New Residential Investment Corp. (NYSE: NRZ; “New Residential”
or the “Company”) today reported the following information for the
fourth quarter and full year ended December 31, 2019:
FOURTH QUARTER 2019 FINANCIAL
HIGHLIGHTS:
- GAAP Net Income of $211.8 million, or $0.51 per diluted common
share(1)
- Core Earnings of $255.4 million, or $0.61 per diluted common
share(1)(2)
- Common Dividend of $207.8 million, or $0.50 per common
share(1)
- Book Value per common share of $16.21(1)
FULL YEAR 2019 FINANCIAL
HIGHLIGHTS
- GAAP Net Income of $550.0 million, or $1.34 per diluted common
share(1)
- Core Earnings of $886.8 million, or $2.17 per diluted common
share(1)(2)
- Common Dividend of $807.8 million, or $2.00 per common
share(1)
4Q 2019
3Q 2019
Year Ended
Year Ended
December 31, 2019
December 31, 2018
Summary Operating Results:
GAAP Net Income per Diluted Common
Share(1)
$0.51
$0.54
$1.34
$2.81
GAAP Net Income
$211.8 million
$224.6 million
$550.0 million
$964.0 million
Non-GAAP Results:
Core Earnings per Diluted Common
Share(1)
$0.61
$0.50
$2.17
$2.38
Core Earnings(2)
$255.4 million
$207.3 million
$886.8 million
$815.2 million
NRZ Common Dividend:
Common Dividend per Share(1)
$0.50
$0.50
$2.00
$2.00
Common Dividend
$207.8 million
$207.8 million
$807.8 million
$692.7 million
“New Residential’s full mortgage platform delivered strong
results in 2019,” said Michael Nierenberg, Chairman, Chief
Executive Officer and President of New Residential. “Throughout the
year, as we faced a volatile rate environment, we were focused on
strategically growing our mortgage platform and delivering stable
returns for shareholders. Our performance during the year,
including delivering total economic return of 12% and total
shareholder return of 27%, reflects our success at executing around
our strategy.(3) Specifically, our performance demonstrated the
benefits of a diversified and balanced portfolio with
differentiated revenue streams. As we progress through 2020, we are
excited about our positioning and continue to be focused on
executing on our key business initiatives.”
FOURTH QUARTER INVESTMENT PORTFOLIO
HIGHLIGHTS:
- Origination
- Segment pre-tax net income of $86.2 million, up 138% QoQ
- Origination production grew to $10.6 billion in unpaid
principal balance (“UPB”), up 85% QoQ and 412% YoY
- Servicing
- Segment pre-tax net income of $27.3 million, up 26% QoQ
- The servicing portfolio grew to $219.4 billion in UPB, up 19%
QoQ and 101% YoY
- Mortgage Servicing Rights (“MSRs”)
- MSR portfolio totaled approximately $630 billion UPB as of
December 31, 2019, compared to $593 billion UPB as of September 30,
2019(4)
- Settled on $73 billion UPB of MSRs for $668 million of equity
from nine different counterparties
- Non-Agency Securities and Call Rights
- Sold $286 million of Non-Agency securities that were not
accretive to our call strategy and acquired $894 million of
Non-Agency securities
- Successfully executed on our call rights strategy, calling 43
deals with collateral of $1.2 billion UPB(5)
- Completed two securitizations of loans acquired through
exercise of call rights with $1.3 billion UPB of collateral
- Residential Loans
- Acquired $2.7 billion UPB of loans (including $979 million UPB
reperforming loans (“RPLs”), $495 million UPB Non-Qualified
Mortgage (“QM”) and $1.2 billion UPB collapse)
- Completed one Non-QM securitization with $305 million UPB of
collateral and one RPL securitization with $1.7 billion UPB of
collateral
- Post Q4’19 Activity(6)
- Priced a RPL securitization with $1.2 billion UPB of
collateral(7)
- Completed two securitizations with total collateral of $823
million UPB (one Non-QM and one securitization of loans acquired
through exercise of call rights)
- Preliminarily agreed to acquire ~$40 billion UPB of MSRs that
are expected to settle in Q1’20
- Per common share calculations of GAAP Net Income and Core
Earnings are based on 408,990,107 average diluted shares during the
full year ended December 31, 2019; 343,137,361 average diluted
shares during the full year ended December 31, 2018; 415,673,185
weighted average diluted shares during the quarter ended December
31, 2019; and 415,588,238 weighted average diluted shares during
the quarter ended September 30, 2019. Per share calculations of
Common Dividend are based on 415,520,780 basic shares outstanding
as of December 31, 2019 and September 30, 2019; 415,429,677 basic
shares outstanding as of June 30, 2019; 369,104,429 basic shares
outstanding as of March 31, 2019; 369,104,429 basic shares
outstanding as of December 31, 2018; 340,354,429 basic shares
outstanding as of September 30, 2018; 339,862,769 basic shares
outstanding as of June 30, 2018; and 336,135,391 basic shares
outstanding as of March 31, 2018. Per common share calculations for
Book Value are based on 415,520,780 basic common shares outstanding
as of December 31, 2019.
- Core Earnings is a non-GAAP measure. For a reconciliation of
Core Earnings to GAAP Net Income, as well as an explanation of this
measure, please refer to Non-GAAP Measures and Reconciliation to
GAAP Net Income below.
- FY ‘19 Economic Return represents NRZ book value change from
December 31, 2018 through December 31, 2019 plus common dividends
declared during that time ($2.00) divided by NRZ book value per
common share as of December 31, 2018. FY’19 Total Shareholder
Return represents NRZ common share price appreciation from December
31, 2018 through December 31, 2019 plus common dividends declared
during that time ($2.00) divided by NRZ common share price as of
December 31, 2018.
- Includes Excess and Full MSRs.
- Call rights UPB estimated as of December 31, 2019. The UPB of
the loans relating to our call rights may be materially lower than
the estimates in this press release, and there can be no assurance
that we will be able to execute on this pipeline of callable deals
in the near term, on the timeline presented above, or at all, or
that callable deals will be economically favorable. The economic
returns from this strategy could be adversely affected by a rise in
interest rates and are contingent on the level of delinquencies and
outstanding advances in each transaction, fair market value of the
related collateral and other economic factors and market
conditions. We may become subject to claims and legal proceedings,
including purported class-actions, in the ordinary course of our
business, challenging our right to exercise these call rights and,
as a result, we may not be able to exercise such rights on
favorable terms at all. Call rights are usually exercisable when
current loan balances in a related portfolio are equal to, or lower
than, 10% of their original balance.
- Represents activity from January 1, 2020 through February 5,
2020. Based on management’s current views and estimates, and actual
results may vary materially.
- New Residential Mortgage Loan Trust 2020-RPL1 is expected to
settle on February 7, 2020.
ADDITIONAL INFORMATION
For additional information that management believes to be useful
for investors, please refer to the latest presentation posted on
the Investor Relations section of the Company’s website,
www.newresi.com. For consolidated investment portfolio information,
please refer to the Company’s most recent Quarterly Report on Form
10-Q or Annual Report on Form 10-K, which are available on the
Company’s website, www.newresi.com.
EARNINGS CONFERENCE CALL
New Residential’s management will host a conference call on
Thursday, February 6, 2020 at 8:00 A.M. Eastern Time. A copy of the
earnings release will be posted to the Investor Relations section
of New Residential’s website, www.newresi.com.
All interested parties are welcome to participate on the live
call. The conference call may be accessed by dialing 1-866-393-1506
(from within the U.S.) or 1-281-456-4044 (from outside of the U.S.)
ten minutes prior to the scheduled start of the call; please
reference “New Residential Fourth Quarter & Full Year 2019
Earnings Call.”
A simultaneous webcast of the conference call will be available
to the public on a listen-only basis at www.newresi.com. Please
allow extra time prior to the call to visit the website and
download any necessary software required to listen to the internet
broadcast.
A telephonic replay of the conference call will also be
available two hours following the call’s completion through 11:59
P.M. Eastern Time on Thursday, February 20, 2020 by dialing
1-855-859-2056 (from within the U.S.) or 1-404-537-3406 (from
outside of the U.S.); please reference access code “3679502.”
Consolidated Statements of
Income
($ in thousands, except share and per
share data)
Quarter Ended
Year Ended December 31,
December 31, 2019 September 30, 2019
2019
2018
(unaudited) (unaudited) (unaudited)
Interest income
$
463,089
$
448,127
$
1,766,130
$
1,664,223
Interest expense
247,013
245,902
933,751
606,433
Net Interest Income
216,076
202,225
832,379
1,057,790
Impairment Other-than-temporary impairment (OTTI) on
securities
3,232
5,567
25,174
30,017
Valuation and loss provision (reversal) on loans and real estate
owned (REO)
2,361
(10,690
)
10,403
60,624
5,593
(5,123
)
35,577
90,641
Net interest income after impairment
210,483
207,348
796,802
967,149
Servicing revenue, net of change in fair value of $(93,036),
$(228,405), $(712,950) and $(191,245), respectively
251,793
53,050
385,159
528,595
Gain on originated mortgage loans, held-for-sale, net
180,520
126,747
475,455
96,145
Other Income Change in fair value of investments in excess
mortgage servicing rights
(9,084
)
2,407
(10,505
)
(58,656
)
Change in fair value of investments in excess mortgage servicing
rights, equity method investees
2,713
4,751
6,800
8,357
Change in fair value of investments in mortgage servicing rights
financing receivables
(55,823
)
(41,410
)
(189,023
)
31,550
Change in fair value of servicer advance investments
(5,644
)
6,641
10,288
(89,332
)
Change in fair value of investments in residential mortgage loans
(146,006
)
(6,513
)
(70,914
)
69,820
Change in fair value of derivative investments
(31,107
)
41,389
(56,143
)
(108,234
)
Gain (loss) on settlement of investments, net
131,073
133,141
225,687
95,085
Earnings from investments in consumer loans, equity method
investees
(548
)
(2,547
)
(1,438
)
10,803
Other income (loss), net
60,600
(35,219
)
44,149
(10,778
)
(53,826
)
102,640
(41,099
)
(51,385
)
Operating Expenses General and administrative
expenses
186,676
133,513
538,035
231,579
Management fee to affiliate
21,211
20,678
79,472
62,594
Incentive compensation to affiliate
42,627
36,307
91,892
94,900
Loan servicing expense
5,570
7,192
31,737
43,547
Subservicing expense
79,719
52,875
227,482
176,784
335,803
250,565
968,618
609,404
Income Before Income Taxes
253,167
239,220
647,699
931,100
Income tax (benefit) expense
22,786
(5,440
)
41,766
(73,431
)
Net Income
$
230,381
$
244,660
$
605,933
$
1,004,531
Noncontrolling Interests in Income of Consolidated
Subsidiaries
$
10,658
$
14,738
$
42,637
$
40,564
Dividends on Preferred Stock
$
7,943
$
5,338
$
13,281
$
-
Net Income Attributable to Common Stockholders
$
211,780
$
224,584
$
550,015
$
963,967
Net Income Per Share of Common Stock Basic
$
0.51
$
0.54
$
1.35
$
2.82
Diluted
$
0.51
$
0.54
$
1.34
$
2.81
Weighted Average Number of Shares of Common Stock
Outstanding Basic
415,520,780
415,520,780
408,789,642
341,268,923
Diluted
415,673,185
415,588,238
408,990,107
343,137,361
Dividends Declared per Share of Common Stock
$
0.50
$
0.50
$
2.00
$
2.00
Consolidated Balance Sheets
($ in thousands)
December 31, 2019
December 31, 2018 Assets
(unaudited) Investments in: Excess mortgage servicing rights
(“MSRs”), at fair value
$
379,747
$
447,860
Excess mortgage servicing rights, equity method investees, at fair
value
125,596
147,964
Mortgage servicing rights, at fair value
3,967,960
2,884,100
Mortgage servicing rights financing receivables, at fair value
1,718,273
1,644,504
Servicer advance investments, at fair value
581,777
735,846
Real estate and other securities, available-for-sale
19,477,728
11,636,581
Residential mortgage loans, held-for-investment (includes $108,630
and $121,088 at fair value atDecember 31, 2019 and December 31,
2018, respectively)
549,893
735,329
Residential mortgage loans, held-for-sale
1,429,052
932,480
Residential mortgage loans, held-for-sale, at fair value
4,989,425
2,808,529
Consumer loans, held-for-investment
827,545
1,072,202
Cash and cash equivalents
528,737
251,058
Restricted cash
162,197
164,020
Servicer advances receivable
3,301,374
3,277,796
Trades receivable
5,256,014
3,925,198
Deferred tax asset, net
8,669
65,832
Other assets (includes $172,336 and $121,602 in residential
mortgage loans subject to repurchase atDecember 31, 2019 and
December 31, 2018, respectively)
1,573,056
961,714
$
44,877,043
$
31,691,013
Liabilities and Equity Liabilities
Repurchase agreements
$
27,916,225
$
15,553,969
Notes and bonds payable (includes $659,715 and $117,048 at fair
value at December 31, 2019 andDecember 31, 2018, respectively)
7,720,148
7,102,266
Trades payable
902,081
2,048,348
Due to affiliates
103,882
101,471
Dividends payable
211,732
184,552
Accrued expenses and other liabilities (includes $172,336 and
$121,602 in residential mortgage loansrepurchase liabilities at
December 31, 2019 and December 31, 2018, respectively)
786,715
612,112
37,640,783
25,602,718
Commitments and Contingencies Equity
Preferred Stock, par value of $0.01 per share, 23,000,000 shares
authorized: 7.50% Series A Preferred Stock, $0.01 par value,
11,500,000 shares authorized, 6,210,000 and 0 issued andoutstanding
at December 31, 2019 and December 31, 2018, respectively
150,026
-
7.125% Series B Preferred Stock, $0.01 par value, 11,500,000 shares
authorized, 11,300,000 and 0 issuedand outstanding at December 31,
2019 and December 31, 2018, respectively
273,418
-
Common Stock, $0.01 par value, 2,000,000,000 shares authorized,
415,520,780 and 369,104,429 issued andoutstanding at December 31,
2019 and December 31, 2018, respectively
4,156
3,692
Additional paid-in capital
5,498,226
4,746,242
Retained earnings
549,733
830,713
Accumulated other comprehensive income (loss)
682,151
417,023
Total New Residential stockholders’ equity
7,157,710
5,997,670
Noncontrolling interests in equity of consolidated subsidiaries
78,550
90,625
Total Equity
7,236,260
6,088,295
$
44,877,043
$
31,691,013
NON-GAAP MEASURES AND RECONCILIATION TO GAAP NET
INCOME
New Residential has five primary variables that impact its
operating performance: (i) the current yield earned on the
Company’s investments, (ii) the interest expense under the debt
incurred to finance the Company’s investments, (iii) the Company’s
operating expenses and taxes, (iv) the Company’s realized and
unrealized gains or losses, including any impairment, on the
Company’s investments, and (v) income from its origination and
servicing businesses. “Core earnings” is a non-GAAP measure of the
Company’s operating performance, excluding the fourth variable
above and adjusts the earnings from the consumer loan investment to
a level yield basis. Core earnings is used by management to
evaluate the Company’s performance without taking into account: (i)
realized and unrealized gains and losses, which although they
represent a part of the Company’s recurring operations, are subject
to significant variability and are generally limited to a potential
indicator of future economic performance; (ii) incentive
compensation paid to the Company’s manager; (iii) non-capitalized
transaction-related expenses; and (iv) deferred taxes, which are
not representative of current operations.
The Company’s definition of core earnings includes accretion on
held-for-sale loans as if they continued to be held-for-investment.
Although the Company intends to sell such loans, there is no
guarantee that such loans will be sold or that they will be sold
within any expected timeframe. During the period prior to sale, the
Company continues to receive cash flows from such loans and
believes that it is appropriate to record a yield thereon. In
addition, the Company’s definition of core earnings excludes all
deferred taxes, rather than just deferred taxes related to
unrealized gains or losses, because the Company believes deferred
taxes are not representative of current operations. The Company’s
definition of core earnings also limits accreted interest income on
RMBS where the Company receives par upon the exercise of associated
call rights based on the estimated value of the underlying
collateral, net of related costs including advances. The Company
created this limit in order to be able to accrete to the lower of
par or the net value of the underlying collateral, in instances
where the net value of the underlying collateral is lower than par.
The Company believes this amount represents the amount of accretion
the Company would have expected to earn on such bonds had the call
rights not been exercised.
The Company’s investments in consumer loans are accounted for
under Accounting Standards Codification (“ASC”) No. 310-20 and ASC
No. 310-30, including certain non-performing consumer loans with
revolving privileges that are explicitly excluded from being
accounted for under ASC No. 310-30. Under ASC No. 310-20, the
recognition of expected losses on these non-performing consumer
loans is delayed in comparison to the level yield methodology under
ASC No. 310-30, which recognizes income based on an expected cash
flow model reflecting an investment’s lifetime expected losses. The
purpose of the core earnings adjustment to adjust consumer loans to
a level yield is to present income recognition across the consumer
loan portfolio in the manner in which it is economically earned,
avoid potential delays in loss recognition, and align it with the
Company’s overall portfolio of mortgage-related assets which
generally record income on a level yield basis. With respect to
consumer loans classified as held-for-sale, the level yield is
computed through the expected sale date. With respect to the gains
recorded under GAAP in 2014 and 2016 as a result of a refinancing
of the debt related to the Company’s investments in consumer loans,
and the consolidation of entities that own the Company’s
investments in consumer loans, respectively, the Company continues
to record a level yield on those assets based on their original
purchase price.
While incentive compensation paid to the Company’s manager may
be a material operating expense, the Company excludes it from core
earnings because (i) from time to time, a component of the
computation of this expense will relate to items (such as gains or
losses) that are excluded from core earnings, and (ii) it is
impractical to determine the portion of the expense related to core
earnings and non-core earnings, and the type of earnings (loss)
that created an excess (deficit) above or below, as applicable, the
incentive compensation threshold. To illustrate why it is
impractical to determine the portion of incentive compensation
expense that should be allocated to core earnings, the Company
notes that, as an example, in a given period, it may have core
earnings in excess of the incentive compensation threshold but
incur losses (which are excluded from core earnings) that reduce
total earnings below the incentive compensation threshold. In such
case, the Company would either need to (a) allocate zero incentive
compensation expense to core earnings, even though core earnings
exceeded the incentive compensation threshold, or (b) assign a “pro
forma” amount of incentive compensation expense to core earnings,
even though no incentive compensation was actually incurred. The
Company believes that neither of these allocation methodologies
achieves a logical result. Accordingly, the exclusion of incentive
compensation facilitates comparability between periods and avoids
the distortion to the Company’s non-GAAP operating measure that
would result from the inclusion of incentive compensation that
relates to non-core earnings.
With regard to non-capitalized transaction-related expenses,
management does not view these costs as part of the Company’s core
operations, as they are considered by management to be similar to
realized losses incurred at acquisition. Non-capitalized
transaction-related expenses are generally legal and valuation
service costs, as well as other professional service fees, incurred
when the Company acquires certain investments, as well as costs
associated with the acquisition and integration of acquired
businesses.
Since the third quarter of 2018, as a result of its acquisition
of Shellpoint Partners LLC (“Shellpoint”), the Company, through its
wholly owned subsidiary, NewRez (formerly New Penn Financial),
originates conventional, government-insured and nonconforming
residential mortgage loans for sale and securitization. In
connection with the transfer of loans to the GSEs or mortgage
investors, the Company reports realized gains or losses on the sale
of originated residential mortgage loans and retention of mortgage
servicing rights, which the Company believes is an indicator of
performance for the Servicing and Origination segments and
therefore included in core earnings. Realized gains or losses on
the sale of originated residential mortgage loans had no impact on
core earnings in any prior period, but may impact core earnings in
future periods.
Beginning with the third quarter of 2019, as a result of the
continued evaluation of how Shellpoint operates its business and
its impact on the Company’s operating performance, core earnings
includes Shellpoint’s GAAP net income with the exception of the
unrealized gains or losses due to changes in valuation inputs and
assumptions on MSRs owned by NewRez, and non-capitalized
transaction-related expenses. This change was not material to core
earnings for the quarter ended September 30, 2019.
Management believes that the adjustments to compute “core
earnings” specified above allow investors and analysts to readily
identify and track the operating performance of the assets that
form the core of the Company’s activity, assist in comparing the
core operating results between periods, and enable investors to
evaluate the Company’s current core performance using the same
measure that management uses to operate the business. Management
also utilizes core earnings as a measure in its decision-making
process relating to improvements to the underlying fundamental
operations of the Company’s investments, as well as the allocation
of resources between those investments, and management also relies
on core earnings as an indicator of the results of such decisions.
Core earnings excludes certain recurring items, such as gains and
losses (including impairment as well as derivative activities) and
non-capitalized transaction-related expenses, because they are not
considered by management to be part of the Company’s core
operations for the reasons described herein. As such, core earnings
is not intended to reflect all of the Company’s activity and should
be considered as only one of the factors used by management in
assessing the Company’s performance, along with GAAP net income
which is inclusive of all of the Company’s activities.
The primary differences between core earnings and the measure
the Company uses to calculate incentive compensation relate to (i)
realized gains and losses (including impairments), (ii)
non-capitalized transaction-related expenses and (iii) deferred
taxes (other than those related to unrealized gains and losses).
Each are excluded from core earnings and included in the Company’s
incentive compensation measure (either immediately or through
amortization). In addition, the Company’s incentive compensation
measure does not include accretion on held-for-sale loans and the
timing of recognition of income from consumer loans is different.
Unlike core earnings, the Company’s incentive compensation measure
is intended to reflect all realized results of operations. The Gain
on Remeasurement of Consumer Loans Investment was treated as an
unrealized gain for the purposes of calculating incentive
compensation and was therefore excluded from such calculation.
Core earnings does not represent and should not be considered as
a substitute for, or superior to, net income or as a substitute
for, or superior to, cash flows from operating activities, each as
determined in accordance with U.S. GAAP, and the Company’s
calculation of this measure may not be comparable to similarly
entitled measures reported by other companies. Set forth below is a
reconciliation of core earnings to the most directly comparable
GAAP financial measure (in thousands):
Three Months Ended
Year Ended December 31,
December 31, September 30,
2019
2019
2019
2018
Net income attributable to common stockholders
$
211,780
$
224,584
$
550,015
$
963,967
Adjustments for Non-Core Earnings: Impairment
5,360
(5,123
)
35,344
90,641
Change in fair value of investments in mortgage servicing rights
(100,344
)
45,541
171,915
(244,624
)
Change in fair value of servicer advance investments
5,644
(6,641
)
(10,288
)
89,332
Change in fair value of investments in residential mortgage loans
145,308
7,290
43,009
(74,162
)
Change in fair value of derivative instruments
31,113
(41,910
)
49,699
113,558
(Gain) loss on settlement of investments, net
(112,584
)
(114,325
)
(158,640
)
(96,319
)
Other (income) loss
(44,487
)
35,271
(27,985
)
11,425
Other Income and Impairment attributable to non-controlling
interests
(4,495
)
(994
)
(13,548
)
(22,247
)
Non-capitalized transaction-related expenses
31,984
8,155
56,289
21,946
Incentive compensation to affiliate
42,627
36,307
91,892
94,900
Preferred stock management fee to affiliate
1,588
1,055
2,642
-
Deferred taxes
20,127
(6,652
)
38,207
(80,054
)
Interest income on residential mortgage loans, held-for sale
15,648
18,852
60,689
13,374
Limit on RMBS discount accretion related to called deals
-
(34
)
(19,590
)
(58,581
)
Adjust consumer loans to level yield
355
1,922
5,239
(21,181
)
Core earnings of equity method investees: Excess mortgage servicing
rights
5,803
3,987
11,905
13,183
Core Earnings
$
255,427
$
207,286
$
886,794
$
815,158
Net Income Per Diluted Share
$
0.51
$
0.54
$
1.34
$
2.81
Core Earnings Per Diluted Share
$
0.61
$
0.50
$
2.17
$
2.38
Weighted Average Number of Shares of Common Stock
Outstanding, Diluted
415,673,185
415,588,238
408,990,107
343,137,361
NET INCOME BY SEGMENT
Servicing and Originations Residential Securities
and Loans Originations Servicing MSRs
&ServicerAdvances ResidentialSecurities &Call
Rights ResidentialLoans Corporate& Other
Total Quarter Ended December 31,
2019 Interest income
$
17,321
$
8,665
$
151,755
$
186,250
$
61,765
$
37,333
$
463,089
Interest expense
16,895
306
61,694
122,617
38,461
7,040
247,013
Net interest income
426
8,359
90,061
63,633
23,304
30,293
216,076
Impairment
-
-
-
3,232
(4,050
)
6,411
5,593
Servicing revenue, net
(390
)
56,020
196,163
-
-
-
251,793
Gain on originated mortgage loans, held-for-sale, net
160,280
348
6,748
-
13,144
-
180,520
Other income (loss)
8,886
5,343
(11,876
)
(10,748
)
(42,859
)
(2,572
)
(53,826
)
Operating expenses
82,953
42,790
117,374
(964
)
21,456
72,194
335,803
Income (Loss) Before Income Taxes
86,249
27,280
163,722
50,617
(23,817
)
(50,884
)
253,167
Income tax expense (benefit)
24,286
8,150
29,819
-
(39,509
)
40
22,786
Net Income (Loss)
$
61,963
$
19,130
$
133,903
$
50,617
$
15,692
$
(50,924
)
$
230,381
Noncontrolling interests in income (loss) of
consolidatedsubsidiaries
1,824
-
(211
)
-
-
9,045
10,658
Dividends on Preferred Stock
$
-
$
-
$
-
$
-
$
-
$
7,943
$
7,943
Net income (loss) attributable to common stockholders
$
60,139
$
19,130
$
134,114
$
50,617
$
15,692
$
(67,912
)
$
211,780
Servicing and Originations Residential
Securities and Loans Originations Servicing
MSRs &ServicerAdvances ResidentialSecurities
&Call Rights ResidentialLoans Corporate&
Other Total Quarter Ended
September 30, 2019 Interest income
$
10,873
$
8,847
$
129,727
$
184,933
$
73,416
$
40,331
$
448,127
Interest expense
10,359
264
61,399
123,023
43,364
7,493
245,902
Net interest income
514
8,583
68,328
61,910
30,052
32,838
202,225
Impairment
-
-
-
5,567
(16,553
)
5,863
(5,123
)
Servicing revenue, net
(548
)
48,612
4,986
-
-
-
53,050
Gain on originated mortgage loans, held-for-sale, net
106,216
348
(1,428
)
-
21,611
-
126,747
Other income (loss)
1
-
(43,143
)
116,081
33,541
(3,840
)
102,640
Operating expenses
69,941
35,815
62,344
1,839
14,006
66,620
250,565
Income (Loss) Before Income Taxes
36,242
21,728
(33,601
)
170,585
87,751
(43,485
)
239,220
Income tax expense (benefit)
9,081
5,292
(3,624
)
-
(15,546
)
(643
)
(5,440
)
Net Income (Loss)
$
27,161
$
16,436
$
(29,977
)
$
170,585
$
103,297
$
(42,842
)
$
244,660
Noncontrolling interests in income (loss) of
consolidatedsubsidiaries
2,457
-
1,684
-
-
10,597
14,738
Dividends on Preferred Stock
$
-
$
-
$
-
$
-
$
-
$
5,338
$
5,338
Net income (loss) attributable to common stockholders
$
24,704
$
16,436
$
(31,661
)
$
170,585
$
103,297
$
(58,777
)
$
224,584
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain information in this press release constitutes as
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, including, but not
limited to our strategy, growth opportunities, ability to execute
on key business initiatives, and the ability to close any deals
that we have priced or for which we have entered into any
preliminary agreements. These statements are not historical facts.
They represent management’s current expectations regarding future
events and are subject to a number of trends and uncertainties,
many of which are beyond our control, which could cause actual
results to differ materially from those described in the
forward-looking statements. Accordingly, you should not place undue
reliance on any forward-looking statements contained herein. For a
discussion of some of the risks and important factors that could
affect such forward-looking statements, see the sections entitled
“Cautionary Statements Regarding Forward Looking Statements,” “Risk
Factors” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” in the Company’s annual and
quarterly reports and other filings filed with the U.S. Securities
and Exchange Commission, which are available on the Company’s
website (www.newresi.com). New risks and uncertainties emerge from
time to time, and it is not possible for New Residential to predict
or assess the impact of every factor that may cause its actual
results to differ from those contained in any forward-looking
statements. Forward-looking statements contained herein speak only
as of the date of this press release, and New Residential expressly
disclaims any obligation to release publicly any updates or
revisions to any forward-looking statements contained herein to
reflect any change in New Residential's expectations with regard
thereto or change in events, conditions or circumstances on which
any statement is based.
ABOUT NEW RESIDENTIAL
New Residential is a leading provider of capital and services to
the mortgage and financial services industry with a proven track
record of returns and performance. The Company’s mission is to
generate attractive risk-adjusted returns in all interest rate
environments through a portfolio of investments and operating
businesses. With approximately $45 billion in assets as of December
31, 2019, New Residential has built a diversified,
hard-to-replicate portfolio with high-quality investment strategies
that have generated returns across different interest rate
environments over time. New Residential’s portfolio is composed of
mortgage servicing related assets (including investments in
operating entities consisting of servicing, origination, and
affiliated businesses), residential securities (and associated
called rights) and loans, and consumer loans. New Residential’s
investments in operating entities include its mortgage origination
and servicing subsidiary, NewRez, and its special servicing
division, Shellpoint Mortgage Servicing, as well as investments in
affiliated businesses that provide services that are complementary
to the origination and servicing businesses and other portfolios of
mortgage related assets. Since inception in 2013, New Residential
has a proven track record of performance, growing and protecting
the value of its assets while generating attractive risk-adjusted
returns and delivering approximately $3.3 billion in dividends to
shareholders. New Residential is organized and conducts its
operations to qualify as a real estate investment trust (“REIT”)
for federal income tax purposes. New Residential is managed by an
affiliate of Fortress Investment Group LLC, a global investment
management firm, and headquartered in New York City.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200206005334/en/
Investor Relations Kaitlyn Mauritz 212-479-3150
IR@NewResi.com
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