Rithm Capital Corp (RITM)

[Enterprising Investor]

New Residential Announces First Quarter 2019 Results (5/01/19)

NEW YORK--(BUSINESS WIRE)--New Residential Investment Corp. (NYSE: NRZ; “New Residential” or the “Company”) today reported the following information for the first quarter ended March 31, 2019:

FIRST QUARTER FINANCIAL HIGHLIGHTS:

- GAAP Net Income of $145.6 million, or $0.37 per diluted share(1)

- Core Earnings of $204.3 million, or $0.53 per diluted share(1)(2)

- Common Dividend of $207.7 million, or $0.50 per share(1)

- Book Value per share of $16.42(1)

“During the first quarter of 2019, New Residential again demonstrated the strength of our portfolio and our ability to execute across different market environments as we grew our book value and generated stable core earnings,” said Michael Nierenberg, Chairman, Chief Executive Officer and President. “Our results to start the year were bolstered by the performance of our bond and loan portfolios as well as by the realized benefits from Shellpoint’s origination capabilities. Overall, we think that the current market backdrop is supportive of our strategy and that the diversified and complementary nature of our portfolio is well-positioned in this environment. As I have mentioned before, we continue to see incremental opportunities to capture the full value of the mortgage asset and we intend to be opportunistic in pursuing growth opportunities that are additive to our long-term strategy and that benefit our shareholders.”

(1) Per share calculations of GAAP Net Income and Core Earnings are based on 388,601,075 weighted average diluted shares during the quarter ended March 31, 2019 and 358,509,094 weighted average diluted shares during the quarter ended December 31, 2018. Per share calculations of Common Dividend are based on 415,429,677 basic shares outstanding as of March 31, 2019 and 369,104,429 basic shares outstanding as of December 31, 2018. Per share calculations for Book Value are based on 415,429,677 basic shares outstanding as of March 31, 2019.

(2) 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.

First Quarter 2019 Highlights:

Mortgage Servicing Rights (“MSRs”)

- Acquired MSRs totaling approximately $22 billion unpaid principal balance (“UPB”).

Non-Agency Securities and Call Rights

- New Residential controls call rights to approximately $116 billion of mortgage collateral, representing approximately 35% of the Non-Agency market.(3)(4) Approximately $45 billion of our call rights population is currently callable. (3)

- During the first quarter, we executed clean-up calls on 19 seasoned, Non-Agency residential mortgage-backed securities (“RMBS”) deals with an aggregate UPB of approximately $910 million.

- Purchased $411 million face value of Non-Agency RMBS.
Completed two Non-Agency securitizations for approximately $750 million (seasoned performing loans $284 million; reperforming loans (“RPLs”) $462 million).

Residential Loans

- Acquired $1.4 billion UPB of loans ($690 million UPB of RPLs).
Completed two non-qualifying mortgage (Non-QM) loan securitizations for a combined aggregate UPB of approximately $600 million.

Servicer Advances

- We continued to work with our sub-servicers to lower advance balances during the quarter – advance balances (with servicers Nationstar, Ocwen and SLS) as of March 31, 2019 were $3.3 billion, representing an 8% decline quarter-over-quarter.

Additional Highlights

- Raised $752 million in gross proceeds of common equity during the quarter.

(3) 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, 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. Call rights are usually exercisable when current loan balances in a related portfolio are equal to, or lower than, 10% of their original balance.

(4) All data as of March 31, 2019, unless otherwise stated.

ABOUT NEW RESIDENTIAL

New Residential focuses on opportunistically investing in, and actively managing, investments principally related to residential real estate. The Company primarily targets investments in mortgage servicing related assets and other related opportunistic investments. New Residential is organized and conducts its operations to qualify as a real estate investment trust (“REIT”) for federal income tax purposes. The Company is managed by an affiliate of Fortress Investment Group LLC, a global investment management firm.

https://www.businesswire.com/news/home/20190501005342/en/New-Residential-Announces-Quarter-2019-Results