FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION CONTACT:
James E. Lauter
Senior Vice President &
Chief Financial Officer
T: +1 345-815-3932
Home Loan Servicing Solutions, Ltd. Reports EPS of $0.76 and Net Income of $54.1 Million in the Second Quarter of 2014 and Declares Monthly Dividend of $0.16 per Share
George Town, Grand Cayman, July 17, 2014 (GLOBE NEWSWIRE) – Home Loan Servicing Solutions, Ltd. ("HLSS", “our”, “we” or the "Company") (NASDAQ: HLSS) today reported net income of $54.1 million, or $0.76 per ordinary share, for the second quarter of 2014. Additionally, the Company’s Board of Directors today declared monthly dividends of $0.16 per ordinary share for July, August and September 2014.
Second quarter business performance highlights:
Earned $41.4 million, or $0.58 per ordinary share, after adjusting for the increase in the fair value of our MSR assets of $12.7 million, or $0.18 per ordinary share. The increase in the annualized prepayment speed to 10.9 percent reduced earnings by $0.02 per ordinary share relative to first quarter earnings.
Issued $400 million of unrated four-year term notes secured by servicing advance receivables at a weighted average fixed interest rate of 2.88%.
Acquired re-performing whole loans with an aggregate UPB of $396.9 million from a large bank. The purchase price for these loans was $276.3 million.
Borrowed $219.5 million on a new $290.0 million mortgage loan facility to finance the re-performing loan purchase.
Subsequent to the end of the second quarter of 2014:
On July 16, 2014, entered into agreements to extend the maturity of our variable funding notes with an aggregate borrowing capacity of $2.1 billion to August 28, 2015.
On July 17, 2014, declared monthly dividends of $0.16 per ordinary share for each of the months of July, August and September 2014.
“After adjusting for the revaluation of our MSR assets, earnings were close to the high-end of our expectations as prepayment speeds increased only modestly from the record low last quarter. This increase was due to the predicted recovery in the rate of liquidations on seriously delinquent loans” said President and CEO John Van Vlack. “Earnings stability will benefit from the issuance of four-year fixed rate term notes and from the reinvestment of cash generated in excess of our dividend in the purchase of re-performing loans.”
“As an asset class, I expect re-performing loans to provide an attractive risk-adjusted yield based on the Company’s experience with modified loans in our existing servicing portfolio” said Chairman William Erbey. “The strategic fit of re-performing loans is enhanced as the income generated from the prepayment of loans purchased at a discount offers a hedge against prepayments in HLSS’ existing non-agency MSRs.”
For more information on prior releases and SEC Filings, please refer to the “Shareholders” section of our website at www.hlss.com.
HLSS is an internally-managed owner of residential mortgage assets with historically stable valuations and cash flows. HLSS’ largest asset is mortgage servicing advances that, along with the related servicing rights, are over-collateralized more than 25 times by the underlying residential real estate. HLSS' objective is to generate stable, recurring fee-based earnings and dividends throughout the economic cycle. For more information, visit www.hlss.com.
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release, including, without limitation, statements we make about our business model, dividend, future earnings, financing, market opportunities, asset performance, asset valuation, business strategy and
The following information was filed by Home Loan Servicing Solutions, Ltd. (HLSS) on Thursday, July 17, 2014 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.