This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

New Residential Announces First Quarter 2014 Results

Stocks in this article: NRZ

New Residential Investment Corp. (NYSE:NRZ; “New Residential” or the “Company”) today reported the following information for the quarter ended March 31, 2014:

FIRST QUARTER FINANCIAL HIGHLIGHTS :

  • GAAP Income of $49 million, or $0.19 per diluted share
  • Core Earnings of $42 million, or $0.16 per diluted share
  • Common Dividend of $44 million, or $0.175 per share
       

 

Q1 2014 Q4 2013
Summary Operating Results:
GAAP Income $49 million $81 million
GAAP Income per Diluted Share $0.19 $0.31
 
Non-GAAP Results:
Core Earnings* $42 million $37 million
Core Earnings per Diluted Share* $0.16 $0.14

*For a reconciliation of GAAP Income to Core Earnings, please refer to the Reconciliation of Core Earnings below.

Highlights for the quarter ended March 31, 2014 :

  • Excess Mortgage Servicing Rights (“Excess MSRs”) – During the quarter, New Residential invested $19 million to fund previously committed interests in pools of Excess MSRs related to $8 billion UPB of non-Agency residential mortgage loans. Returns on New Residential’s existing Excess MSR portfolio remain strong and have outperformed expectations. The Company has received $230 million of cash flow to date and still expects to receive approximately $1.2 billion in the future, although actual results may differ.
  • Servicer Advances – As of the end of Q1, a joint venture formed by New Residential and co-investors (the “Buyer”) acquired or agreed to acquire $6.3 billion of advances from Nationstar Mortgage Holdings Inc. (“Nationstar”). To date, returns on these investments have outperformed the Buyer’s initial projections. Advance balances have decreased by $1.8 billion, versus the Buyer’s initial projection of a $0.5 billion decline, and the advance to UPB ratio has declined 1.4%, versus the Buyer’s initial estimate of a 0.3% decline. Furthermore, the Buyer closed on two financing facilities totaling $2.9 billion, one during the quarter and another subsequent to quarter end. Both facilities improved upon prior financing terms, with a loan-to-value of 94% and an average cost of funds of approximately 2.5%. Given the outperformance and improved financing terms, the Buyer’s projected lifetime IRR was revised to 20% from the initial target of 15%.
  • Non-Performing Loans (“NPLs”) – New Residential acquired $72 million UPB of NPLs during the quarter, bringing the total portfolio to $229 million UPB. Actual results on the existing portfolio to date have exceeded New Residential’s expectations. In the first quarter alone, the portfolio had 50 liquidations, which represents an implied 24% cash-on-cash yield, although the lifetime yield may differ.
  • Non-Agency RMBS – Through a transaction that occurred during the quarter, New Residential purchased approximately $625 million current face amount of Non-Agency RMBS for approximately $553 million.

Highlights subsequent to March 31, 2014:

  • $175 Million Equity Offering On April 25, 2014, New Residential priced its first public offering of 25,000,000 shares of its common stock for gross proceeds of approximately $152.5 million, before deducting underwriting costs and expenses. Including the exercised overallotment option of 3,750,000 shares of common stock, the gross proceeds totaled approximately $175.4 million. The net proceeds from the offering will be used for general corporate purposes, including making a variety of investments, which may include, but are not limited to, investments in Excess MSRs, servicer advances, real estate securities and real estate related loans.
  • Excess Mortgage Servicing Rights (“Excess MSRs”) On May 12, 2014, New Residential invested $34 million to acquire an interest in Excess MSRs related to $13 billion UPB of residential mortgage loans.
  • Servicer Advances – On May 2, 2014, the Buyer received $86 million from New Residential to fund the purchase of $618 million of new servicer advances.
  • Non-Performing Loans (“NPLs”) – Subsequent to quarter end, New Residential agreed on the purchase prices for two separate pools of NPLs with $618 million UPB in total. New Residential expects to complete these investments in the second quarter, although there can be no assurance that these investments will be completed in such timeframe or at all.

ADDITIONAL INFORMATION

For additional information that management believes to be useful for investors, please refer to the 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 Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, which are available on the Company’s website ( www.newresi.com).

EARNINGS CONFERENCE CALL

New Residential’s management will host a conference call on Wednesday, May 14, 2014 at 10:00 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 1-866-393-1506 (from within the U.S.) or 1-706-634-0623 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “New Residential First Quarter 2014 Earnings Call.”

1 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,805.41 +127.51 0.76%
S&P 500 1,964.58 +13.76 0.71%
NASDAQ 4,483.7150 +30.9230 0.69%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs