• |
GAAP Net Loss of ($1,602.3) million, or ($3.86) per diluted common share(1)
|
• |
Core Earnings of $198.4 million, or $0.48 per diluted common share(1)(2)
|
• |
Common Dividend of $20.8 million, or $0.05 per common share(1)
|
• |
Book Value per common share of $10.71(1)
|
• |
$360.5 million of cash as of March 31, 2020
|
1Q 2020
|
4Q 2019
|
|||||
Summary Operating Results:
|
||||||
GAAP Net (Loss) Income per Diluted Common Share(1)
|
($3.86)
|
|
$0.51
|
|||
GAAP Net (Loss) Income
|
($1,602.3) million
|
$211.8 million
|
||||
Non-GAAP Results:
|
||||||
Core Earnings per Diluted Common Share(1)
|
$0.48
|
$0.61
|
||||
Core Earnings(2)
|
$198.4 million
|
$255.4 million
|
||||
NRZ Common Dividend:
|
||||||
Common Dividend per Share(1)
|
$0.05
|
$0.50
|
||||
Common Dividend
|
$20.8 million
|
$207.8 million
|
• |
Origination
|
o |
Segment pre-tax net income of $60.2 million
|
o |
Origination production grew to $11.4 billion in unpaid principal balance (“UPB”), up 8% QoQ and 418% YoY
|
• |
Servicing
|
o |
Segment pre-tax net income of $30.4 million
|
o |
The servicing portfolio grew to $275.8 billion in UPB, up 26% QoQ and 95% YoY
|
• |
Mortgage Servicing Rights (“MSRs”)
|
o |
MSR portfolio totaled approximately $648 billion UPB as of March 31, 2020, compared to $630 billion UPB as of December 31, 2019(6)
|
• |
Residential Securities and Call Rights
|
o |
Sold $24.9 billion of residential securities
|
o |
Called 15 deals with collateral of $487.7 million UPB(7)
|
o |
Completed one securitization of loans acquired through exercise of call rights with $545.4 million UPB of collateral
|
• |
Residential Loans
|
o |
Sold $2.0 billion of residential loans
|
o |
Completed two securitizations with total collateral of $1.5 billion UPB (one reperforming loan and one Non-Qualified Mortgage loan)
|
• |
Additional Updates Post Q1’20(8)
|
o |
$517.3 million of cash as of April 30, 2020
|
o |
Increased advance capacity by up to approximately $1.8 billion(5)
|
o |
Priced and sold a seasoned performing loan securitization with $449.4 million UPB of collateral
|
o |
Reduced overall leverage to 1.5x(9)
|
o |
Sold $1.0 billion of residential loans
|
(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.
|
(3) |
“Investment portfolio” refers to total assets less cash, restricted cash, other assets, goodwill and mortgage loans originated and compares
December 31, 2019 values of $32.6 billion to April 30, 2020 values of $12.7 billion.
|
(4) |
Unencumbered assets as of April 30, 2020 represent management’s estimates, and actual results may vary materially.
|
(5) |
Represents activity post March 31, 2020. $625 million of $1.8 billion additional capacity has been agreed upon in principle but is subject to definitive
documentation. There can be no assurance that we will complete such definitive documentation or close such financing.
|
(6) |
Includes Excess and Full MSRs.
|
(7) |
Call rights UPB estimated as of March 31, 2020. 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.
|
(8) |
Represents activity from April 1, 2020 through April 30, 2020. Based on management’s current views and estimates, and actual results may vary materially.
|
(9) |
Represents recourse leverage. Excludes non-recourse leverage including outstanding consumer debt, servicer advance debt, $56.9 million of full MSR debt, SAFT 2013-1
and MDST Trusts mortgage backed securities issued, and Shellpoint non-agency RMBS.
|
Three Months Ended
|
||||||||
March 31, 2020
(unaudited)
|
December 31, 2019
(unaudited)
|
|||||||
Interest income
|
$
|
402,373
|
$
|
463,089
|
||||
Interest expense
|
216,855
|
247,013
|
||||||
Net Interest Income
|
185,518
|
216,076
|
||||||
Impairment
|
||||||||
Provision (reversal) for credit losses on securities
|
44,149
|
3,232
|
||||||
Valuation and credit loss provision (reversal) on loans and real estate owned (“REO”)
|
100,496
|
2,361
|
||||||
144,645
|
5,593
|
|||||||
Net interest income after impairment
|
40,873
|
210,483
|
||||||
Servicing revenue, net of change in fair value of $(649,375) and $(93,036), respectively
|
(289,115
|
)
|
251,793
|
|||||
Gain on originated mortgage loans, held-for-sale, net
|
179,698
|
180,520
|
||||||
Other Income
|
||||||||
Change in fair value of investments in excess mortgage servicing rights
|
(11,024
|
)
|
(9,084
|
)
|
||||
Change in fair value of investments in excess mortgage servicing rights, equity method investees
|
(457
|
)
|
2,713
|
|||||
Change in fair value of investments in mortgage servicing rights financing receivables
|
(104,111
|
)
|
(55,823
|
)
|
||||
Change in fair value of servicer advance investments
|
(18,749
|
)
|
(5,644
|
)
|
||||
Change in fair value of investments in real estate and other securities
|
(86,792
|
)
|
(6,909
|
)
|
||||
Change in fair value of investments in residential mortgage loans
|
(265,244
|
)
|
(146,006
|
)
|
||||
Change in fair value of derivative investments
|
(39,982
|
)
|
(31,107
|
)
|
||||
Gain (loss) on settlement of investments, net
|
(799,572
|
)
|
131,073
|
|||||
Earnings from investments in consumer loans, equity method investees
|
-
|
(548
|
)
|
|||||
Other income (loss), net
|
(76,730
|
)
|
67,509
|
|||||
(1,402,661
|
)
|
(53,826
|
)
|
|||||
Operating Expenses
|
||||||||
General and administrative expenses
|
206,363
|
186,676
|
||||||
Management fee to affiliate
|
21,721
|
21,211
|
||||||
Incentive compensation to affiliate
|
-
|
42,627
|
||||||
Loan servicing expense
|
7,853
|
5,570
|
||||||
Subservicing expense
|
66,981
|
79,719
|
||||||
302,918
|
335,803
|
|||||||
(Loss) Income Before Income Taxes
|
(1,774,123
|
)
|
253,167
|
|||||
Income tax (benefit) expense
|
(166,868
|
)
|
22,786
|
|||||
Net (Loss) Income
|
$
|
(1,607,255
|
)
|
$
|
230,381
|
|||
Noncontrolling Interests in Income of Consolidated Subsidiaries
|
$
|
(16,162
|
)
|
$
|
10,658
|
|||
Dividends on Preferred Stock
|
$
|
11,222
|
$
|
7,943
|
||||
Net (Loss) Income Attributable to Common Stockholders
|
$
|
(1,602,315
|
)
|
$
|
211,780
|
|||
Net (Loss) Income Per Share of Common Stock
|
||||||||
Basic
|
$
|
(3.86
|
)
|
$
|
0.51
|
|||
Diluted
|
$
|
(3.86
|
)
|
$
|
0.51
|
|||
Weighted Average Number of Shares of Common Stock Outstanding
|
||||||||
Basic
|
415,589,155
|
415,520,780
|
||||||
Diluted
|
415,589,155
|
415,673,185
|
||||||
Dividends Declared per Share of Common Stock
|
$
|
0.05
|
$
|
0.50
|
March 31, 2020
|
December 31, 2019
|
|||||||
Assets
|
(unaudited)
|
|||||||
Investments in:
|
||||||||
Excess mortgage servicing rights (“MSRs”), at fair value
|
$
|
363,932
|
$
|
379,747
|
||||
Excess mortgage servicing rights, equity method investees, at fair value
|
119,609
|
125,596
|
||||||
Mortgage servicing rights, at fair value
|
3,934,384
|
3,967,960
|
||||||
Mortgage servicing rights financing receivables, at fair value
|
1,604,431
|
1,718,273
|
||||||
Servicer advance investments, at fair value
|
515,574
|
581,777
|
||||||
Real estate and other securities, available-for-sale (amortized cost $2,615,252 and $18,782,175 at March
31, 2020 and December 31, 2019, respectively; allowance for credit losses $44,149 at March 31, 2020)
|
2,479,603
|
19,477,728
|
||||||
Residential mortgage loans, held-for-investment (includes $824,183 and $484,443 at fair value at March
31, 2020 and December 31, 2019, respectively)
|
824,183
|
925,706
|
||||||
Residential mortgage loans, held-for-sale
|
1,264,533
|
1,429,052
|
||||||
Residential mortgage loans, held-for-sale, at fair value
|
3,283,973
|
4,613,612
|
||||||
Consumer loans, held-for-investment ($780,821 and $0 held at fair value at March 31, 2020 and December
31, 2019, respectively)
|
780,821
|
827,545
|
||||||
Cash and cash equivalents
|
360,453
|
528,737
|
||||||
Restricted cash
|
147,435
|
162,197
|
||||||
Servicer advances receivable
|
3,072,863
|
3,301,374
|
||||||
Trades receivable
|
3,293,976
|
5,256,014
|
||||||
Deferred tax asset, net
|
176,238
|
8,669
|
||||||
Other assets (includes $197,715 and $172,336 in residential mortgage loan subject to repurchase at March
31, 2020 and December 31,2019, respectively)
|
1,971,467
|
1,559,467
|
||||||
$
|
24,193,475
|
$
|
44,863,454
|
|||||
Liabilities and Equity
|
||||||||
Liabilities
|
||||||||
Repurchase agreements
|
$
|
10,814,130
|
$
|
27,916,225
|
||||
Notes and bonds payable (includes $272,292 and $659,738 at fair value at March 31, 2020 and December 31,
2019, respectively)
|
7,014,579
|
7,720,148
|
||||||
Trades payable
|
20,913
|
902,081
|
||||||
Due to affiliates
|
17,216
|
103,882
|
||||||
Dividends payable
|
28,033
|
211,732
|
||||||
Accrued expenses and other liabilities (includes $197,715 and $172,336 in residential mortgage loans
repurchase liabilities at March 31, 2020 and December 31,2019, respectively)
|
968,140
|
773,126
|
||||||
18,863,011
|
37,627,194
|
|||||||
Commitments and Contingencies
|
||||||||
Equity
|
||||||||
Preferred Stock, par value of $0.01 per share, 100,000,000 shares authorized:
|
||||||||
7.50% Series A Preferred Stock, $0.01 par value, 11,500,000 shares authorized, 6,210,000 and 6,210,000
issued and outstanding at March 31, 2020 and December 31, 2019, respectively
|
150,026
|
150,026
|
||||||
7.125% Series B Preferred Stock, $0.01 par value, 11,500,000 shares authorized, 11,300,000 and 11,300,000
issued and outstanding at March 31, 2020 and December 31, 2019, respectively
|
273,418
|
273,418
|
||||||
6.375% Series C Preferred Stock, $0.01 par value, 16,100,000 shares authorized, 16,100,000 and 0 issued
and outstanding at March 31, 2020 and December 31, 2019, respectively
|
389,548
|
-
|
||||||
Common Stock, $0.01 par value, 2,000,000,000 shares authorized, 415,649,214 and 415,520,780 issued and
outstanding at March 31, 2020 and December 31, 2019, respectively
|
4,157
|
4,156
|
||||||
Additional paid-in capital
|
5,500,308
|
5,498,226
|
||||||
Retained earnings
|
(1,059,706
|
)
|
549,733
|
|||||
Accumulated other comprehensive income (loss)
|
6,135
|
682,151
|
||||||
Total New Residential stockholders’ equity
|
5,263,886
|
7,157,710
|
||||||
Noncontrolling interests in equity of consolidated subsidiaries
|
66,578
|
78,550
|
||||||
Total Equity
|
5,330,464
|
7,236,260
|
||||||
$
|
24,193,475
|
$
|
44,863,454
|
Three Months Ended
|
||||||||
March 31,
2020
|
December 31,
2019
|
|||||||
Net (loss) income attributable to common stockholders
|
$
|
(1,602,315
|
)
|
$
|
211,780
|
|||
Adjustments for Non-Core Earnings:
|
||||||||
Impairment
|
144,645
|
5,360
|
||||||
Change in fair value of investments in mortgage servicing rights
|
504,848
|
(100,344
|
)
|
|||||
Change in fair value of servicer advance investments
|
18,749
|
5,644
|
||||||
Change in fair value of investments in real estate and other securities
|
86,792
|
6,909
|
||||||
Change in fair value of investments in residential mortgage loans
|
265,244
|
145,308
|
||||||
Change in fair value of derivative instruments
|
39,982
|
31,113
|
||||||
(Gain) loss on settlement of investments, net
|
811,471
|
(112,584
|
)
|
|||||
Other (income) loss
|
83,501
|
(51,396
|
)
|
|||||
Other Income and Impairment attributable to non-controlling interests
|
(22,279
|
)
|
(4,495
|
)
|
||||
Non-capitalized transaction-related expenses
|
16,902
|
31,984
|
||||||
Incentive compensation to affiliate
|
-
|
42,627
|
||||||
Preferred stock management fee to affiliate
|
2,295
|
1,588
|
||||||
Deferred taxes
|
(166,917
|
)
|
20,127
|
|||||
Interest income on residential mortgage loans, held-for sale
|
12,143
|
15,648
|
||||||
Adjust consumer loans to level yield
|
(515
|
)
|
355
|
|||||
Core earnings of equity method investees:
|
||||||||
Excess mortgage servicing rights
|
3,825
|
5,803
|
||||||
Core Earnings
|
$
|
198,371
|
$
|
255,427
|
||||
Net (Loss) Income Per Diluted Share
|
(3.86
|
)
|
0.51
|
|||||
Core Earnings Per Diluted Share
|
0.48
|
0.61
|
||||||
Weighted Average Number of Shares of Common Stock Outstanding, Diluted
|
415,589,155
|
415,673,185
|
Servicing and Originations
|
Residential Securities and Loans
|
|||||||||||||||||||||||||||
Originations
|
Servicing
|
MSRs &
Servicer
Advances
|
Residential
Securities &
Call Rights
|
Residential
Loans
|
Corporate
& Other
|
Total
|
||||||||||||||||||||||
Quarter Ended March 31, 2020
|
||||||||||||||||||||||||||||
Interest income
|
$
|
16,735
|
$
|
7,487
|
$
|
99,353
|
$
|
184,005
|
$
|
59,921
|
$
|
34,872
|
$
|
402,373
|
||||||||||||||
Interest expense
|
13,427
|
196
|
57,783
|
108,009
|
30,773
|
6,667
|
216,855
|
|||||||||||||||||||||
Net interest income
|
3,308
|
7,291
|
41,570
|
75,996
|
29,148
|
28,205
|
185,518
|
|||||||||||||||||||||
Impairment
|
-
|
-
|
-
|
44,149
|
100,496
|
-
|
144,645
|
|||||||||||||||||||||
Servicing revenue, net
|
(1,078
|
)
|
86,742
|
(374,779
|
)
|
-
|
-
|
-
|
(289,115
|
)
|
||||||||||||||||||
Gain on originated mortgage loans, held-for-sale, net
|
158,215
|
259
|
12,713
|
-
|
8,511
|
-
|
179,698
|
|||||||||||||||||||||
Other income (loss)
|
(16
|
)
|
499
|
(156,933
|
)
|
(966,039
|
)
|
(192,271
|
)
|
(87,901
|
)
|
(1,402,661
|
)
|
|||||||||||||||
Operating expenses
|
100,212
|
64,352
|
83,880
|
6,854
|
16,756
|
30,864
|
302,918
|
|||||||||||||||||||||
Income (Loss) Before Income Taxes
|
60,217
|
30,439
|
(561,309
|
)
|
(941,046
|
)
|
(271,864
|
)
|
(90,560
|
)
|
(1,774,123
|
)
|
||||||||||||||||
Income tax expense (benefit)
|
11,958
|
6,045
|
(109,785
|
)
|
-
|
(75,201
|
)
|
115
|
(166,868
|
)
|
||||||||||||||||||
Net Income (Loss)
|
$
|
48,259
|
$
|
24,394
|
$
|
(451,524
|
)
|
$
|
(941,046
|
)
|
$
|
(196,663
|
)
|
$
|
(90,675
|
)
|
$
|
(1,607,255
|
)
|
|||||||||
Noncontrolling interests in income (loss) of consolidated subsidiaries
|
1,283
|
-
|
(11,247
|
)
|
-
|
-
|
(6,198
|
)
|
(16,162
|
)
|
||||||||||||||||||
Dividends on Preferred Stock
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
11,222
|
$
|
11,222
|
||||||||||||||
Net income (loss) attributable to common stockholders
|
$
|
46,976
|
$
|
24,394
|
$
|
(440,277
|
)
|
$
|
(941,046
|
)
|
$
|
(196,663
|
)
|
$
|
(95,699
|
)
|
$
|
(1,602,315
|
)
|
Servicing and Originations
|
Residential Securities and Loans
|
|||||||||||||||||||||||||||
Originations
|
Servicing
|
MSRs &
Servicer
Advances
|
Residential
Securities &
Call Rights
|
Residential
Loans
|
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 consolidated subsidiaries
|
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
|