Ocwen produced record revenue of $406.7 million, up 147% from the first quarter of 2012.
Income from operations grew by 108% to $163.1 million for the first quarter of 2013 as compared to $78.4 million for the first quarter of 2012.
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Ocwen’s normalized pre-tax earnings were $101.4 million, a 90% increase over normalized pre-tax earnings in the first quarter of 2012 and a 22% increase over the fourth quarter of 2012. The adjustments in the first quarter of 2013 included: $38.2 million of transition expenses; the write-off of $17.0 million of unamortized deferred costs and discount associated with the early termination and replacement of a senior secured term loan facility; and $5.1 million of contribution from sold operations. Ocwen generated Cash flow from operations of $401.9 million. After reducing this amount for the repayment of related match funded debt, the Company generated adjusted cash flow from operations of $265.8 million.
"The Company’s string of record quarterly revenues will continue into the second quarter as we benefit from a full quarter of ResCap revenue and our recent acquisition of Ally Bank’s mortgage servicing rights," commented Bill Erbey, Ocwen’s Chairman. "Ocwen’s core earnings and cash-flow were strong in the first quarter, and we should see these trend higher as a percentage of revenue as we drive down costs and delinquencies on newly acquired business. Ocwen’s lower funding costs and improving pre-pay speeds on non-prime loans should also support better performance versus our original expectations."
Mr. Erbey continued, "As a leader in the industry, Ocwen has a long and successful history of adding business in an accretive and disciplined manner. Ocwen remains very well-positioned with the lowest cost to service for non-performing loans in our industry and superior ability to bring down delinquencies. The Company has a substantial pipeline, which has grown to $375 billion. With one of the strongest balance sheets in the industry, Ocwen is well positioned to produce strong earnings, expand margins and increase cash-flow."
First Quarter 2013 Business Highlights
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By GlobalData- Completed the acquisition on February 15, 2013 of servicing and other assets from Residential Capital, LLC ("ResCap"), adding $269 billion of UPB to the Company’s servicing portfolio and $1.5 billion of related servicing advance receivables as of March 31, 2013. To finance the ResCap acquisition, Ocwen deployed approximately $840 million of net additional capital from the proceeds of a new $1.3 billion senior secured term loan facility and $1.25 billion from three servicing advance facilities.
- Completed 24,184 loan modifications. HAMP modifications accounted for 34% of completed modifications.
- Sold to Home Loan Servicing Solutions (HLSS) in March 2013 $703 million of servicing advances and the rights to receive the servicing fees on approximately $15.9 billion of UPB.
- Deferred servicing fees ("DSF") related to delinquent borrower payments amounted to $503.8 million at the end of the quarter. Ocwen does not treat DSF as revenue until collected, and it is not accrued on the Company’s balance sheet.
- Ocwen’s Homeward lending operation originated approximately $2.4 billion of fundings with another $0.4 billion originated via partnerships. Total HARP volume was $415 million. HARP is a program sponsored by Fannie Mae and Freddie Mac to help "underwater" borrowers refinance their mortgages.
- Total effective tax rate of 12.1%.
