SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
-----------------------------------------------
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JULY 28, 1997
OCWEN FINANCIAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
FLORIDA 0-21341 65-0039856
(STATE OR OTHER (COMMISSION (I.R.S. EMPLOYER
JURISDICTION FILE NUMBER) IDENTIFICATION NO.)
OF INCORPORATION)
THE FORUM, SUITE 1000
1675 PALM BEACH LAKES BOULEVARD, WEST PALM BEACH, FLORIDA 33401
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)
(561) 681-8000
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
N/A
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
PAGE 1 OF 15
EXHIBIT INDEX ON PAGE 4
ITEM 5. OTHER EVENTS
The news release of Ocwen Financial Corporation dated July 28, 1997, regarding
its financial results for the three and six month periods ended June 30, 1997,
including unaudited consolidated financial statements for the three and six
month periods ended June 30, 1997, are attached and filed herewith as Exhibit
99.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
The following exhibit is filed as part of this report:
(99) News release of Ocwen Financial Corporation
dated July 28, 1997.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
OCWEN FINANCIAL CORPORATION
(Registrant)
By: /s/ Mark S. Zeidman
---------------------------------------
Mark S. Zeidman
Senior Vice President and
Chief Financial Officer
Date: July 28, 1997
3
INDEX TO EXHIBIT
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ----------- ----
99 News release of Ocwen Financial Corporation dated 5
July 28, 1997 regarding its financial results for
the three and six month periods ended June 30,
1997.
4
Ocwen Financial Corporation Exhibit 99
1675 Palm Beach Lakes Blvd.
West Palm Beach, FL 33401
NASDAQ: symbol: OCWN
================================================================================
NEWS RELEASE: IMMEDIATE July 28, 1997
OCWEN FINANCIAL CORPORATION REPORTS SECOND QUARTER RESULTS
Ocwen Financial Corporation ("Ocwen" or the "Company") reported net income of
$18.8 million in the second quarter of 1997, 57% higher than the second quarter
of 1996. Earnings per share for the quarter were $0.69 versus $0.45 for the same
period a year ago. The Company's annualized return on average assets and
annualized return on average common equity were 2.75% and 32.29%, respectively,
in the second quarter of 1997 compared with 2.27% and 32.30%, respectively, in
the second quarter 1996.
Net income for the first six months of 1997 totaled $35.8 million, up 138% from
the same period in 1996. Earnings per share were $1.32 for the six months ended
June 30, 1997 versus $0.57 for the same period in 1996.
SECOND QUARTER AND SIX MONTHS RESULTS AT A GLANCE
Second Quarter Six Months
- ----------------------------------------------------------------------------------------------------------
In thousands of dollars, except per share data 1997 1996 1997 1996
- ----------------------------------------------------------------------------------------------------------
Revenues $62,664 $33,744 $115,751 $ 56,860
Provision for loan losses (7,909) (4,964) (17,651) (14,370)
Operating expenses (30,837) (13,870) (53,534) (25,554)
Income tax expense (5,126) (2,911) (8,733) (1,910)
- ----------------------------------------------------------------------------------------------------------
Net income $18,792 $11,999 $35,833 $15,026
Net income per share $ 0.69 $ 0.45 $ 1.32 $ 0.57
- ----------------------------------------------------------------------------------------------------------
ALL REFERENCES BELOW REGARDING CHANGES ARE BASED ON COMPARISONS TO THE SAME
PERIOD A YEAR AGO.
Revenues rose $28.9 million or 86% in the second quarter of 1997 from a year ago
and were up 104% for the first six months of 1997.
o Non-interest income increased $25.2 million or 313% to $33.3 million in the
second quarter of 1997. This increase is due primarily to the $23.4 million
of gains on sales of interest earning assets in the second quarter of 1997
which is primarily comprised of a $16.8 million net gain earned in
connection with the securitization of single-family residential discount
mortgage loans and a $4.5 million gain in connection with securitization of
single-family loans to non-conforming borrowers. Also contributing to the
increase in non-interest income is a $3.4 million increase in servicing
fees and other charges which reflects a significant increase in loans
serviced for others. In the first six months of 1997, non-interest income
rose 381% to $54.6 million.
o Net interest income before provision for loan losses increased $3.5 million
or 14% to $28.1 million in the second quarter of 1997. In the first six
months of 1997, net interest income increased $1.0 million or 2% to $45.4
million. The increases in net interest income during 1997 were largely due
to significant increases in the average balance of interest-earning assets,
primarily discount loans, offset in part by a decline in net interest
margin.
o Equity in earnings of the Company's 50% investment in a joint venture,
which began operations in the second quarter of 1996, amounted to $1.3
million in the second quarter of 1997 as compared to $1.1 million in the
second quarter of 1996. Equity in earnings of investment in joint venture
amounted to $15.7 million for the first six months of 1997.
- --------------------------------------------------------------------------------
Contact: Christine A. Reich, Managing Director (561) 681-8569
- --------------------------------------------------------------------------------
5
Operating expenses rose $17.0 million or 122% in the second quarter of 1997.
o Compensation and employee benefits increased $11.1 million or 130%
primarily due to an increase in the average number of full time equivalent
employees and increased employee profit sharing expenses in line with
improved earnings.
o Occupancy and equipment expense increased $1.8 million or 82%.
o Other operating expenses increased $3.6 million or 102%.
Operating expenses increased $28.0 million or 109% in the first six months of
1997.
Ocwen Federal Bank FSB (the "Bank"), the Company's primary subsidiary, reported
net income for the second quarter of 1997 of $22.1 million as compared to $11.9
million for 1996. The Bank's net income for the first six months of 1997 and
1996 amounted to $40.7 and $15.4 million, respectively. At June 30, 1997 the
Bank's core capital and total risk-based capital ratios were 9.40% and 13.81%,
respectively.
RECENT DEVELOPMENTS
On June 10, 1997 the Company filed a Form S-1 registration statement with the
Securities and Exchange Commission ("SEC") to offer to the public 3,000,000
shares (plus up to 450,000 shares pursuant to the underwriters' over-allotment
options) of newly-issued common stock. Concurrently with the common stock
offering, Ocwen Capital Trust I, a newly formed Delaware business trust and
subsidiary of Ocwen, filed a Form S-1 registration statement with the SEC to
offer $125.0 million of capital securities. In addition, the Company has applied
to list its common stock on the New York Stock Exchange.
On June 23, 1997, the Company completed the securitization of 1,783
single-family residential discount loans with an aggregate unpaid principal
balance of $170.6 million. The Company recorded a net gain of $16.8 million on
the sale of the senior classes of securities in connection with this
transaction. The Company continues to service the loans for a fee and has
retained an interest in the related subordinate class security.
On June 27, 1997, the Company completed the securitization of 896 sub-prime
single-family residential mortgage loans with an aggregate unpaid principal
balance of $104.8 million. The Company recorded total gains of $4.5 million on
the sale of the senior classes of securities in connection with this
transaction. The Company continues to service the loans for a fee and has
retained an interest in the related residual class security.
During July 1997 the Company sold a 69% partnership interest in the Westin Hotel
for a minimal gain.
6
Currently the Company is one of only five special servicers of commercial
mortgage loans to have received a rating of "strong" from Standard & Poors
Ratings Services. In addition, the Company is rated a Tier 1 servicer and as a
preferred servicer for high-risk mortgages by the Federal Home Loan Mortgage
Corporation, the highest rating categories.
THE REMAINDER OF THIS RELEASE CONTAINS INFORMATION ON SPECIFIC AREAS OF RESULTS,
A FINANCIAL SUMMARY, AND THE CONSOLIDATED FINANCIAL STATEMENTS.
7
REVENUES
NET INTEREST INCOME
Interest income of $66.9 million for the second quarter of 1997 increased by
$15.4 million or 30% over that of the second quarter of 1996 as a result of an
$816.5 million or 54% increase in the average balance of interest-earning assets
offset in part by a 210 basis point decline in the average yield earned. The
average yield on interest-earning assets was 11.47% and 13.57% in the second
quarter of 1997 and 1996, respectively, and 10.79% and 12.65% in the first six
months of 1997 and 1996, respectively. The decline in yields for these periods
in 1997 was primarily attributable to increases in the average balance of
single-family discount loans held coupled with the Company's decision to cease
accretion of discount on such loans effective January 1, 1997. As a result of
the Company's decision to cease accretion of discount, the Company now
recognizes income on its nonperforming single-family loans at the time of payoff
or sale rather than over the anticipated holding period.
Interest expense of $38.9 million for the second quarter of 1997 increased by
$12.0 million or 44% over the comparable period in the prior year as a result of
a $695.9 million or 42% increase in the average balance of interest-bearing
liabilities and an 11 basis point increase in the average rate paid. For the
first six months of 1997, interest expense amounted to $76.0 million, a $21.0
million or 38% increase over the same period of the prior year.
As a result of the above, net interest income before provision for loan losses
of $28.1 million for the second quarter of 1997 increased by $3.5 million or 14%
from the second quarter of 1996 and the net interest margin for the second
quarter of 1997 declined to 4.81% from 6.48% for the second quarter of 1996. Net
interest income of $45.4 million for the first six months of 1997 increased $1.0
million or 2% over the comparable period of the prior year and the net interest
margin declined 161 basis points to 4.04%.
EQUITY IN EARNINGS OF INVESTMENT IN JOINT VENTURE
During the second quarter of 1997, the Company recorded $1.3 million of income
related to its 50% investment in the joint venture established in April 1996 as
compared to $1.1 million in the second quarter of 1996. The Company's pro rata
share of the income from the joint venture in the second quarter of 1997
consisted primarily of net interest income. Equity in earnings of investment in
joint venture amounted to $15.7 million for the first six months of 1997 and
includes $9.2 million of net gains related to the securitization of
single-family residential loans in the first quarter. The Company acts as the
servicer for the loans previously securitized as well as the remaining loans
held by the joint venture.
NON-INTEREST INCOME
Non-interest income of $33.3 million for the second quarter of 1997 increased by
$25.2 million from that of the second quarter of 1996 primarily due to an $18.8
million increase in gains on sales of interest earning assets and a $3.4 million
increase in servicing fees and other charges. Gains on sales of interest earning
assets for the second quarter of 1997 of $23.4 million is primarily comprised of
a $16.8 million net gain recognized in connection with the securitization of
1,783 single-family residential discount mortgage loans with an aggregate unpaid
balance of $170.6 million, a $4.5 million gain recognized in connection with the
securitization of 896 sub-prime single-family residential mortgage loans with an
aggregate unpaid principal balance of $104.8 million and a $2.6 million gain on
the sale of mortgage-related securities to Ocwen Asset Investment Corp. Gains on
sales of interest-earning assets for the first six months of 1997 increased by
$30.5 million from the same period in 1996 and includes a $9.5 million gain
earned during the first quarter in connection with the securitization of
discount mortgage loans. Servicing fees and other charges increased $9.3 million
during the first six months of 1997 as compared to 1996 and includes $1.1
million of fees earned during the first quarter in connection with the set up of
loans transferred to the Company for servicing. The increases in servicing fees
and other charges reflect an increase in loan servicing and related fees as a
result of an increase in loans serviced for others. The
8
average unpaid principal balance of loans serviced for others amounted to $2.50
billion and $561.8 million during the second quarter of 1997 and 1996,
respectively, and $2.27 billion and $450.3 million during the first six months
of 1997 and 1996, respectively.
PROVISION FOR LOAN LOSSES
The Company's provision for loan losses amounted to $7.9 million and $5.0
million for the second quarter of 1997 and 1996, respectively, and $17.7 million
and $14.4 million for the first six months of 1997 and 1996, respectively. At
June 30, 1997 Ocwen had allowances for losses of $19.9 million and $5.4 million
on its discount loan and loan portfolios, respectively, which amounted to 1.5%
and 1.2% of the respective balances. The Company maintained reserves of 1.1% and
0.9% on its discount loans and loan portfolios, respectively, at December 31,
1996.
OPERATING EXPENSES
Non-interest expense of $30.8 million for the second quarter of 1997 increased
by $17.0 million or 122% as compared to the same period for 1996. Compensation
and employee benefits accounted for $11.1 million of this increase, as the
average number of employees increased to 823 from 373 and the accrual for
employee profit sharing expense increased by $3.3 million over that of the
second quarter of 1996. Occupancy and equipment expense increased $1.8 primarily
due to an increase in data processing costs and general office equipment
expenses. Other operating expenses increased $3.6 primarily due to $2.5 million
of certain other one-time charges and a $766,000 increase in loan related
expenses. Non-interest expense of $53.5 million for the first six months of 1997
increased $28.0 million or 109% over the comparable period in the prior year,
with compensation and employee benefits accounting for $19.9 million of the
increase.
INCOME TAXES
Income tax expense amounted to $5.1 million and $2.9 million during the second
quarter of 1997 and 1996, respectively, and $8.7 million and $1.9 million for
the first six months of 1997 and 1996, respectively. The Company's income tax
expense is reported net of tax credits of $2.9 million and $2.5 million for the
second quarter of 1997 and 1996, respectively, and $6.5 million and $4.9 million
for the first six months of 1997 and 1996, respectively, resulting from
investments in low-income housing tax credit interests. Exclusive of such
amounts, the Company's effective tax rate amounted to 33.67% and 36.08% during
the second quarter of 1997 and 1996, respectively, and 34.17% and 40.30% for the
first six months of 1997 and 1996, respectively.
ASSETS
At June 30, 1997 the Company had $2.79 billion of total assets as compared to
$2.48 billion at December 31, 1996. Ocwen acquired discount loans with a
combined total unpaid principal balance of approximately $400.0 million and
$843.0 million during the three and six months ended June 30, 1997,
respectively.
The Bank had total assets of $2.61 billion at June 30, 1997 as compared to $2.40
billion at December 31, 1996.
9
CAPITAL
Stockholders' equity increased 20% during the first six months of 1997 from
$203.6 million at December 31, 1996 to $243.9 million at June 30, 1997. At June
30, 1997 stockholders' equity included $7.1 million of net unrealized gains on
securities available for sale, net of related deferred taxes of $4.1 million,
compared with $3.5 million of net unrealized gains at December 31, 1996, net of
related deferred taxes of $2.0 million.
The Bank had total stockholders' equity of $252.5 million and $228.2 million at
June 30, 1997 and December 31, 1996, respectively. The Bank's core and tangible
capital ratios were 9.40% and its total risk-based capital ratio was 13.81% at
June 30, 1997.
ATTACHED ARE THE FINANCIAL SUMMARY, THE AVERAGE BALANCE AND RATE ANALYSIS TABLE
AND THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS WHICH ARE UNAUDITED.
10
OCWEN FINANCIAL CORPORATION
FINANCIAL SUMMARY
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
At or for the Three At of for the Six
Months ended June 30, Months ended June 30,
-------------------------------------------------------------------------
% %
1997 1996 CHANGE 1997 1996 CHANGE
---- ---- ------ ---- ---- ------
OPERATIONS DATA:
Interest income $ 66,942 $ 51,502 30% $ 121,469 $ 99,457 22%
Interest expense 38,868 26,904 (44) 76,032 55,036 (38)
------ ---------- ---------- ----------
Net interest income 28,074 24,598 14 45,437 44,421 2
Provision for loan losses 7,909 4,964 (59) 17,651 14,370 (23)
------ ---------- ---------- ----------
Net interest income after provision for loan losses 20,165 19,634 3 27,786 30,051 (8)
------ ---------- ---------- ----------
Gain on sale of interest-earning assets, net 23,365 4,584 410 40,143 9,601 318
Other non-interest income 9,924 3,484 185 14,497 1,760 724
------ ---------- ---------- ----------
Total non-interest income 33,289 8,068 313 54,640 11,361 381
------ ---------- ---------- ----------
Non-interest expense 30,837 13,870 (122) 53,534 25,554 (109)
------ ---------- ---------- ----------
Equity in earnings of investment in joint venture 1,301 1,078 21 15,674 1,078 1,354
------ ---------- ---------- ----------
Income before income taxes 23,918 14,910 60 44,566 16,936 163
Income tax expense 5,126 2,911 (76) 8,733 1,910 (357)
------ ---------- ---------- ----------
Net income $ 18,792 $ 11,999 57 $ 35,833 $ 15,026 138
====== ========== ========== ==========
Earnings per share $ 0.69 $ 0.45 53 $ 1.32 $ 0.57 132
====== ========== == ========== ========== ===
KEY RATIOS:
Net interest spread 4.84% 7.05% (31)% 4.18% 6.13% (32)%
Net interest margin 4.81% 6.48% (26) 4.04% 5.65% (28)
Annualized Return on Average:
Assets (1) 2.75% 2.27% 21 2.68% 1.48% 81
Equity 32.29% 32.30% -- 32.23% 20.67% 56
Efficiency Ratio (2) 49.21% 42.46% 16 46.25% 45.81% 1
AVERAGE BALANCES:
Securities available for sale $ 308,267 $ 281,970 9% $ 323,640 $ 301,940 7%
Loan portfolio 447,591 296,106 51 435,642 299,243 46
Discount loan portfolio 1,350,151 587,159 130 1,234,186 616,350 100
Total interest-earning assets 2,334,115 1,517,572 54 2,251,951 1,572,250 43
Total assets 2,732,315 1,896,986 44 2,671,306 1,924,701 39
Deposits 2,075,371 1,460,725 (42) 2,032,980 1,477,638 (38)
Total interest-bearing liabilities 2,345,476 1,649,551 (42) 2,302,046 1,687,970 (36)
Total liabilities 2,499,557 1,748,387 (43) 2,448,920 1,779,302 (38)
Total stockholders' equity 232,758 148,599 57 222,386 145,399 53
- ----------------------
(1) Includes the Company's pro rata share of average assets held by the joint
venture
(2) Before provision for loan losses and including equity in earnings of
investment in joint venture
11
OCWEN FINANCIAL CORPORATION
AVERAGE BALANCE / RATE ANALYSIS
Three Months Ended June 30,
-------------------------------------------------------------------------------
1997 1996
-------------------------------------------------------------------------------
Average Annualized Average Annualized
Balance Interest Yield/Rate Balance Interest Yield/Rate
------- -------- ---------- ------- -------- ----------
(Dollars in thousands)
AVERAGE ASSETS:
Federal funds sold and
repurchase agreements $ 63,192 $ 795 5.03% $ 97,678 $ 1,329 5.44%
Securities available for sale 308,267 6,509 8.45 281,970 6,284 8.91
Securities held for trading -- -- -- -- -- --
Loans available for sale 135,801 3,973 11.70 218,719 4,887 8.94
Investment securities and other 29,113 745 10.24 35,940 1,335 14.86
Loan portfolio 447,591 10,674 9.54 296,106 7,764 10.49
Discount loan portfolio 1,350,151 44,246 13.11 587,159 29,903 20.37
----------- ------- ----------- ------
Total interest-earning
assets, interest income 2,334,115 66,942 11.47 1,517,572 51,502 13.57
------- ------
Non-interest earning cash 12,204 6,639
Allowance for loan losses (21,441) (11,771)
Investments in low-income-housing
tax credit interests 100,779 99,900
Investment in joint ventures 30,128 55,440
Real estate owned, net 102,527 142,010
Other assets 174,002 87,196
----------- -----------
Total assets $ 2,732,315 $ 1,896,986
=========== ===========
AVERAGE LIABILITIES AND
STOCKHOLDERS' EQUITY:
Interest-bearing demand deposits $ 42,600 $ 496 4.66 $ 21,753 $ 176 3.24
Savings deposits 2,037 12 2.36 3,423 19 2.22
Certificates of deposit 2,030,734 30,863 6.08 1,435,549 22,250 6.20
--------- ------ --------- ------
Total interest-bearing deposits 2,075,371 31,371 6.05 1,460,725 22,445 6.15
Notes, debentures and other 245,523 7,148 11.65 115,946 3,434 11.85
Securities sold under agreements
to repurchase 14,272 204 5.72 2,481 32 5.16
Federal Home Loan Bank advances 10,310 145 5.63 70,399 993 5.64
--------- ------ --------- ------
Total interest-bearing
liabilities, interest expense 2,345,476 38,868 6.63 1,649,551 26,904 6.52
------ ------
Non-interest bearing deposits 28,147 4,284
Escrow deposits 72,006 40,437
Other liabilities 53,928 54,115
---------- ---------
Total liabilities 2,499,557 1,748,387
Stockholders' equity 232,758 148,599
---------- ---------
Total liabilities and
stockholders' equity $2,732,315 $1,896,986
========== ==========
Net interest income before
provision for loan losses $28,074 $24,598
======= =======
12
OCWEN FINANCIAL CORPORATION
AVERAGE BALANCE / RATE ANALYSIS
Six Months Ended June 30,
----------------------------------------------------------------------------------
1997 1996
----------------------------------------------------------------------------------
Average Annualized Average Annualized
Balance Interest Yield/Rate Balance Interest Yield/Rate
------- -------- ---------- ------- -------- ----------
(Dollars in thousands)
AVERAGE ASSETS:
Federal funds sold and repurchase
agreements $ 97,765 $ 2,453 5.02% $ 77,435 $ 2,098 5.42%
Securities available for sale 323,640 14,682 9.07 301,940 14,064 9.32
Securities held for trading 6,589 248 7.53 -- -- --
Loans available for sale 127,823 6,824 10.68 240,009 11,484 9.57
Investment securities and other 26,306 1,426 10.84 37,273 1,980 10.62
Loan portfolio 435,642 21,366 9.81 299,243 17,773 11.88
Discount loan portfolio 1,234,186 74,470 12.07 616,350 52,058 16.89
--------- ------ ------- -------
Total interest-earning assets,
interest income 2,251,951 121,469 10.79 1,572,250 99,457 12.65
------- -------
Non-interest earning cash 11,781 6,549
Allowance for loan losses (18,897) (7,307)
Investments in low-income housing
tax credit interests 95,588 94,825
Investment in joint ventures 46,882 27,720
Real estate owned, net 107,377 152,499
Other assets 176,625 78,165
---------- ---------
Total assets $ 2,671,306 $1,924,701
========== =========
AVERAGE LIABILITIES AND
STOCKHOLDERS' EQUITY:
Interest-bearing demand deposits $ 33,275 $ 723 4.35 $ 23,668 $ 405 3.42
Savings deposits 2,328 27 2.32 3,434 40 2.33
Certificates of deposit 1,997,377 60,514 6.06 1,450,536 45,001 6.20
--------- --------- --------- ---------
Total interest-bearing deposits 2,032,980 61,264 6.03 1,477,630 45,446 6.15
Notes, debentures and other 235,547 13,863 11.77 116,140 6,873 11.84
Securities sold under agreements
to repurchase 17,603 477 5.42 23,793 685 5.76
Federal Home Loan Bank advances 15,916 428 5.38 70,399 2,032 5.77
--------- --------- --------- ---------
Total interest-bearing liabilities,
interest expense 2,302,046 76,032 6.61 1,687,970 55,036 6.52
--------- ---------
Non-interest bearing deposits 20,765 4,039
Escrow deposits 71,860 38,773
Other liabilities 54,249 48,520
---------- ---------
Total liabilities 2,448,920 1,779,302
Stockholders' equity 222,386 145,399
---------- ----------
Total liabilities and
stockholder's equity $ 2,671,306 $1,924,701
========== =========
Net interest income before
provision for loan losses $ 45,437 $ 44,421
========= =========
13
OCWEN FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except share data)
JUNE 30, DECEMBER 31,
1997 1996
(UNAUDITED) (AUDITED)
-------------- -------------
ASSETS
Cash and amounts due from depository institutions $ 6,911 $ 6,878
Interest bearing deposits 29,992 13,341
Federal funds sold and repurchase agreements 189,844 32,000
Securities held for trading -- 75,606
Securities available for sale, at market value 263,412 354,005
Loans available for sale, at lower of cost or market 103,627 126,366
Investment securities, net 38,821 8,901
Loan portfolio, net 433,663 402,582
Discount loan portfolio, net 1,295,120 1,060,953
Principal, interest and dividends receivable 13,311 16,821
Investments in low-income housing tax credit interests 101,204 93,309
Investment in joint ventures 27,588 67,909
Real estate owned, net 117,703 103,704
Investment in real estate 48,105 41,033
Premises and equipment, net 33,105 14,619
Income taxes receivable 8,879 15,115
Deferred tax asset 10,718 5,860
Goodwill 11,040 --
Other assets 53,836 44,683
---------- ----------
$2,786,879 $2,483,685
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits $2,198,603 $1,919,742
Advances from the Federal Home Loan Bank -- 399
Securities sold under agreements to repurchase -- 74,546
Notes, debentures and other interest bearing obligations 286,972 225,573
Accrued expenses, payables and other liabilities 57,440 59,829
---------- ----------
Total liabilities 2,543,015 2,280,089
---------- ----------
STOCKHOLDER'S EQUITY:
Preferred stock, $.01 par value; 20,000,000 shares
authorized; 0 shares issued and outstanding -- --
Common stock, $.01 par value; 200,000,000 shares
authorized; 26,799,511 and 26,744,170 shares issued
and outstanding at June 30, 1997 and December 31
1996, respectively. 268 267
Additional paid-in capital 23,124 23,258
Retained earnings 216,250 180,417
Unrealized gain on securities available for sale, net of taxes 7,060 3,486
Notes receivable on exercise of common stock options (2,838) (3,832)
---------- ----------
Total stockholders' equity 243,864 203,596
---------- ----------
$2,786,879 $2,483,685
========== ==========
14
OCWEN FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except share data)
FOR THE PERIODS ENDED JUNE 30, Three months Six months
- ----------------------------- ------------------------ -------------------------
1997 1996 1997 1996
----------- ----------- ---------- -----------
INTEREST INCOME:
Federal funds sold and repurchase agreements $ 795 $ 1,329 $ 2,453 $ 2,098
Securities available for sale 6,509 6,284 14,682 14,064
Securities held for trading -- -- 248 --
Loans available for sale 3,973 4,887 6,824 11,484
Loans 10,674 7,764 21,366 17,773
Discount loans 44,246 29,903 74,470 52,058
Investment securities and other 745 1,335 1,426 1,980
----------- ----------- ----------- -----------
66,942 51,502 121,469 99,457
----------- ----------- ----------- -----------
INTEREST EXPENSE:
Deposits 31,371 22,445 61,264 45,446
Securities sold under agreements to repurchase 204 32 477 685
Advances from the Federal Home Loan Bank 145 993 428 2,032
Notes, debentures and other interest bearing obligations 7,148 3,434 13,863 6,873
----------- ----------- ----------- -----------
38,868 26,904 76,032 55,036
----------- ----------- ----------- -----------
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES 28,074 24,598 45,437 44,421
PROVISION FOR LOAN LOSSES 7,909 4,964 17,651 14,370
----------- ----------- ----------- -----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 20,165 19,634 27,786 30,051
----------- ----------- ----------- -----------
NON-INTEREST INCOME:
Servicing fees and other charges 4,845 1,468 10,081 787
Gains on sales of interest earning assets, net 23,365 4,584 40,143 9,601
Income (loss) on real estate owned, net 4,629 887 3,835 (1,028)
Other income 450 1,129 581 2,001
----------- ----------- ----------- -----------
33,289 8,068 54,640 11,361
----------- ----------- ----------- -----------
NON-INTEREST EXPENSE:
Compensation and employee benefits 19,676 8,570 34,599 14,739
Occupancy and equipment 3,960 2,181 6,789 4,227
Net operating loss (income) on investments in real
estate and certain low-income housing tax credit
interests 104 (399) 1,197 62
Other operating expenses 7,097 3,518 10,949 6,526
----------- ----------- ----------- -----------
30,837 13,870 53,534 25,554
----------- ----------- ----------- -----------
EQUITY IN EARNINGS OF INVESTMENT IN JOINT VENTURE 1,301 1,078 15,674 1,078
INCOME BEFORE INCOME TAXES 23,918 14,910 44,566 16,936
INCOME TAX EXPENSE 5,126 2,911 8,733 1,910
----------- ----------- ----------- -----------
NET INCOME $ 18,792 $ 11,999 $ 35,833 $ 15,026
=========== =========== =========== ===========
EARNINGS PER SHARE:
NET INCOME $ 0.69 $ 0.45 $ 1.32 $ 0.57
=========== =========== =========== ===========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 27,063,761 26,398,127 27,068,563 26,397,920
=========== =========== =========== ===========
15
