Profile: Standard Pacific Corp (SPF)

Standard Pacific Corp., incorporated on August 14, 1991, is a geographically diversified business spans many of the housing markets, including metropolitan markets in California, Florida, the Carolinas, Texas, Arizona, and Colorado. The Company operates in two principal businesses: homebuilding and financial services (consisting of its mortgage financing and title operations). Its homebuilding operations construct and sell single-family attached and detached homes. Homebuilding operating segments have been grouped into three reportable segments: California; Southwest, consisting of its operating divisions in Arizona, Texas, Colorado and Nevada; and Southeast, consisting of its operating divisions in Florida and the Carolinas. Its mortgage financing operation provides mortgage financing to its homebuyers in substantially all of the markets in which it operates, and sells substantially all of the loans it originates in the secondary mortgage market. Its title service operation provides title examinations for its homebuyers in Texas.

Homebuilding Operations

The Company build homes in 24 markets through a total of 14 operating divisions. Its homes sizes typically range from approximately 1,500 to 3,500 square feet, although it has built homes from 1,100 to over 6,000 square feet. As of December 31, 2012, it owned or controlled 30,767 homesites (including joint ventures) and had 156 active selling communities. For the year ended December 31, 2012, approximately 77% of its deliveries were single-family detached homes. The remainders of its deliveries were single family attached homes, generally townhomes and condominiums configured with eight or fewer units per building.

Financial Services

As part of its ongoing operations, it provides mortgage loans to many of its homebuyers through its mortgage financing subsidiary, Standard Pacific Mortgage. Standard Pacific Mortgage’s principal sources of revenue are fees generated from loan originations, net gains on the sale of loans and net interest income earned on loans during the period they are held prior to sale. It sells substantially all of the loans it originates in the secondary mortgage market, with servicing rights released on a non-recourse basis. These sales are generally subject to its obligation to repay gain on sale if the loan is prepaid by the borrower within a certain time period following such sale, or to repurchase the loan if, among other things, the loan purchaser’s underwriting guidelines are not met or there is fraud in connection with the loan. In Texas, it acts as a title insurance agent performing title examination services for its Texas homebuyers through its title service subsidiary, SPH Title, Inc.