Origen Financial Announces Fourth Quarter and Full Year 2010 Results
Posted on March 31, 2011 at 15:52 PM EDT
SOUTHFIELD, Mich., March 31, 2011 /PRNewswire/ -- Origen Financial, Inc. (Pink Sheets: ORGN) ("Origen" or the "Company"), a real estate investment trust that manages residual interests in securitized manufactured housing loan portfolios, today announced a net loss of $5.7 million, or $0.22 per share, for the quarter ended December 31, 2010, as compared to a net loss of $3.3 million, or $0.13 cents per share, for the fourth quarter of 2009, as restated. A net loss of $16.6 million, or $0.64 per share was realized for the full year 2010 versus a restated net loss of $12.4 million or $0.48 per share for the full year of 2009.
Origen's Board of Directors declared a common stock dividend payment of $0.07 per share to be paid to holders of Origen's common stock of record on April 11, 2011. The dividend will be paid on April 21, 2011 and will approximate $1.8 million. The cash dividend will represent a return of capital.
For the fourth quarter 2010, net interest income before loan losses and impairment decreased by approximately 42 percent to $4.1 million from $7.0 million, as restated for the fourth quarter 2009 and decreased for the full year 2010 by approximately 14 percent to $23.6 million from $27.5 million in 2009, as restated. As a result of ratings downgrades of the financial guarantor that provides credit enhancement for several of the Company's securitized loan transactions, the bonds associated with two such transactions were downgraded during year 2009 by the rating agencies. The downgrade of these bonds triggered an increase in interest rates and such increases were the primary cause for the reduction in net interest income. The bond paying agent did not implement the rate increases in a timely manner and this necessitated a restatement of Origen's 2009 earnings to reflect the rate increases from the point of the bond downgrades.
The fourth quarter 2010 provision for loan losses was $6.9 million versus $5.4 million for the prior year quarter, an increase of approximately 28 percent. The loan loss provision for the full year of 2010 was $26.6 million, as compared to $21.1 million for 2009, an increase of approximately 26 percent. These increases reflect the continuing problems in the overall housing market.
Non-interest expenses, including expenses from discontinued operations and $2.5 million of loan servicing expense, were $3.7 million for the fourth quarter 2010, as compared to $5.1 million, including $2.8 million of loan servicing expense, for the year ago quarter, a decrease of approximately 27 percent. Full year non-interest expenses, including expenses from discontinued operations and including $10.3 million of loan servicing fees expense, for 2010 were $16.0 million versus $20.8 million, including $11.5 million of loan servicing fees expense, for 2009, a reduction of approximately 23 percent.
Ronald A. Klein, chief executive officer, stated, "While our cash flowing deals continued to perform well, results in the second half of 2010 were impacted by the issues that continue to plague the housing market. High unemployment, lack of financing, strategic defaults, rent increases and a continued lack of demand for manufactured housing all contributed to higher defaults and lower recovery rates, which in turn impacted our loan loss provision. We did see an improvement in loan performance in February 2011 and are hopeful that this will continue."
Earnings Call and Webcast
A conference call and webcast have been scheduled for Tuesday, April 5, 2011, at 11:00 a.m. Eastern Time to discuss fourth quarter and year-end results and current operations. The call may be accessed by dialing 888-564-7442 or 719-325-2277. A replay will be available through April 12, 2011 by dialing 877-870-5176 or 858-384-5517 pass code 5725000.
This press release contains various "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, and Origen intends that such forward-looking statements will be subject to the safe harbors created thereby. The words "will," "may," "could," "expect," "anticipate," "believes," "intends," "should," "plans," "estimates," "approximate" and similar expressions identify these forward-looking statements. These forward-looking statements reflect Origen's current views with respect to future events and financial performance, but involve known and unknown risks and uncertainties, both general and specific to the matters discussed in this press release. These risks and uncertainties may cause Origen's actual results to be materially different from any future results expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others, the foregoing assumptions and those risks referenced under the headings entitled "Factors That May Affect Future Results" or "Risk Factors" contained in Origen's filings. The forward-looking statements contained in this press release speak only as of the date hereof and Origen expressly disclaims any obligation to provide public updates, revisions or amendments to any forward- looking statements made herein to reflect changes in Origen's expectations or future events.
About Origen Financial, Inc.
Origen is an internally managed and internally advised company that has elected to be taxed as a real estate investment trust. Origen is based in Southfield, Michigan.
For more information about Origen, please visit http://www.origenfinancial.com.
SOURCE Origen Financial, Inc.
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