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Nationstar Mortgage Announces Second Quarter 2012 Financial Results

Stocks in this article: NSM

“We continued to build upon our success from the first quarter and delivered another solid quarter of operating and financial results. Our ability to identify and acquire accretive portfolios demonstrates that we have the right strategy and business model to capitalize on the realignment of the $10 trillion mortgage industry,” said Jay Bray, Chief Executive Officer of Nationstar. “In the quarter, we executed on key strategic initiatives that we expect will deliver long-term value to customers and shareholders. These initiatives include the acquisition of the Aurora servicing portfolio, the launch of the preferred lender program with KB Home, and being named the ‘stalking horse’ bidder for the ResCap portfolio.”

“Our primary focus remains on improving asset performance in our portfolio by reducing delinquencies and defaults,” said Mr. Bray. “As we continue to grow the platform through strategic portfolio acquisitions, we remain committed to providing best-in-class service to our customers, recapturing value for mortgage credit owners, and creating value for our shareholders.”

Chief Financial Officer David Hisey said, “We had a strong quarter of financial results driven by the expansion of our servicing portfolio and record origination volume. On a comparative basis, our earnings were equal quarter-over-quarter, demonstrating our continued progress. We have multiple levers in place to support our continued growth in a capital-light manner. We believe we have the team, model, process and infrastructure necessary to capitalize on the growth opportunities in front of us.”

Business Segments

Servicing

Mortgage servicing fee income, before fair value adjustments, increased 25% to $109.2 million in second quarter 2012 compared to $87.5 million in the prior quarter. Total mortgage servicing fee income of $91.9 million was flat quarter-over-quarter primarily due to a fair value adjustment to mortgage servicing rights in the current quarter. In the current quarter, the servicing segment pre-tax loss was $4.7 million, versus $19.6 million of pre-tax income in the prior quarter and $3.4 million in the year-ago quarter.

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