fair value:
|
||||||||
Auction rate
|
— | 247,464 | ||||||
Subordinates and residuals
|
— | 3,692 | ||||||
Loans held for resale, at lower of cost or fair value
|
25,803 | 33,197 | ||||||
Advances
|
184,833 | 145,914 | ||||||
Match funded advances
|
1,924,052 | 822,615 | ||||||
Loans, net – restricted for securitization investors
|
67,340 | — | ||||||
Mortgage servicing rights, net
|
193,985 | 117,802 | ||||||
Receivables, net
|
69,518 | 67,095 | ||||||
Deferred tax assets, net
|
138,716 | 132,683 | ||||||
Goodwill
|
12,810 | — | ||||||
Premises and equipment, net
|
5,475 | 3,325 | ||||||
Investments in unconsolidated entities
|
12,072 | 15,008 | ||||||
Other assets
|
158,282 | 89,636 | ||||||
Total assets
|
$ | 2,921,409 | $ | 1,769,350 | ||||
Liabilities and Equity
|
||||||||
Liabilities
|
||||||||
Match funded liabilities
|
$ | 1,482,529 | $ | 465,691 | ||||
Secured borrowings – owed to securitization investors
|
62,705 | — | ||||||
Lines of credit and other secured borrowings
|
246,073 | 55,810 | ||||||
Investment line
|
— | 156,968 | ||||||
Servicer liabilities
|
2,492 | 38,672 | ||||||
Debt securities
|
82,554 | 95,564 | ||||||
Other liabilities
|
140,239 | 90,782 | ||||||
Total liabilities
|
2,016,592 | 903,487 | ||||||
Equity
|
||||||||
Ocwen Financial Corporation stockholders’ equity
|
||||||||
Common stock, $.01 par value; 200,000,000 shares authorized; 100,726,947 and 99,956,833 shares issued and outstanding at December 31, 2010 and December 31, 2009, respectively
|
1,007 | 1,000 | ||||||
Additional paid-in capital
|
467,500 | 459,542 | ||||||
Retained earnings
|
445,456 | 405,198 | ||||||
Accumulated other comprehensive loss, net of income taxes
|
(9,392 | ) | (129 | ) | ||||
Total Ocwen Financial Corporation stockholders’ equity
|
904,571 | 865,611 | ||||||
Non-controlling interest in subsidiaries
|
246 | 252 | ||||||
Total equity
|
904,817 | 865,863 | ||||||
Total liabilities and equity
|
$ | 2,921,409 | $ | 1,769,350 |