NEW YORK--(BUSINESS WIRE)--New Residential Investment Corp. (NYSE: NRZ) today reported the following information for the third quarter ended September 30, 2020:
“New Residential had a strong third quarter, bolstered by solid earnings in our Origination and Servicing segments,” said Michael Nierenberg, Chairman, Chief Executive Officer and President of New Residential. “Origination and Servicing delivered over $340 million in pre-tax earnings during the third quarter as these businesses continued to scale and capture additional market share.”
Mr. Nierenberg continued, “With rates at current lows, we believe our investment portfolio is well positioned; in particular, our MSR portfolio stands to benefit as rates rise and multiples improve. We intend to maintain high levels of cash to deploy opportunistically. Heading into the end of the year, we are confident in our ability to grow book value and generate earnings for our shareholders.”
THIRD QUARTER 2020 COMPANY HIGHLIGHTS:
- Origination
- Segment pre-tax income of $312.3 million (+72% QoQ)
- Origination production of $18.1 billion in unpaid principal balance (“UPB”) (+118% QoQ)
- Direct to Consumer production of $3.4 billion UPB (+12% QoQ)
- Servicing
- Segment pre-tax net income of $30.3 million (+24% QoQ)
- The servicing portfolio grew to $287.2 billion in UPB (+3% QoQ)
- Mortgage Servicing Rights (“MSRs”) and Servicer Advances
- MSR portfolio totaled approximately $571 billion UPB as of September 30, 2020 compared to $610 billion UPB as of June 30, 2020(3)
- Issued two MSR debt securitizations for $426 million
- Closed a new $500 million Ginnie Mae MSR and advance financing facility(4)
- Issued two servicer advance securitizations for $1.2 billion
- Servicer advance balances declined slightly to $3.4 billion from $3.5 billion as of June 30, 2020
- Residential Securities
- Purchased $5.1 billion (net face value) of agency securities
- Sold $616 million (face value) of non-agency securities
- Residential Loans
- Sold $279 million (face value) of residential loans
- Completed three securitizations with total collateral of $1.3 billion UPB (two non-performing loans and one reperforming loan)
- Financing and Leverage
- Fully refinanced 11.00% senior secured term loan with 6.25% senior unsecured corporate debt, resulting in approximately $32 million of annual savings(5)
- Refinanced SpringCastle securitization, representing $663 million of collateral
- Annualized savings of approximately $50 million from all Q3’20 refinancing activity(5)
- Overall leverage of 3.5x compared to 2.1x as of June 30, 2020(6)
- Additional Updates Post Q3’20(7)
- Issued one servicer advance securitization for $500 million
- Sold $194 million (face value) of residential loans
| (1) | Per common share calculations for both GAAP Net Income (Loss) and Core Earnings are based on 420,968,626 weighted average diluted shares during the quarter ended September 30, 2020; and 415,661,782 weighted average diluted shares during the quarter ended June 30, 2020. Per share calculations of Common Dividend are based on 415,744,518 basic shares outstanding as of September 30, 2020 and June 30, 2020. Per common share calculations for Book Value are based on 415,744,518 basic common shares outstanding as of September 30, 2020. |
| (2) | Core Earnings is a non-GAAP financial 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) | Includes excess and full MSRs. |
| (4) | Closed August 31, 2020. Upon approval from Ginnie Mae and the related lender, may be upsized to $750 million. |
| (5) | Based on management’s current views and estimates, and actual results may vary. |
| (6) | Represents recourse leverage. Excludes non-recourse leverage, including outstanding consumer debt, servicer advance debt, $37.4 million and $59.5 million of full MSR debt for September 30, 2020 and December 31, 2019 respectively, SAFT 2013-1 and MDST Trusts mortgage backed securities issued, and Shellpoint non-agency RMBS. |
| (7) | Represents activity from October 1, 2020 through October 23, 2020. Based on management’s current views and estimates, and actual results may vary. |
ADDITIONAL INFORMATION
For additional information that management believes to be useful for investors, please refer to the latest presentation posted on the Investor Relations section of the Company’s website, www.newresi.com.">www.newresi.com. For consolidated investment portfolio information, please refer to the Company’s most recent Quarterly Report on Form 10-Q or Annual Report on Form 10-K, which are available on the Company’s website, www.newresi.com.
ABOUT NEW RESIDENTIAL
New Residential is a leading provider of capital and services to the mortgage and financial services industry. The Company’s mission is to generate attractive risk-adjusted returns in all interest rate environments through a portfolio of investments and operating businesses. New Residential has built a diversified, hard-to-replicate portfolio with high-quality investment strategies that have generated returns across different interest rate environments over time. New Residential’s portfolio is composed of mortgage servicing related assets (including investments in operating entities consisting of servicing, origination, and affiliated businesses), residential securities (and associated called rights) and loans, and consumer loans. New Residential’s investments in operating entities include its mortgage origination and servicing subsidiary, NewRez, and its special servicing division, Shellpoint Mortgage Servicing, as well as investments in affiliated businesses that provide services that are complementary to the origination and servicing businesses and other portfolios of mortgage related assets. Since inception in 2013, New Residential has a proven track record of performance, growing and protecting the value of its assets while generating attractive risk-adjusted returns and delivering over $3.4 billion in dividends to shareholders. New Residential is organized and conducts its operations to qualify as a real estate investment trust (“REIT”) for federal income tax purposes. New Residential is managed by an affiliate of Fortress Investment Group LLC, a global investment management firm, and headquartered in New York City.
