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TheStreet Open House

Newcastle Announces Fourth Quarter & Full Year 2012 Results

During the quarter, the investments generated $2.1 million of total cash flow, $0.4 million more than projected.

  • Average occupancy rate was 87.4%, compared to 86.0% in the Company’s initial projection
  • Average monthly revenue per occupied unit was $3,845, compared to $3,874 initially projected
  • Total operating expenses were $6.9 million, compared to $7.1 million initially projected

INVESTMENT PORTFOLIO

The following table describes the investment portfolio as of December 31, 2012 ($ in millions):

                                 
Weighted
Face Basis % of Carry Value Number of Average
Amount $     Amount $ (6)     Basis       Amount $     Investments     Credit (7)     Life (years) (8)
I. Residential Servicing & Securities
Excess MSRs Investments $ 245 $ 236 7.4 % $ 245 5 -- 5.4
Non-Agency RMBS (1)   434       275     8.7 %   290 29 CC 6.8
Total Residential Servicing & Securities Assets 679 511 16.1 % 535 6.3
 
II. Commercial Real Estate Debt & Other Assets
Commercial Assets
CMBS 475 337 10.6 % 376 76 BB- 3.2
Mezzanine Loans 528 443 13.9 % 443 17 77% 2.2
B-Notes 171 162 5.1 % 162 6 68% 2.1
Whole Loans 30 30 0.9 % 30 3 48% 1.1
Third-Party CDO Securities (2) 96 67 2.1 % 71 5 BB 3.3
Other Investments (3)   25       25     0.8. %   25 1 -- --
Total Commercial Assets 1,325 1,064 33.4 % 1,107 2.6
 
Residential Assets
MH and Residential Loans 332 290 9.1 % 290 8,881 705 6.1
Subprime Securities 124 47 1.5 % 66 40 CCC 5.0
Real Estate ABS   10       2     0.1 %   1 3 CCC- 4.7
466 339 10.7 % 357 5.8
 
FNMA/FHLMC Securities   769       811     25.5 %   813 58 AAA 3.5
Total Residential Assets 1,235 1,150 36.2 % 1,170 4.4
 
Corporate Assets
REIT Debt 63 62 2.0 % 66 10 BBB- 1.8
Corporate Bank Loans   392       209     6.6 %   209 7 CC 3.6
Total Corporate Assets 455 271 8.6 % 275 3.3
 
Senior Living Property Investments (4) 188 182 5.7 % 182 12 -- --
                 
Total Commercial Real Estate Debt & Other Assets   3,203       2,667     83.9 %   2,734 3.4
                 
Total/Weighted Average (5) $ 3,882     $ 3,178     100.0 % $ 3,269 4.0
 

(1)

  Represents Non-Agency RMBS purchased outside of the Company’s CDOs since April 2012.

(2)

Represents non-consolidated CDO securities, excluding eight securities with a zero value that had an aggregate face amount of $107 million.

(3)

Relates to an equity investment in a REO property.

(4)

Face amount of Senior Living Property Investments represents the gross carrying amount, which excludes accumulated depreciation and amortization.

(5)

Excludes an investment in real estate of $7 million and loans subject to a call option with a face amount of $406 million.

(6)

Net of impairment.

(7)

Credit represents the weighted average of minimum ratings for rated assets, the Loan to Value ratio (based on the appraised value at the time of purchase or refinancing) for non-rated commercial assets, or the FICO score for non-rated residential assets and an implied and assumed AAA rating for FNMA/FHLMC securities. Ratings provided herein were determined by third-party rating agencies as of a particular date, may not be current and are subject to change at any time.

(8)

Weighted average life is an estimate based on the timing of expected principal reduction on the asset.
 

ADDITIONAL INFORMATION

For additional information that management believes to be useful for investors, please refer to the “Quarterly Supplement – Fourth Quarter 2012” presentation posted to the Investor Relations section of Newcastle’s website, www.newcastleinv.com. For consolidated investment portfolio information, please refer to the Company’s Quarterly Report on Form 10-Q , which are also available on the Company’s website, www.newcastleinv.com.

CONFERENCE CALL

Newcastle’s management will conduct a live conference call on Thursday, February 28, 2013 at 8:30 A.M. Eastern Time to review the financial results for the fourth quarter and full year 2012. A copy of the earnings press release is posted to the Investor Relations section of Newcastle’s website, www.newcastleinv.com.

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