Origen Financial Announces Third Quarter 2012 Results

SOUTHFIELD, Mich., Dec. 13, 2012 /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 $1.9 million, or $0.07 per share, for the quarter ended September 30, 2012, as compared to a net loss of $1.8 million, or $0.07 per share, for the third quarter of 2011, as restated. Net loss for the nine months ended September 30, 2012 was $1.3 million, or $0.05 per share, as compared to a net loss of $7.4 million, or $0.28 per share for the nine months ended September 30, 2011, as restated. The 2012 year to date results include a first quarter gain of approximately $6.2 million relating to the termination of certain of Origen's interest rate swap transactions with Citibank, N.A.

During the month of October 2012, the Company received notice from the Bank of New York Mellon, in its capacity as indenture trustee (the "Trustee") for Origen Manufactured Housing Contract Trust 2006-a and Origen Manufactured Housing Contract Trust 2007-a (the "Issuers"), disclosing that the Trustee had, beginning July 31, 2009 and ending August 31, 2012, calculated the interest rate on the Issuers' Class A-2 notes at a rate higher than that prescribed by the related indentures.  The indentures specify that the Note Rate for the Class A-2 notes will be the least of the applicable Auction Rate, Net Contract Rate and the maximum cap rate of 18.00 percent per annum.  During the indicated periods the Trustee had applied the higher applicable Auction Rate.  The over-calculation of interest resulted in underpayment of principal to the Class A-1 Notes.  The Trustee initiated a reclaim process with the Depository Trust Company ("DTC"), through which DTC is seeking the return of the interest overpayments.  Since the Company structured the subject transactions as financings, any restatement of amounts previously disbursed, between principal payments and interest payments, are required to be reflected in the financial statements of the Company.  Accordingly, the Company has restated its Consolidated Financial Statements for the three and nine months ended September 30, 2011 to reflect the reduced interest expense on the Notes.  The reduction in interest expense for the three months ended September 30, 2011, was approximately $0.3 million and the reduction in interest expense for the nine months ended September 30, 2012 was approximately $1.0 million.  Such restatements had no impact on cash payments to the Company relating to its residual interests in the affected securities.

On December 13, 2012, Origen's Board of Directors declared a dividend on common stock of $0.13 per share to be paid to holders of Origen's common stock of record on December 24, 2012.  The dividend will be paid on December 28, 2012 and will approximate $3.4 million.  The cash dividend will represent a return of capital for tax purposes.

Net interest income, before loan losses and impairment, decreased by approximately 9 percent for the third quarter 2012 to $4.8 million from $5.3 million the third quarter 2011 and decreased approximately 24 percent to $13.7 million for 2012 year to date versus $18.0 million for 2011.  Such decrease is the result of the continued runoff of the Company's static loan portfolio. The third quarter 2012 provision for loan losses was $4.1 million versus $4.9 million for the prior year quarter, a decrease of approximately 16 percent. The provision for loan losses for 2012 year to date was $14.1 million as compared to $18.1 million for the prior year to date, a decrease of approximately 22 percent.

Non-interest expenses, including $1.9 million of loan servicing expense, were $2.7 million for the third quarter 2012, as compared to $3.1 million, including $2.2 million of loan servicing expense, for the year ago quarter, a decrease of approximately 13 percent.  Year to date 2012 non-interest expenses, including $6.0 million of loan servicing expense, were $8.6 million as compared to $9.9 million, including $6.9 million of loan servicing expense, for the prior year to date, a decrease of approximately 13 percent.

Earnings Call and Webcast

A conference call has been scheduled for Tuesday, December 18, 2012, at 2:00 p.m. Eastern Time to discuss third quarter results and current operations.  The call may be accessed by dialing 888-395-3227 or 719-457-2645.  A replay will be available through December 26, 2012 by dialing 877-870-5176 or 858-384-5517 pass code 3492552.

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.

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SOURCE Origen Financial, Inc.