WOODBURY, N.Y. The ailing subprime lender Delta Financial Corp. announced Friday that it lost $33.8 million in the first quarter, or $2.12 a share, and that its stock will be delisted May 4 by the New York Stock Exchange.
In the year-earlier period Delta had net income of $1.8 million, or 11 cents a share. It said the loss reflects nonrecurring charges principally associated with a writedown of residual certificates sold under a forward purchase agreement, costs associated with closing two retail branches, and recognition of severance costs associated with the recent sale of its servicing platform to Ocwen Financial Corp. of West Palm Beach, Fla.
Hugh Miller, Deltas president and chief executive, said that the delisting will have zero impact on his company and that it will not appeal the exchanges decision, which came after the close of trading Thursday.
Delta was unable to meet the exchanges requirement that it maintain a minimum of $15 million in market capitalization and a minimum share price of $1 over a 30-day trading period. Starting May 4 its shares will trade on the over-the-counter bulletin board.
Delta officials said they expect a significant second-quarter loss. The company is finalizing a restructuring plan that includes the sale of its servicing portfolio and the extinguishing of its long-term debt.
They added that the unloading of servicing operations should eliminate cash-flow drain associated with making monthly delinquency and servicing related advances, and that they are optimistic Delta will return to profitability in the second half.