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Now, I’d like to turn the call over to Ken.Kenneth Riis Thanks, Cameron. Thank you for joining our fourth quarter call today. Today I want to talk about our fourth quarter and full year operating results. But before I get into that, one housekeeping thing I want to touch upon is we're in the process of finalizing a supplement that we're going to be adding to our website. We think that'll be done in the next week or so and will be posted on our website. The goal of this is to give good transparency into our business and how we make our money. And I think it would be helpful for all our investors. So look for that. Hopefully it'll be done in the next week or so. Relating the full year and fourth quarter, we had a very good year. If you look at our business, we primarily invest in two distinct areas. First, real estate, securities and loans and real estate debt. And second, a new focus of ours is investing in excess MSRs. Last year was transformational for us as we stabilized operations and reinstated our dividends. In the second quarter, we paid a $0.10 dividend. In the third and fourth quarter increased that to $0.15. In 2011, core earnings were $118 million or $1.44 per share. And in the fourth quarter core earnings were $32 million or $0.30 a share. Net cash flow in the fourth quarter net of preferred dividends was $18 million versus our common dividend of $15.8 million or $0.15 a share. Last year we raised $213 million of common equity in March and September. We invested $193 million of that capital at just under a 20% return. Also in December 2011, we made our first investment in excess MSRs and we expect that to be an increased focus of ours going forward.
Newcastle's historical business model has been focused on investing in real estate debt, financing it to term, and earning a net spread. Going forward we expect to add to this business in the excess MSR arena. Late last year, we received a private letter ruling allowing us to qualify excess MSR income as a good REIT asset and good REIT income.Excess MSRs basically are the mortgage servicing rights and net of a base fee you pay the servicers to perform all the servicing functions and net of the gross fee and net fee results in the excess mortgage servicing right, which is what we invest in. In the fourth quarter we generated $18 million of net cash flow and if we we're fully invested with our first MSR investment that we made in December, that number would have increased to about $20 million. Again, we paid out $0.15 or $15 million of dividends. So even with that full run rate investment for the quarter, including that plus new investments we're going to make, we see a lot of outside in our dividend and potentially – we have the potential to increase the dividend but we'll make that determination at the end of the quarter, as is the normal course with our Board. Just looking at our real estate debt portfolio, it's $3.8 billion of assets with a carrying value of $2.9 billion as of the end of the year. It's financed with $2.8 billion of match-funded debt and we earn a net spread on that business. Now I'll hand it over to Wes to talk about our excess MSR investments and the opportunity in that sector. Wes Edens Great. Thanks, Ken. Welcome, everyone. As Ken mentioned we made a significant addition to our investing plan here at Newcastle in the fourth quarter and we made an investment that totaled $44 million to acquire a 65% interest in approximately a $10 billion pool of mortgages that were from one of the GSEs.
Earlier in the year we applied to the IRS, as Ken said, for a private letter ruling to clarify that the income from this investment would be a good REIT investment. We received that ruling, which we think is significant and it allows us then to really proceed with this as an investment component of our plan at full speed ahead.Read the rest of this transcript for free on seekingalpha.com