SOUTHFIELD, Mich., March 25 /PRNewswire-FirstCall/ -- Origen Financial, Inc. (Pink Sheets: ORGN), a real estate investment trust that manages residual interests in securitized manufactured housing loan portfolios, today announced a net loss of $4.4 million, or $0.17 per share, for the quarter ended December 31, 2008, as compared to a net loss of $39.1 million, or $1.54 cents per share, for the fourth quarter of 2007. A net loss of $35.4 million, or $1.38 per share was realized for the full year 2008 versus a net loss of $31.8 million or $1.26 per share for the full year of 2007. The fourth quarter and full year net loss for 2007 included a non-cash goodwill write-off of $32.3 million. Origen's Board of Directors did not declare a common stock dividend payment for the fourth quarter of 2008.
The fourth quarter 2008 provision for loan losses was $6.7 million versus $3.0 million for the prior year quarter, an increase of 123 percent. This increase reflects the impact of overall economic conditions, including the rising unemployment rate and the deterioration of the housing market, which has negatively impacted recovery rates on the disposition of repossessed and foreclosed properties. Also, the aging of our loan portfolio as loans begin to enter the peak years for delinquencies and defaults has increased the level of loan loss reserves needed, and has resulted in increased loan loss provisions. The loan loss provision for the full year of 2008 was $17.7 million, as compared to $8.7 million for 2007, an increase of 103 percent.
Contributing factors to the 2008 net loss included a $25.5 million loss on the sale of un-securitized loans and related hedge termination costs and approximately $10.7 million of costs, including accrued expenses, relating to the execution of the Asset Management and Disposition Plan ("the Plan") as approved by our shareholders in June 2008 and detailed in our proxy filing dated May 22, 2008. These costs included severance payments, change of control costs, losses on fixed asset disposition and the acceleration of non-cash stock compensation expense.
Cash expenses for the initial period of the Plan, July 1, 2008 through December 31, 2008, totaled $8.7 million versus projected cash expenses for the Plan period of $10.5 million. Cash expenses encompass interest expenses paid on secured related party debt and the cash costs to manage the ongoing operations of the company, including all personnel costs. Personnel costs include amounts paid for severance and employee retention. The actual balance of secured related-party debt at December 31, 2008 was $30.0 million compared to a projected Plan balance of $36.0 million, reflecting earlier than anticipated pay down of such debt.
As previously reported, we ceased originating loans for own account in March 2008, sold our loan servicing-related assets effective July 1, 2008 and sold our loan origination platform and insurance operations effective July 31, 2008. Our only remaining business is the management of retained interests in our securitized loan portfolios. In December 2008, we voluntarily delisted our common stock from the NASDAQ Global Market and also deregistered the stock under the Securities Exchange Act of 1934. Since December 31, 2007, we have reduced our workforce by 89 per cent and have dramatically reduced the operating and overhead costs associated with on-going operations. Additional workforce reductions are scheduled for the second quarter of 2009.
Ronald A. Klein, Origen's Chief Executive Officer, stated, "Our loan portfolio performance continued to be strong in the fourth quarter of 2008, and that performance has continued so far into 2009. We are especially pleased with this performance in light of the continuing decline in housing prices and the increase in the unemployment rate. Our 30-day+ delinquency rate increased moderately in the fourth quarter, but delinquencies have declined consecutively for the past three months with February's 30+ rate ending at 2.14 percent."
Mr. Klein added, "As we have previously stated, our portfolio is now an aging static pool which is approaching its peak default years. Accordingly, we expect to see increases in both delinquencies and defaults. In the current economic environment we expect our borrowers to face challenges especially if the unemployment rate continues to increase. Nevertheless, our portfolio continues to perform well due to our solid underwriting and the resulting cash flows have allowed us to pay down our secured related party debt more quickly than anticipated by our plan."
Earnings Call and Webcast
A conference call and webcast have been scheduled for March 26, 2009, at 11:00 a.m. Eastern Time to discuss fourth quarter and year-end results and current operations. The call may be accessed on Origen's web site at http://www.origenfinancial.com/ or by dialing 877-719-9786. A replay will be available through April 3, 2009 by dialing 888-203-1112 passcode 3847193. You may also access the replay on Origen's website for 90 days following the event.
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 with the Securities and Exchange Commission. 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.
ORGN-E,ORGN-D,ORGN-G 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 (Unaudited) December 31, December 31, 2008 2007 ---- ---- Assets Cash and Equivalents $14,118 $10,791 Restricted Cash 12,927 16,290 Investment Securities 9,739 32,393 Loans Receivable 911,947 1,193,916 Servicing Advances - 6,298 Servicing Rights - 2,146 Furniture, Fixtures and Equipment, Net 401 2,974 Repossessed Houses 4,543 4,981 Other Assets 11,858 14,412 ------ ------ Total Assets $965,533 $1,284,201 ======== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Warehouse Financing $- $173,072 Securitization Financing 775,120 884,650 Repurchase Agreements - 17,653 Note Payable-Related Party 29,351 14,593 Derivative Liabilities 57,887 20,443 Other Liabilities 24,980 25,405 ------ ------ Total Liabilities 887,338 1,135,816 ------- --------- Equity 78,195 148,385 ------ ------- Total Liabilities and Equity $965,533 $1,284,201 ======== ========== ORIGEN FINANCIAL, INC. CONSOLIDATED STATEMENT OF OPERATIONS (Dollars in thousands, except for share data) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, ------------ ------------ 2008 2007 2008 2007 ---- ---- ---- ---- Interest Income Total Interest Income $22,931 $24,681 $90,827 $91,267 Total Interest Expense 13,993 17,122 60,732 59,740 ------ ------ ------ ------ Net Interest Income Before Loan Losses and Impairment 8,938 7,559 30,095 31,527 Provision for Loan Losses 6,724 2,954 17,745 8,739 Impairment of Purchased Loan Pool 153 - 749 - --- --- --- --- Net Interest Income After Loan Losses and Impairment 2,061 4,605 11,601 22,788 Non-interest Income (Loss) Servicing Income 63 699 1,366 2,502 Losses on Loan Sales - - (22,377) - Other 2,200 508 (1,719) 1,133 ----- --- ------ ----- Total Non-interest Income (Loss) 2,263 1,207 (22,730) 3,635 Non-interest Expenses Total Personnel 2,240 3,842 18,936 16,888 Loan Origination & Servicing 3,465 392 7,336 1,437 Goodwill Impairment - 32,277 - 32,277 Investment Impairment 32 9,179 32 9,179 State Taxes 97 (57) 475 270 Total Other Operating 1,017 2,029 6,487 6,721 ----- ----- ----- ----- Total Non-interest Expenses 6,851 47,662 33,266 66,772 ----- ------ ------ ------ Loss From Continuing Operations Before Income Taxes (2,527) (41,850) (44,395) (40,349) Income Tax Expense (Benefit) (14) 64 61 47 --- --- --- --- Loss From Continuing Operations (2,513) (41,914) (44,456) (40,396) Income (Loss) From Discontinued Operations Net of Income Taxes (1,912) 2,783 9,092 8,629 ------ ----- ----- ----- Net Loss $(4,425) $(39,131) $(35,364) $(31,767) ======= ======== ======== ======== Weighted Average Common Shares Outstanding, Basic 25,689,639 25,395,205 25,689,639 25,316,278 ========== ========== ========== ========== Weighted Average Common Shares Outstanding, Diluted 25,689,639 25,395,205 25,689,639 25,316,278 ========== ========== ========== ========== Basic Earnings Per Common Share: Loss From Continuing Operations $(0.10) $(1.65) $(1.73) $(1.60) Income (Loss) From Discontinued Operations (0.07) 0.11 0.35 0.34 ----- ---- ---- ---- Net Loss $(0.17) $(1.54) $(1.38) $(1.26) ====== ====== ====== ======
