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Ocwen Financial rebounded from a tumultuous 2014 that included legal troubles, multi-million dollar settlements, ratings downgrades, and several multi-billion sales of MSR portfolios with a preliminary Q1 2015 net income of $34 million, or $0.27 per share, according to an announcement from the company on Thursday afternoon.
Atlanta-based Ocwen, one of the largest non-bank mortgage servicers in the nation, posted a total write-down of $546 million for the full year of 2014. In Q1 2014, the company reported a total net income of $60.5 million, or $0.43 per share. The company's Q1 2015 preliminary revenue of $510.4 million represents a 7 percent year-over-year decline, and preliminary income from operations dropped from $202.1 million in Q1 2014 down to $132.1 million in Q1 2015. Meanwhile, preliminary cash flow from operating activities for Q1 totaled $323 million, a year-over-year increase of 65 percent.
"I am proud of what we have accomplished as far as managing the business through this difficult transition period. We made great progress on our asset sale strategy, have returned to profitability and continue to generate substantial operating cash flow," said Ron Faris, President and CEO of Ocwen. "However, I am not satisfied with only making $34 million in the quarter. We intend to do better."
Factors that influenced Ocwen's pre-tax income during Q1 were as follows: A gain of $26.9 million from an MSR sale of Freddie Mac performing loans with an unpaid principal balance of $9.1 billion, a gain of $12.9 million on a sale of legacy performing and non-performing whole loans; an impairment charge of $17.8 million due to the fair market value decline of government-insured MSRs (which was primarily the result of the FHA lowering the mortgage insurance premiums by 50 basis points early in the year; monitor costs of $9.0 million; strategic advisor expenses and fair value-related charges of $8.4 million and $8.3 million, respectively. Also during Q1, Ocwen's lending segment was responsible for generating $16.0 million of pre-tax income.
The results Ocwen announced Thursday were preliminary; the company announced that it plans to file its 2014 Form 10-K and Q1 2015 Form 10-Q on or before May 29.
