NRZ New Residential Investment Corporation

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, 2021:

Fourth Quarter 2021 Financial Highlights:

• GAAP net income of $160.4 million, or $0.33 per diluted common share(1)
• Core earnings of $191.9 million, or $0.40 per diluted common share(1)(2)
• Common dividend of $116.7 million, or $0.25 per common share
• Book value per common share of $11.44(1)

Full Year 2021 Financial Highlights:

• GAAP net income of $705.5 million, or $1.51 per diluted common share(1)
• Core earnings of $693.2 million, or $1.48 per diluted common share(1)(2)
• Common dividend of $409.6 million, or $0.90 per common share

 

Q4 2021

 

Q3 2021

 

FY 2021

 

FY 2020

 

Summary Operating Results:

 

 

 

 

 

 

 

 

GAAP Net Income (Loss) per Diluted Common Share(1)

$

0.33

 

$

0.30

 

$

1.51

 

$

(3.52

)

 

GAAP Net Income (Loss)

$

160.4

million

$

146.1

million

$

705.5

million

$

(1,464.7

)

million

 

 

 

 

 

 

 

 

 

Non-GAAP Results:

 

 

 

 

 

 

 

 

Core Earnings per Diluted Common Share(1)

$

0.40

 

$

0.44

 

$

1.48

 

$

1.46

 

 

Core Earnings(2)

$

191.9

million

$

209.9

million

$

693.2

million

$

607.2

 

million

 

 

 

 

 

 

 

 

 

NRZ Common Dividend:

 

 

 

 

 

 

 

 

Common Dividend per Share

$

0.25

 

$

0.25

 

$

0.90

 

$

0.50

 

 

Common Dividend

$

116.7

million

$

116.6

million

$

409.6

million

$

207.7

 

million

“New Residential delivered another quarter and full year of strong results, rounding out 2021 on a high note,” said Michael Nierenberg, Chairman, Chief Executive Officer and President of New Residential.

“As we look ahead in 2022, we are extremely well-positioned to benefit from the current rate environment given our large portfolio of MSRs and our complementary operating businesses, which should help drive earnings and book value higher,” he added. “We will continue to prioritize reducing expenses and achieving synergies across all of our operating businesses and look forward to executing on our strategy of combining these businesses with our investment management expertise and unique portfolio of investments to drive attractive risk-adjusted returns for our shareholders.”

Fourth Quarter 2021 Company Highlights:

• Corporate Highlights
  • Closed acquisition of Genesis Capital LLC (“Genesis”)
    • New Residential completed its previously announced acquisition of Genesis, a finance company specializing in providing loans to developers of new construction, fix and flip and rental hold projects. New Residential’s results for the fourth quarter and full year include the financial results of Genesis beginning on December 20, 2021

• Origination
  • Segment pre-tax income of $101.5 million (down from $177.5 million in Q3)(3)
  • Quarterly origination funded production of $38.1 billion in unpaid principal balance (“UPB”) (up 10% QoQ)
  • Total gain on sale margin of 1.65% for the fourth quarter of 2021 compared to 1.61% for the third quarter of 2021

• Servicing
  • Segment pre-tax income of $127.5 million (up from $15.0 million in Q3)
  • Servicing portfolio grew to $483 billion in UPB (up 1.5% QoQ)
  • Acquired approximately $908 million of early buyout (“EBO”) loans and redelivered $868 million of EBO loans for gains of approximately $31 million

• MSRs and Servicer Advances
  • MSR portfolio totaled approximately $629 billion UPB at December 31, 2021 compared to $635 billion UPB at September 30, 2021(4)
  • Servicer advance balances of $3.3 billion as of December 31, 2021, effectively unchanged from September 30, 2021
  • Priced one MSR debt securitization for $567 million

• Residential Securities and Call Rights
  • Called non-agency collateral of $474 million UPB(5)

• Residential Loans and Properties
  • Priced one securitization representing approximately $500 million UPB of collateral
  • Acquired $196 million of Non-QM and Investor Loans
  • Grew single-family rental portfolio by approximately 675 units

• First Quarter 2022 Commentary(6)
  • Estimated Q1’22 Funded Origination Volume of approximately $25 billion to $30 billion UPB(7)
  • Estimated Q1’22 Servicing Portfolio UPB of approximately $490 billion to $500 billion UPB(7)

(1)

 

Per common share calculations for both GAAP Net Income and Core Earnings are based on 485,381,890 and 482,282,695 weighted average diluted shares for the quarter ended December 31, 2021 and September 30, 2021, respectively. Per common share calculations for both GAAP Net Income and Core Earnings are based on 467,665,006 and 415,513,187 weighted average diluted shares for the year ended December 31, 2021 and 2020, respectively. Per share calculations of Book Value are based on 466,758,266 and 414,744,518 basic shares outstanding as of December 31, 2021 and 2020, respectively.

 

 

 

(2)

 

 

Core Earnings is a non-GAAP financial 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.

 

 

 

(3)

 

Includes noncontrolling interests.

 

 

 

(4)

 

Includes excess and full MSRs.

 

 

 

(5)

 

Call rights UPB estimated as of December 31, 2021. The UPB of the loans relating to our call rights may be materially lower than the estimates in this 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 or 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.

 

 

 

(6)

 

Based on management’s current views and estimates, and actual results may vary materially.

 

 

 

(7)

 

Q1’22 estimates for Funded Origination Volume reflect origination activity based on estimated full quarter production volumes for the first quarter 2022. Q1’22 estimates for Servicing Portfolio reflect servicing portfolio based on quarter-end (3/31/22) estimated portfolio size.

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 Tuesday, February 8, 2022 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 1-833-974-2382 (from within the U.S.) or 1-412-317-5787 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “New Residential Fourth Quarter and Full Year 2021 Earnings Call.” In addition, participants are encouraged to pre-register for the conference call at https://dpregister.com/sreg/10163201/f0d676f592.

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 Tuesday, February 15, 2022 by dialing 1-877-344-7529 (from within the U.S.) or 1-412-317-0088 (from outside of the U.S.); please reference access code “5397345.”

Consolidated Statements of Income (Unaudited)

($ in thousands, except share and per share data)

 

 

Three Months Ended

 

Year Ended December 31,

 

December 31, 2021

 

September 30, 2021

 

2021

 

2020

Revenues

 

 

 

 

 

 

 

Servicing fee revenue, net and interest income from MSR financing receivables

$

464,200

 

 

$

390,893

 

 

$

1,559,554

 

 

$

1,642,272

 

Change in fair value of MSRs and MSR financing receivables (including amortization of $(267,880), $(287,318), $(1,192,646) and $(1,583,628), respectively)

 

(154,021

)

 

 

(195,623

)

 

 

(575,353

)

 

 

(2,168,909

)

Servicing revenue, net

 

310,179

 

 

 

195,270

 

 

 

984,201

 

 

 

(526,637

)

Interest income

 

217,555

 

 

 

190,633

 

 

 

810,896

 

 

 

794,965

 

Gain on originated mortgage loans, held-for-sale, net

 

569,815

 

 

 

566,761

 

 

 

1,826,909

 

 

 

1,399,092

 

 

 

1,097,549

 

 

 

952,664

 

 

 

3,622,006

 

 

 

1,667,420

 

Expenses

 

 

 

 

 

 

 

Interest expense and warehouse line fees

 

141,936

 

 

 

129,928

 

 

 

497,308

 

 

 

584,469

 

General and administrative expenses

 

289,861

 

 

 

237,319

 

 

 

864,028

 

 

 

548,441

 

Compensation and benefits

 

441,891

 

 

 

324,545

 

 

 

1,159,810

 

 

 

571,646

 

Management fee to affiliate

 

25,772

 

 

 

24,315

 

 

 

95,926

 

 

 

89,134

 

 

 

899,460

 

 

 

716,107

 

 

 

2,617,072

 

 

 

1,793,690

 

Other income (loss)

 

 

 

 

 

 

 

Change in fair value of investments

 

10,499

 

 

 

11,112

 

 

 

11,723

 

 

 

(148,758

)

Gain (loss) on settlement of investments, net

 

(45,642

)

 

 

(98,317

)

 

 

(234,561

)

 

 

(930,131

)

Other income (loss), net

 

54,271

 

 

 

59,266

 

 

 

133,968

 

 

 

(11,997

)

 

 

19,128

 

 

 

(27,939

)

 

 

(88,870

)

 

 

(1,090,886

)

Impairment

 

 

 

 

 

 

 

Provision (reversal) for credit losses on securities

 

(181

)

 

 

(2,370

)

 

 

(5,201

)

 

 

13,404

 

Valuation and credit loss provision (reversal) on loans and real estate owned

 

74

 

 

 

8,748

 

 

 

(42,543

)

 

 

110,208

 

 

 

(107

)

 

 

6,378

 

 

 

(47,744

)

 

 

123,612

 

Income (loss) before income taxes

 

217,324

 

 

 

202,240

 

 

 

963,808

 

 

 

(1,340,768

)

Income tax expense (benefit)

 

29,485

 

 

 

31,559

 

 

 

158,226

 

 

 

16,916

 

Net income (loss)

$

187,839

 

 

$

170,681

 

 

$

805,582

 

 

$

(1,357,684

)

Noncontrolling interests in income (loss) of consolidated subsidiaries

 

4,908

 

 

 

9,001

 

 

 

33,356

 

 

 

52,674

 

Dividends on preferred stock

 

22,495

 

 

 

15,533

 

 

 

66,744

 

 

 

54,295

 

Net income (loss) attributable to common stockholders

$

160,436

 

 

$

146,147

 

 

$

705,482

 

 

$

(1,464,653

)

 

 

 

 

 

 

 

 

Net income (loss) per share of common stock

 

 

 

 

 

 

 

Basic

$

0.34

 

 

$

0.31

 

 

$

1.56

 

 

$

(3.52

)

Diluted

$

0.33

 

 

$

0.30

 

 

$

1.51

 

 

$

(3.52

)

Weighted average number of shares of common stock outstanding

 

 

 

 

 

 

 

Basic

 

466,680,724

 

 

 

466,579,920

 

 

 

451,276,742

 

 

 

415,513,187

 

Diluted

 

485,381,890

 

 

 

482,282,695

 

 

 

467,665,006

 

 

 

415,513,187

 

 

 

 

 

 

 

 

 

Dividends declared per share of common stock

$

0.25

 

 

$

0.25

 

 

$

0.90

 

 

$

0.50

 

Consolidated Balance Sheets

($ in thousands, except share data)

 

 

December 31, 2021 (Unaudited)

 

December 31, 2020

Assets

 

 

 

Excess mortgage servicing rights, at fair value

$

344,947

 

 

$

410,855

 

Mortgage servicing rights and mortgage servicing rights financing receivables, at fair value

 

6,858,803

 

 

 

4,585,841

 

Servicer advance investments, at fair value

 

421,807

 

 

 

538,056

 

Real estate and other securities

 

9,396,539

 

 

 

14,244,558

 

Residential loans and variable interest entity consumer loans held-for-investment, at fair value

 

1,077,224

 

 

 

1,359,754

 

Residential mortgage loans, held-for-sale ($11,214,924 and $4,705,816 at fair value, respectively)

 

11,347,845

 

 

 

5,215,703

 

Mortgage loans receivable, at fair value

 

1,515,762

 

 

 

—

 

Residential mortgage loans subject to repurchase

 

1,787,314

 

 

 

1,452,005

 

Cash and cash equivalents

 

1,332,575

 

 

 

944,854

 

Restricted cash

 

195,867

 

 

 

135,619

 

Servicer advances receivable

 

2,855,148

 

 

 

3,002,267

 

Receivable for investments sold

 

—

 

 

 

4,180

 

Other assets

 

2,608,359

 

 

 

1,358,422

 

 

$

39,742,190

 

 

$

33,252,114

 

Liabilities and Equity

 

 

 

Liabilities

 

 

 

Secured financing agreements

$

20,592,884

 

 

$

17,547,680

 

Secured notes and bonds payable ($511,107 and $1,662,852 at fair value, respectively)

 

8,644,810

 

 

 

7,644,195

 

Residential mortgage loan repurchase liability

 

1,787,314

 

 

 

1,452,005

 

Unsecured senior notes, net of issuance costs

 

543,293

 

 

 

541,516

 

Payable for investments purchased

 

—

 

 

 

154

 

Due to affiliates

 

17,819

 

 

 

9,450

 

Dividends payable

 

127,922

 

 

 

90,128

 

Accrued expenses and other liabilities

 

1,358,768

 

 

 

537,302

 

 

 

33,072,810

 

 

 

27,822,430

 

Commitments and Contingencies

 

 

 

 

 

 

 

Equity

 

 

 

Preferred stock, $0.01 par value, 100,000,000 shares authorized, 52,210,000 and 33,610,000 issued and outstanding, $1,305,250 and $840,250 aggregate liquidation preference, respectively

 

1,262,481

 

 

 

812,992

 

Common stock, $0.01 par value, 2,000,000,000 shares authorized, 466,758,266 and 414,744,518 issued and outstanding, respectively

 

4,669

 

 

 

4,148

 

Additional paid-in capital

 

6,059,671

 

 

 

5,547,108

 

Retained earnings (accumulated deficit)

 

(813,042

)

 

 

(1,108,929

)

Accumulated other comprehensive income

 

90,253

 

 

 

65,697

 

Total New Residential stockholders’ equity

 

6,604,032

 

 

 

5,321,016

 

Noncontrolling interests in equity of consolidated subsidiaries

 

65,348

 

 

 

108,668

 

Total equity

 

6,669,380

 

 

 

5,429,684

 

 

$

39,742,190

 

 

$

33,252,114

 

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 on investments, including any impairment or reserve for expected credit losses and (v) income from the Company’s 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.

Beginning January 1, 2020, the Company’s investments in consumer loans are accounted for under the fair value option. Core earnings adjusts earnings on consumer loans to a level yield to present income recognition across the consumer loan portfolio in the manner in which it is economically earned, to 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, and the consolidation 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.

Through its wholly owned subsidiaries, the Company 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 Origination and Servicing 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.

Core earnings includes results from operating companies with the exception of the unrealized gains or losses due to changes in valuation inputs and assumptions on MSRs, net of unrealized gains and losses on hedged MSRs, and non-capitalized transaction-related expenses.

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 and reserves 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 and reserves for expected credit losses), (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.

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 (dollars in thousands, except share and per share data):

 

Three Months Ended

 

Year Ended December 31,

 

December 31, 2021

 

September 30, 2021

 

2021

 

2020

Net income (loss) attributable to common stockholders

$

160,436

 

 

$

146,147

 

 

$

705,482

 

 

$

(1,464,653

)

Adjustments for Non-Core Earnings:

 

 

 

 

 

 

 

Impairment

 

(107

)

 

 

6,378

 

 

 

(47,744

)

 

 

123,612

 

Change in fair value of investments

 

(124,356

)

 

 

(116,241

)

 

 

(614,782

)

 

 

743,239

 

(Gain) loss on settlement of investments, net

 

53,933

 

 

 

144,690

 

 

 

350,170

 

 

 

947,317

 

Other (income) loss, net

 

28,416

 

 

 

(21,007

)

 

 

45,974

 

 

 

132,740

 

Other income and impairment attributable to noncontrolling interests

 

(3,297

)

 

 

(2,071

)

 

 

(11,352

)

 

 

(5,585

)

Non-capitalized transaction-related expenses

 

16,735

 

 

 

15,109

 

 

 

52,372

 

 

 

56,522

 

Preferred stock management fee to affiliate

 

4,734

 

 

 

3,281

 

 

 

14,111

 

 

 

11,440

 

Deferred taxes

 

31,674

 

 

 

27,331

 

 

 

151,200

 

 

 

15,029

 

Interest income on residential mortgage loans, held-for-sale

 

23,175

 

 

 

6,153

 

 

 

43,971

 

 

 

37,246

 

Adjust consumer loans to level yield

 

—

 

 

 

—

 

 

 

—

 

 

 

(1,147

)

Core earnings of equity method investees:

 

 

 

 

 

 

 

Excess mortgage servicing rights

 

532

 

 

 

127

 

 

 

3,772

 

 

 

11,415

 

Core earnings

$

191,875

 

 

$

209,897

 

 

$

693,174

 

 

$

607,175

 

 

 

 

 

 

 

 

 

Net income (loss) per diluted share

$

0.33

 

 

$

0.30

 

 

$

1.51

 

 

$

(3.52

)

Core earnings per diluted share

$

0.40

 

 

$

0.44

 

 

$

1.48

 

 

$

1.46

 

 

 

 

 

 

 

 

 

Weighted average number of shares of common stock outstanding, diluted

 

485,381,890

 

 

 

482,282,695

 

 

 

467,665,006

 

 

 

415,513,187

 

SEGMENT INFORMATION

During the fourth quarter of 2021, the Mortgage Loans Receivable segment was added to reflect Genesis and consists of a platform that originates construction, renovation and bridge loans.

 

 

Origination and Servicing

 

Residential Securities, Properties and Loans

 

 

 

 

 

 

Fourth Quarter 2021

 

Origination

 

Servicing

 

MSRs & Servicer Advances

 

Residential Securities & Call Rights

 

Properties and Residential Loans

 

Mortgage Loans Receivable

 

Corporate & Other

 

Total

Servicing fee revenue, net and interest income from MSRs and MSR financing receivables

 

$

15,548

 

$

329,745

 

 

$

118,907

 

 

$

—

 

 

$

—

 

 

$

—

 

$

—

 

 

$

464,200

 

Change in fair value of MSRs and MSR financing receivables

 

 

—

 

 

(109,009

)

 

 

(45,012

)

 

 

—

 

 

 

—

 

 

 

—

 

 

—

 

 

 

(154,021

)

Servicing revenue, net

 

 

15,548

 

 

220,736

 

 

 

73,895

 

 

 

—

 

 

 

—

 

 

 

—

 

 

—

 

 

 

310,179

 

Interest income

 

 

79,087

 

 

7,169

 

 

 

13,195

 

 

 

53,690

 

 

 

32,551

 

 

 

4,219

 

 

27,644

 

 

 

217,555

 

Gain on originated mortgage loans, held-for- sale, net

 

 

540,662

 

 

48,661

 

 

 

(1,186

)

 

 

(15,158

)

 

 

(3,164

)

 

 

—

 

 

—

 

 

 

569,815

 

Total revenues

 

 

635,297

 

 

276,566

 

 

 

85,904

 

 

 

38,532

 

 

 

29,387

 

 

 

4,219

 

 

27,644

 

 

 

1,097,549

 

Interest expense

 

 

46,595

 

 

31,756

 

 

 

23,573

 

 

 

8,322

 

 

 

17,854

 

 

 

1,000

 

 

12,836

 

 

 

141,936

 

G&A and other

 

 

488,993

 

 

114,843

 

 

 

88,327

 

 

 

677

 

 

 

27,822

 

 

 

1,802

 

 

35,060

 

 

 

757,524

 

Total operating expenses

 

 

535,588

 

 

146,599

 

 

 

111,900

 

 

 

8,999

 

 

 

45,676

 

 

 

2,802

 

 

47,896

 

 

 

899,460

 

Change in fair value of investments

 

 

—

 

 

—

 

 

 

(3,556

)

 

 

20,076

 

 

 

774

 

 

 

—

 

 

(6,795

)

 

 

10,499

 

Gain (loss) on settlement of investments, net

 

 

—

 

 

(2,146

)

 

 

(21,636

)

 

 

(19,980

)

 

 

(2,056

)

 

 

—

 

 

176

 

 

 

(45,642

)

Other income (loss), net

 

 

1,780

 

 

(339

)

 

 

22,464

 

 

 

—

 

 

 

30,001

 

 

 

—

 

 

365

 

 

 

54,271

 

Total other income (loss)

 

 

1,780

 

 

(2,485

)

 

 

(2,728

)

 

 

96

 

 

 

28,719

 

 

 

—

 

 

(6,254

)

 

 

19,128

 

Impairment charges (reversals)

 

 

—

 

 

—

 

 

 

—

 

 

 

(181

)

 

 

74

 

 

 

—

 

 

—

 

 

 

(107

)

Income (loss) before income taxes

 

 

101,489

 

 

127,482

 

 

 

(28,724

)

 

 

29,810

 

 

 

12,356

 

 

 

1,417

 

 

(26,506

)

 

 

217,324

 

Income tax expense (benefit)

 

 

27,551

 

 

2,463

 

 

 

(8,786

)

 

 

—

 

 

 

8,253

 

 

 

—

 

 

4

 

 

 

29,485

 

Net income (loss)

 

 

73,938

 

 

125,019

 

 

 

(19,938

)

 

 

29,810

 

 

 

4,103

 

 

 

1,417

 

 

(26,510

)

 

 

187,839

 

Noncontrolling interests in income (loss) of consolidated subsidiaries

 

 

1,516

 

 

—

 

 

 

(1,003

)

 

 

—

 

 

 

—

 

 

 

—

 

 

4,395

 

 

 

4,908

 

Dividends on preferred stock

 

 

—

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

22,495

 

 

 

22,495

 

Net income (loss) attributable to common stockholders

 

$

72,422

 

$

125,019

 

 

$

(18,935

)

 

$

29,810

 

 

$

4,103

 

 

$

1,417

 

$

(53,400

)

 

$

160,436

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

10,431,260

 

$

8,526,485

 

 

$

5,023,734

 

 

$

9,998,749

 

 

$

3,227,445

 

 

$

1,683,761

 

$

850,756

 

 

$

39,742,190

 

Tot New Residential stockholder’s equity

 

$

1,738,293

 

$

2,071,873

 

 

$

1,269,681

 

 

$

951,449

 

 

$

607,492

 

 

$

422,560

 

$

(457,316

)

 

$

6,604,032

 

 

 

Origination and Servicing

 

Residential Securities, Properties and Loans

 

 

 

 

 

 

Third Quarter 2021

 

Origination

 

Servicing

 

MSRs & Servicer Advances

 

Residential Securities & Call Rights

 

Properties and Residential Loans

 

Mortgage Loans Receivable

 

Corporate & Other

 

Total

Servicing fee revenue, net and interest income from MSRs and MSR financing receivables

 

$

(6,451

)

 

$

257,520

 

 

$

139,824

 

 

$

—

 

 

$

—

 

 

$

—

 

$

—

 

 

$

390,893

 

Change in fair value of MSRs and MSR financing receivables

 

 

—

 

 

 

(140,247

)

 

 

(55,376

)

 

 

—

 

 

 

—

 

 

 

—

 

 

—

 

 

 

(195,623

)

Servicing revenue, net

 

 

(6,451

)

 

 

117,273

 

 

 

84,448

 

 

 

—

 

 

 

—

 

 

 

—

 

 

—

 

 

 

195,270

 

Interest income

 

 

54,851

 

 

 

(2,729

)

 

 

11,385

 

 

 

52,489

 

 

 

37,490

 

 

 

—

 

 

37,147

 

 

 

190,633

 

Gain on originated mortgage loans, held- for-sale, net

 

 

510,740

 

 

 

28,292

 

 

 

3,437

 

 

 

15,276

 

 

 

9,016

 

 

 

—

 

 

—

 

 

 

566,761

 

Total revenues

 

 

559,140

 

 

 

142,836

 

 

 

99,270

 

 

 

67,765

 

 

 

46,506

 

 

 

—

 

 

37,147

 

 

 

952,664

 

Interest expense

 

 

37,775

 

 

 

24,198

 

 

 

26,500

 

 

 

9,365

 

 

 

19,680

 

 

 

—

 

 

12,410

 

 

 

129,928

 

G&A and other

 

 

344,198

 

 

 

102,602

 

 

 

80,175

 

 

 

1,753

 

 

 

23,901

 

 

 

—

 

 

33,550

 

 

 

586,179

 

Total operating expenses

 

 

381,973

 

 

 

126,800

 

 

 

106,675

 

 

 

11,118

 

 

 

43,581

 

 

 

—

 

 

45,960

 

 

 

716,107

 

Change in fair value of investments

 

 

—

 

 

 

—

 

 

 

(7,675

)

 

 

50,927

 

 

 

(26,432

)

 

 

—

 

 

(5,708

)

 

 

11,112

 

Gain (loss) on settlement of investments, net

 

 

—

 

 

 

(989

)

 

 

(1,295

)

 

 

(130,066

)

 

 

34,033

 

 

 

—

 

 

—

 

 

 

(98,317

)

Other income (loss), net

 

 

368

 

 

 

(11

)

 

 

41,848

 

 

 

—

 

 

 

17,641

 

 

 

—

 

 

(580

)

 

 

59,266

 

Total other income (loss)

 

 

368

 

 

 

(1,000

)

 

 

32,878

 

 

 

(79,139

)

 

 

25,242

 

 

 

—

 

 

(6,288

)

 

 

(27,939

)

Impairment charges (reversals)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(2,370

)

 

 

8,748

 

 

 

—

 

 

—

 

 

 

6,378

 

Income (loss) before income taxes

 

 

177,535

 

 

 

15,036

 

 

 

25,473

 

 

 

(20,122

)

 

 

19,419

 

 

 

—

 

 

(15,101

)

 

 

202,240

 

Income tax expense (benefit)

 

 

32,322

 

 

 

(2,081

)

 

 

(9,416

)

 

 

—

 

 

 

10,735

 

 

 

—

 

 

(1

)

 

 

31,559

 

Net income (loss)

 

 

145,213

 

 

 

17,117

 

 

 

34,889

 

 

 

(20,122

)

 

 

8,684

 

 

 

—

 

 

(15,100

)

 

 

170,681

 

Noncontrolling interests in income (loss) of consolidated subsidiaries

 

 

3,032

 

 

 

—

 

 

 

(280

)

 

 

—

 

 

 

—

 

 

 

—

 

 

6,249

 

 

 

9,001

 

Dividends on preferred stock

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

15,533

 

 

 

15,533

 

Net income (loss) attributable to common stockholders

 

$

142,181

 

 

$

17,117

 

 

$

35,169

 

 

$

(20,122

)

 

$

8,684

 

 

$

—

 

$

(36,882

)

 

$

146,147

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

14,013,826

 

 

$

7,634,582

 

 

$

5,447,475

 

 

$

10,529,755

 

 

$

3,091,940

 

 

$

—

 

$

886,537

 

 

$

41,604,115

 

Tot New Residential stockholder’s equity

 

$

2,024,403

 

 

$

2,043,319

 

 

$

1,546,761

 

 

$

872,295

 

 

$

516,782

 

 

$

—

 

$

(447,470

)

 

$

6,556,090

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain information in this press release constitutes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, our ability to benefit from the current rate environment to help drive earnings and book value higher, ability to successfully integrate the businesses and realize the anticipated benefits of the Caliber and Genesis acquisitions including synergies, our estimated first quarter 2022 Funded Origination Value and Servicing Portfolio UPB, and ability to generate and drive earnings for our shareholders. 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 most recent 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. The Company’s mission is to generate attractive risk-adjusted returns in all interest rate environments through a complementary portfolio of investments and operating businesses. Since inception in 2013, New Residential has delivered over $3.9 billion in dividends to shareholders. New Residential’s investment portfolio is composed of mortgage servicing related assets (full and excess MSRs and servicer advances), residential securities (and associated called rights) and loans (including single family rental), and consumer loans. New Residential’s investments in operating entities include leading origination and servicing platforms through wholly-owned subsidiaries, Newrez LLC and Caliber Home Loans, Inc., as well as investments in affiliated businesses that provide mortgage related services. New Residential is organized and conducts its operations to qualify as a real estate investment trust (REIT) for federal income tax purposes and 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/20220208005600/en/

Investor Relations IR@NewResi.com