Origen Financial Announces Fourth Quarter and Full Year 2010 Results

Mar 31, 2011, 15:52 ET from Origen Financial, Inc.

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.  

Forward-Looking Statements

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.

Financial Tables Follow...

ORIGEN FINANCIAL, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

ASSETS

December 31,

December 31,

2010

2009 (as restated)

Assets

    Cash and Equivalents

$            2,595

$                    3,827

    Restricted Cash

9,981

10,419

    Investment Securities

1,996

8,727

    Loans Receivable

716,900

808,360

    Furniture, Fixtures and Equipment, Net

106

197

    Repossessed Houses

6,705

7,918

    Other Assets

5,818

6,905

Total Assets

$        744,101

$                846,353

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities

    Securitization Financing

627,334

693,697

    Note Payable-Related Party

-

15,638

    Derivative Liabilities

37,090

33,065

    Other Liabilities

12,702

13,711

Total Liabilities

677,126

756,111

Equity

66,975

90,242

Total Liabilities and Equity

$        744,101

$                846,353

ORIGEN FINANCIAL, INC.

CONSOLIDATED STATEMENT OF EARNINGS

(Dollars in thousands, except for share data)

(Unaudited)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2010

2009 (as restated)

2010

2009 (as restated)

Interest Income

  Total Interest Income

$      17,071

$                  20,138

$      71,641

$                  82,159

  Total Interest Expense

13,016

13,112

48,029

54,641

Net Interest Income Before Loan Losses and Impairment

4,055

7,026

23,612

27,518

  Provision for Loan Losses

6,941

5,373

26,606

21,112

  Impairment of Purchased Loan Pool

-

275

382

644

Net Interest Income After Loan Losses and Impairment

(2,886)

1,378

(3,376)

5,762

Non-interest Income (Loss)

  Losses on Loans Held for Sale

-

-

(242)

-

  Other

871

608

3,002

2,536

Total Non-interest Income (Loss)

871

608

2,760

2,536

Non-interest Expenses

  Total Personnel

615

753

2,494

4,319

  Total Loan Origination & Servicing

2,472

2,751

10,312

11,537

  Investment Impairment

26

913

26

1,002

  State Taxes

(74)

(143)

167

34

  Other Operating

698

872

2,971

3,860

Total Non-interest Expenses

3,737

5,146

15,970

20,752

Loss From Continuing Operations Before Income Taxes

(5,752)

(3,160)

(16,586)

(12,454)

  Income Tax Expense (Benefit)

(40)

95

8

152

Loss From Continuing Operations

(5,712)

(3,255)

(16,594)

(12,606)

Income (Loss) From Discontinued Operations, Net of Tax

-

-

-

175

  Net Loss

$      (5,712)

$                  (3,255)

$    (16,594)

$                (12,431)

Weighted Average Common Shares Outstanding, Basic

25,926,149

25,926,149

25,926,149

25,926,149

Weighted Average Common Shares Outstanding, Diluted

25,926,149

25,926,149

25,926,149

25,926,149

Basic and Fully Diluted Earnings (Loss) Per Common Share:

  Loss From Continuing Operations

$        (0.22)

$                    (0.13)

$        (0.64)

$                    (0.48)

  Income From Discontinued Operations

-

-

-

-

  Net Loss Per common Share

$        (0.22)

$                    (0.13)

$        (0.64)

$                    (0.48)

SOURCE Origen Financial, Inc.



RELATED LINKS

http://www.origenfinancial.com