Ocwen Financial Corp. (OCN, Financial) filed Quarterly Report for the period ended 2009-06-30.
Ocwen Financial Corporation is a financial services holding company engaged in asset acquisition and resolution residential finance commercial finance investment management and hotel operations. The Company primarily specializes in the aquisition and resolution of non-performing or underperforming loans. Ocwen Financial Corp. has a market cap of $954.2 million; its shares were traded at around $14.15 with a P/E ratio of 19.4 and P/S ratio of 1.9. Ocwen Financial Corp. had an annual average earning growth of 58.8% over the past 5 years.
We recorded unrealized fair value gains of $5,435 on trading securities in the second quarter of 2009. In comparison, the net loss in the second quarter of 2008 included approximately $22,795 of unrealized losses comprised of $8,140 of mark-to-market losses on trading securities and $14,655 in unrealized losses primarily related to derivative mark-to-market losses at an unconsolidated subsidiary.
Six Months Ended June 2009 versus June 2008. We generated net income of $32,939 or $0.49 per share in the six months ended June 2009 compared to $2,555 or $0.04 per share for the six months ended June 2008. Income from continuing operations before income taxes was $49,609 as compared to $11,529 for the six months ended June 2009 and 2008, respectively.
We recorded unrealized fair value gains of $5,055 on trading securities in the six months ended June 2009. In comparison, the net loss in the six months ended June 2008 included approximately $27,749 of unrealized losses comprised of $20,049 of mark-to-market losses on trading securities and $7,700 in unrealized losses primarily related to losses at an unconsolidated subsidiary.
Our borrowings as of June 30, 2009 include $176,668 borrowed under the Investment Line term note that is used to finance the auction rate securities which we are carrying at a fair value of $243,285. In the first six months of 2009, we repaid $24,051 of the Investment Line term note principal. This amount includes proceeds of $2,000 from the redemption of certain securities. On April 30, 2009, we renewed this term note through June 2010. We renewed this agreement early under terms substantially similar to the previous agreement, except that amortization payments are now $3,000 per month in place of the previous quarterly reductions in the advance rate.
Excluding the Investment Line, our total maximum borrowing capacity was $1,536,810 as of June 30, 2009, an increase of $196,063 as compared to December 31, 2008. This increase is primarily due to an increase in borrowing capacity of the Servicing segment offset by a decline in borrowing capacity of the Loans and Residuals and Financial Services segments. The increase in Servicing borrowing capacity is principally the result of entering into two new facilities in March 2009 and expanding an existing facility in May 2009. One of the new facilities represented a $60,000 advance in the form of zero-coupon bonds that we initially recorded at $45,373, net of a discount of $14,627. The other new facility is a $7,000 term note. Both of these new facilities are secured by the pledge of advances. We secured an increase in the maximum borrowing under the existing facility from $300,000 to $500,000 and extended the amortization date by one year to May 4, 2010.
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Ocwen Financial Corporation is a financial services holding company engaged in asset acquisition and resolution residential finance commercial finance investment management and hotel operations. The Company primarily specializes in the aquisition and resolution of non-performing or underperforming loans. Ocwen Financial Corp. has a market cap of $954.2 million; its shares were traded at around $14.15 with a P/E ratio of 19.4 and P/S ratio of 1.9. Ocwen Financial Corp. had an annual average earning growth of 58.8% over the past 5 years.
Highlight of Business Operations:
Three Months Ended June 2009 versus June 2008. We generated net income of $17,830 or $0.26 per share in the second quarter of 2009 compared to a net loss of $2,717 or $0.04 per share for the second quarter of 2008. Income from continuing operations before income taxes was $26,345 for the second quarter of 2009 as compared to $3,112 for the second quarter of 2008.We recorded unrealized fair value gains of $5,435 on trading securities in the second quarter of 2009. In comparison, the net loss in the second quarter of 2008 included approximately $22,795 of unrealized losses comprised of $8,140 of mark-to-market losses on trading securities and $14,655 in unrealized losses primarily related to derivative mark-to-market losses at an unconsolidated subsidiary.
Six Months Ended June 2009 versus June 2008. We generated net income of $32,939 or $0.49 per share in the six months ended June 2009 compared to $2,555 or $0.04 per share for the six months ended June 2008. Income from continuing operations before income taxes was $49,609 as compared to $11,529 for the six months ended June 2009 and 2008, respectively.
We recorded unrealized fair value gains of $5,055 on trading securities in the six months ended June 2009. In comparison, the net loss in the six months ended June 2008 included approximately $27,749 of unrealized losses comprised of $20,049 of mark-to-market losses on trading securities and $7,700 in unrealized losses primarily related to losses at an unconsolidated subsidiary.
Our borrowings as of June 30, 2009 include $176,668 borrowed under the Investment Line term note that is used to finance the auction rate securities which we are carrying at a fair value of $243,285. In the first six months of 2009, we repaid $24,051 of the Investment Line term note principal. This amount includes proceeds of $2,000 from the redemption of certain securities. On April 30, 2009, we renewed this term note through June 2010. We renewed this agreement early under terms substantially similar to the previous agreement, except that amortization payments are now $3,000 per month in place of the previous quarterly reductions in the advance rate.
Excluding the Investment Line, our total maximum borrowing capacity was $1,536,810 as of June 30, 2009, an increase of $196,063 as compared to December 31, 2008. This increase is primarily due to an increase in borrowing capacity of the Servicing segment offset by a decline in borrowing capacity of the Loans and Residuals and Financial Services segments. The increase in Servicing borrowing capacity is principally the result of entering into two new facilities in March 2009 and expanding an existing facility in May 2009. One of the new facilities represented a $60,000 advance in the form of zero-coupon bonds that we initially recorded at $45,373, net of a discount of $14,627. The other new facility is a $7,000 term note. Both of these new facilities are secured by the pledge of advances. We secured an increase in the maximum borrowing under the existing facility from $300,000 to $500,000 and extended the amortization date by one year to May 4, 2010.
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