Ocwen Financial (OCN) - 2025 Q3 - Quarterly Results

Financial Performance - Net income attributable to common stockholders reached $18 million, with diluted EPS of $2.03 and ROE of 14%[7] - Adjusted pre-tax income was $31 million, resulting in an annualized adjusted ROE of 25%[7] - Net income attributable to common stockholders for Q3'25 was $18 million, down from $21 million in Q3'24, reflecting a decrease of 14.3% year-over-year[23] - Total revenue for Q3'25 increased to $280.3 million, compared to $265.7 million in Q3'24, representing a growth of 5.2%[26] - Adjusted pre-tax income for Q3'25 was $31 million, consistent with Q3'24, despite notable items impacting the financials[24] - The company's GAAP ROE (after tax) decreased to 14% in Q3'25 from 19% in Q3'24[24] - Basic EPS for Q3'25 was $2.19, down from $2.72 in Q3'24, reflecting a decrease of 19.5%[26] Asset and Liquidity Management - Total liquidity stood at $221 million as of September 30, 2025[8] - Total assets as of September 30, 2025, were $16,107.4 million, compared to $13,226.7 million a year earlier, marking a growth of 21.6%[25] - Cash and cash equivalents decreased to $172.8 million in Q3'25 from $201.6 million in Q3'24, a decline of 14.3%[25] Mortgage Servicing and Originations - Originations volume hit $12 billion, reflecting a 39% year-over-year increase, surpassing the industry growth rate[7] - Average servicing UPB increased to $312 billion, up $7 billion year-over-year[7] - Funded recapture volume rose 1.8 times year-over-year, with a year-to-date refinance recapture rate of 1.9 times the industry average[8] - The company added 9 new subservicing clients year-to-date[8] - Mortgage servicing rights (MSRs) at fair value rose to $2,762.9 million in Q3'25, up from $2,223.6 million in Q3'24, indicating a significant increase of 24.2%[25] - The company reported a total of $45 million in MSR valuation adjustments for Q3'25, compared to $(31.5) million in Q3'24, indicating a negative shift in valuation[26] Future Expectations and Guidance - The company expects to exceed its 2025 adjusted ROE guidance range of 16% - 18%[7] - The company anticipates releasing a significant portion of a $180 million deferred tax asset valuation allowance by year-end 2025[7] - The company plans to recognize changes in fair value due to interest rates for reverse loan buyouts as notable starting Q4'24, which may impact future financial reporting[23] Subservicing Agreements - The Rithm subservicing agreements, representing approximately $33 billion or 10% of total servicing UPB, will not be renewed effective January 31, 2026[9]