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Home Loan Servicing Solutions, Ltd. Reports EPS Of $0.37 And Net Income Of $6.6 Million In The Third Quarter Of 2012

GEORGETOWN, Grand Cayman, Oct. 18, 2012 (GLOBE NEWSWIRE) -- Home Loan Servicing Solutions, Ltd. ("HLSS" or the "Company") (Nasdaq:HLSS) today reported net income of $6.6 million, or $0.37 per ordinary share, for the third quarter of 2012.

Third quarter business performance highlights:

  • Earned $6.6 million, or $0.37 per ordinary share.
  • Declared dividends of $0.10 per share per month totaling $5.9 million for the quarter.
  • Received gross proceeds of $249.9 million in connection with the follow-on offering of 16,387,500 shares at $15.25 per ordinary share on September 12, 2012. Proceeds from the offering were used to acquire mortgage servicing assets related to non-agency mortgage loans from Ocwen with an unpaid principle balance ("UPB") of $27.8 billion in September.
  • In addition, completed the flow acquisition of mortgage servicing assets related to non-agency mortgage loans with UPB of $2.1 billion from Ocwen on August 1, 2012 resulting in ending UPB of $46.5 billion.
  • In connection with the acquisition of mortgage servicing assets in September, executed swap of variable rate LIBOR for a fixed rate of 52 basis points covering the projected interest exposure for existing and newly acquired assets for a term of 60 months.
  • Earnings include a $0.03 per share benefit from reduced amortization due to the deferral of certain modifications as Ocwen tested delinquent loans for HAMP 2 eligibility, and ending the quarter on a Sunday delayed the receipt of certain loan payoffs. These factors combined to reduce the annualized prepayment rate to 12.6% from 15.2% in the second quarter.  There was no change in servicing asset valuations.

Subsequent to the end of the third quarter of 2012:

  • On October 1, 2012, the Company's Board of Directors declared a monthly dividend of $0.11 per ordinary share with respect to each of October, November and December 2012.
  • On October 17, 2012, completed the issuance of $250 million of one-year and $450 million of three-year term notes secured by servicing advance receivables at a weighted average interest spread over LIBOR of 1.55%. The proceeds were used to repay $600 million in term notes and to reduce borrowing on variable funding notes with a weighted average interest spread of 2.93%.

"I am pleased with the execution of our first follow-on equity offering and our recently completed term note issuance which confirm our belief that both debt and equity investors appreciate the quality of our assets and the exceptional value that HLSS represents" said Chairman William Erbey.

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