Ocwen Financial Corp. (OCN) saw its first-quarter profits fall nearly 13% as the subprime mortgage servicer’s portfolio fell to $119 billion.

The Atlanta company reported income of $19.3 million, or 14 cents a share, for the quarter ended March 31, down from $22.1 million, or 21 cents a share, for the same period in 2011.

Ocwen’s profits fell short of analysts’ expectations of 31 cents a share, according to Thomson Reuters.

First-quarter results bested Ocwen’s fourth-quarter income of $9.7 million, as the company absorbed costs from the acquisition of Litton Loan Servicing from Goldman Sachs (GS).

Revenue spiked from a year earlier, up 48% to $164.5 million from $111 million in the first quarter 2011.

Ocwen said Thursday that it spent $615 million to acquire mortgage servicing rights on $30.3 billion of unpaid principal balance from JPMorgan Chase (JPM) and Saxon Mortgage. That April 2 transaction led to $3.4 million ramp-up expenses in the first quarter.

The company also agreed to a deal with Aurora Bank to acquire roughly $1.9 billion in servicing rights on commercial mortgages. Ocwen said it expects the deal to close by the end of May.

“We continue to see a healthy pipeline of potential new servicing transactions, and we expect to close additional transactions in coming months,” Ocwen CEO Ron Faris said in a news release. “These transactions will most likely include both private-label and agency servicing.”

William Erbey, Ocwen’s chairman, said the announced deals would bring the company’s portfolio to $119 billion, down from a previously reported $129.9 billion. But Home Loan Servicing Solutions (HLSS), an Ocwen spin-off, filed for an IPO during the first quarter, and also bought $15 billion of servicing rights in unpaid principal balance from Ocwen.

Total nonperforming loans and REO as a percentage of Ocwen’s total portfolio fell to 25.6% from 27.9% three months earlier, but rose from 24.7% in March 2011.