Ocwen Financial Corporation Announces Third Quarter 2010 Financial Results
WEST PALM BEACH, Fla., Nov. 4, 2010 (GLOBE NEWSWIRE) -- Ocwen Financial Corporation ("Ocwen" or the "Company") (NYSE:OCN) today reported a net loss of $8.8 million for the third quarter of 2010 compared to a net loss of $42.0 million for the third quarter of 2009. The loss in the third quarter of 2010 is attributable to one-time expenses including $33.9 million in transaction related charges for the HomEq acquisition and $20.1 million in charges for litigation primarily related to the Cartel judgment. The most significant item contributing to the reduction in the net loss between the third quarter of 2009 and the third quarter of 2010 is the absence of $56.5 million in one-time income tax expense recognized in the third quarter of 2009, most in connection with the separation of Altisource (f/k/a Ocwen Solutions). The majority of the remaining favorable variance is attributable to an increase in the size of Ocwen's Servicing segment where the total unpaid principal balance increased from $40.3 billion in the third quarter of 2009 to $76.1 billion in the third quarter of 2010, or 89%, and to lower servicing cost per loan. Net loss per diluted share was $.09 for the third quarter of 2010 compared to a loss of $0.51 for the third quarter of 2009.
Third quarter 2010 pre-tax income from continuing operations was affected by:
- One-time transaction related expenses associated with the HomEq servicing acquisition of $33.9 million including severance and WARN Act compensation of $30.3 million, technology contract exit costs of $2.3 million and other expenses of $1.3 million.
- $20.1 million in litigation related charges, primarily related to a judgment against Ocwen in the Cartel case of $12.7 million including punitive damages.
- A non-cash reduction in the fair market value of Auction Rate Securities of $3.0 million.
- Interest and amortization of loan expense for the $350 million term loan which closed in the second quarter of 2010 of $6.3 million.
Net income for the nine months ended September 30, 2010 was $28.1 million or $0.27 per share, compared to a net loss of $9.1 million or $0.13 per share for the same period in 2009.
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