001-35777
|
45-3449660
|
(Commission File Number)
|
(IRS Employer Identification No.)
|
1345 Avenue of the Americas, 45th Floor
New York, New York |
10105
|
(Address of principal executive offices)
|
(Zip Code)
|
☐
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
☐
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
☐
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
☐
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 2.02.
|
Results of Operations and Financial Condition.
|
Item 9.01
|
Financial Statements and Exhibits.
|
(d)
|
Exhibits
|
Exhibit
Number |
Description
|
|
Press release, dated October 25, 2018, issued by New Residential Investment Corp.
|
NEW RESIDENTIAL INVESTMENT CORP.
|
|
(Registrant)
|
|
/s/ Nicola Santoro, Jr.
|
|
Chief Financial Officer
|
§ |
GAAP Net Income of $185 million, or $0.54 per diluted share
|
§ |
Core Earnings of $215 million, or $0.63 per diluted share*
|
§ |
Common dividend of $170 million, or $0.50 per share
|
3Q 2018
|
2Q 2018
|
|||||||
Summary Operating Results:
|
||||||||
GAAP Net Income per Diluted Share**
|
$
|
0.54
|
$
|
0.51
|
||||
GAAP Net Income
|
$
|
185 million
|
$
|
175 million
|
||||
Non-GAAP Results:
|
||||||||
Core Earnings per Diluted Share**
|
$
|
0.63
|
$
|
0.58
|
||||
Core Earnings*
|
$
|
215 million
|
$
|
198 million
|
||||
NRZ Common Dividend:
|
||||||||
Common Dividend per Share**
|
$
|
0.50
|
$
|
0.50
|
||||
Common Dividend
|
$
|
170 million
|
$
|
170 million
|
§ |
Acquired MSRs totaling approximately $43 billion unpaid principal balance (“UPB”).
|
§ |
Executed clean-up calls on 10 seasoned, Non-Agency residential mortgage-backed securities (“RMBS”) deals with an aggregate UPB of approximately $253 million.
|
§ |
Completed a $658 million Non-Agency loan securitization.
|
§ |
Purchased $900mm face value of Legacy Non-Agency RMBS consistent with our call-rights strategy.
|
§ |
Subsequent to quarter end, New Residential successfully priced its first Non-QM securitization totaling $310 million.
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
(unaudited)
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
|||||||||||||
Interest income
|
$
|
425,524
|
$
|
397,722
|
$
|
1,212,902
|
$
|
1,162,212
|
||||||||
Interest expense
|
162,806
|
125,278
|
421,109
|
338,664
|
||||||||||||
Net Interest Income
|
262,718
|
272,444
|
791,793
|
823,548
|
||||||||||||
Impairment
|
||||||||||||||||
Other-than-temporary impairment (OTTI) on securities
|
3,889
|
1,509
|
23,190
|
8,736
|
||||||||||||
Valuation and loss provision (reversal) on loans and real estate owned (REO)
|
5,471
|
26,700
|
28,136
|
65,381
|
||||||||||||
9,360
|
28,209
|
51,326
|
74,117
|
|||||||||||||
Net interest income after impairment
|
253,358
|
244,235
|
740,467
|
749,431
|
||||||||||||
Servicing revenue, net
|
175,355
|
58,014
|
538,784
|
269,467
|
||||||||||||
Gain on sale of originated mortgage loans, net
|
45,732
|
-
|
45,732
|
-
|
||||||||||||
Other Income
|
||||||||||||||||
Change in fair value of investments in excess mortgage servicing rights
|
(4,744
|
)
|
(14,291
|
)
|
(55,711
|
)
|
(32,650
|
)
|
||||||||
Change in fair value of investments in excess mortgage servicing rights, equity method investees
|
3,396
|
2,054
|
5,624
|
6,056
|
||||||||||||
Change in fair value of investments in mortgage servicing rights financing receivables
|
(88,345
|
)
|
70,232
|
63,628
|
75,828
|
|||||||||||
Change in fair value of servicer advance investments
|
(5,353
|
)
|
10,941
|
(86,581
|
)
|
70,469
|
||||||||||
Gain (loss) on settlement of investments, net
|
(11,893
|
)
|
1,553
|
106,064
|
1,250
|
|||||||||||
Earnings from investments in consumer loans, equity method investees
|
4,555
|
6,769
|
12,343
|
12,649
|
||||||||||||
Other income (loss), net
|
19,086
|
9,887
|
39,047
|
7,696
|
||||||||||||
(83,298
|
)
|
87,145
|
84,414
|
141,298
|
||||||||||||
Operating Expenses
|
||||||||||||||||
General and administrative expenses
|
98,587
|
19,919
|
139,169
|
47,788
|
||||||||||||
Management fee to affiliate
|
15,464
|
14,187
|
46,027
|
41,447
|
||||||||||||
Incentive compensation to affiliate
|
23,848
|
19,491
|
65,169
|
72,123
|
||||||||||||
Loan servicing expense
|
11,060
|
13,690
|
33,609
|
40,068
|
||||||||||||
Subservicing expense
|
43,148
|
49,773
|
135,703
|
123,435
|
||||||||||||
192,107
|
117,060
|
419,677
|
324,861
|
|||||||||||||
Income Before Income Taxes
|
199,040
|
272,334
|
989,720
|
835,335
|
||||||||||||
Income tax expense (benefit)
|
3,563
|
32,613
|
(5,957
|
)
|
121,053
|
|||||||||||
Net Income
|
$
|
195,477
|
$
|
239,721
|
$
|
995,677
|
$
|
714,282
|
||||||||
Noncontrolling Interests in Income of Consolidated Subsidiaries
|
$
|
10,869
|
$
|
13,600
|
$
|
32,058
|
$
|
45,051
|
||||||||
Net Income Attributable to Common Stockholders
|
$
|
184,608
|
$
|
226,121
|
$
|
963,619
|
$
|
669,231
|
||||||||
Net Income Per Share of Common Stock
|
||||||||||||||||
Basic
|
$
|
0.54
|
$
|
0.74
|
$
|
2.87
|
$
|
2.23
|
||||||||
Diluted
|
$
|
0.54
|
$
|
0.73
|
$
|
2.86
|
$
|
2.21
|
||||||||
Weighted Average Number of Shares of Common Stock Outstanding
|
||||||||||||||||
Basic
|
340,044,440
|
307,361,309
|
335,615,566
|
300,511,550
|
||||||||||||
Diluted
|
340,868,403
|
309,207,345
|
337,078,824
|
302,357,147
|
||||||||||||
Dividends Declared per Share of Common Stock
|
$
|
0.50
|
$
|
0.50
|
$
|
1.50
|
$
|
1.48
|
||||||||
September 30, 2018
|
December 31, 2017
|
|||||||
Assets
|
(unaudited)
|
|||||||
Investments in:
|
||||||||
Excess mortgage servicing rights, at fair value
|
$
|
467,061
|
$
|
1,173,713
|
||||
Excess mortgage servicing rights, equity method investees, at fair value
|
154,939
|
171,765
|
||||||
Mortgage servicing rights, at fair value
|
2,872,004
|
1,735,504
|
||||||
Mortgage servicing rights financing receivables, at fair value
|
1,681,072
|
598,728
|
||||||
Servicer advance investments, at fair value
|
799,936
|
4,027,379
|
||||||
Real estate and other securities, available-for-sale
|
11,650,257
|
8,071,140
|
||||||
Residential mortgage loans, held-for-investment (includes $123,606 and $0 at fair value at September 30, 2018 and December 31, 2017, respectively)
|
776,323
|
691,155
|
||||||
Residential mortgage loans, held-for-sale
|
1,996,303
|
1,725,534
|
||||||
Residential mortgage loans, held-for-sale, at fair value
|
524,863
|
-
|
||||||
Real estate owned
|
115,160
|
128,295
|
||||||
Residential mortgage loans subject to repurchase
|
110,181
|
-
|
||||||
Consumer loans, held-for-investment
|
1,140,769
|
1,374,263
|
||||||
Consumer loans, equity method investees
|
44,787
|
51,412
|
||||||
Cash and cash equivalents
|
330,148
|
295,798
|
||||||
Restricted cash
|
155,749
|
150,252
|
||||||
Servicer advances receivable
|
3,217,121
|
675,593
|
||||||
Trades receivable
|
3,424,865
|
1,030,850
|
||||||
Other assets
|
629,231
|
312,181
|
||||||
$
|
30,090,769
|
$
|
22,213,562
|
|||||
Liabilities and Equity
|
||||||||
Liabilities
|
||||||||
Repurchase agreements
|
$
|
14,387,020
|
$
|
8,662,139
|
||||
Notes and bonds payable (includes $117,470 and $0 at fair value at September 30, 2018 and December 31, 2017, respectively)
|
7,254,946
|
7,084,391
|
||||||
Trades payable
|
1,791,191
|
1,169,896
|
||||||
Residential mortgage loans repurchase liability
|
110,181
|
-
|
||||||
Due to affiliates
|
74,135
|
88,961
|
||||||
Dividends payable
|
170,177
|
153,681
|
||||||
Deferred tax liability, net
|
3,910
|
19,218
|
||||||
Accrued expenses and other liabilities
|
462,161
|
239,114
|
||||||
24,253,721
|
17,417,400
|
|||||||
Commitments and Contingencies
|
||||||||
Equity
|
||||||||
Common Stock, $0.01 par value, 2,000,000,000 shares authorized, 340,354,429 and 307,361,309 issued and outstanding at September 30, 2018 and December 31, 2017, respectively
|
3,404
|
3,074
|
||||||
Additional paid-in capital
|
4,256,045
|
3,763,188
|
||||||
Retained earnings
|
1,014,919
|
559,476
|
||||||
Accumulated other comprehensive income (loss)
|
468,952
|
364,467
|
||||||
Total New Residential stockholders’ equity
|
5,743,320
|
4,690,205
|
||||||
Noncontrolling interests in equity of consolidated subsidiaries
|
93,728
|
105,957
|
||||||
Total Equity
|
5,837,048
|
4,796,162
|
||||||
$
|
30,090,769
|
$
|
22,213,562
|
|||||
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Net income attributable to common stockholders
|
$
|
184,608
|
$
|
226,121
|
$
|
963,619
|
$
|
669,231
|
||||||||
Impairment
|
9,360
|
28,209
|
51,326
|
74,117
|
||||||||||||
Other Income adjustments:
|
||||||||||||||||
Other Income
|
||||||||||||||||
Change in fair value of investments in excess mortgage servicing rights
|
4,744
|
14,291
|
55,711
|
32,650
|
||||||||||||
Change in fair value of investments in excess mortgage servicing rights, equity method investees
|
(3,396
|
)
|
(2,054
|
)
|
(5,624
|
)
|
(6,056
|
)
|
||||||||
Change in fair value of investments in mortgage servicing rights financing receivables
|
39,329
|
(89,115
|
)
|
(218,187
|
)
|
(95,838
|
)
|
|||||||||
Change in fair value of servicer advance investments
|
5,353
|
(10,941
|
)
|
86,581
|
(70,469
|
)
|
||||||||||
(Gain) loss on settlement of investments, net
|
11,893
|
(1,553
|
)
|
(106,064
|
)
|
(1,250
|
)
|
|||||||||
Unrealized (gain) loss on derivative instruments
|
(24,299
|
)
|
(3,560
|
)
|
(27,985
|
)
|
124
|
|||||||||
Unrealized (gain) loss on other ABS
|
(7,197
|
)
|
(189
|
)
|
(12,001
|
)
|
(340
|
)
|
||||||||
(Gain) loss on transfer of loans to REO
|
(6,119
|
)
|
(5,179
|
)
|
(16,609
|
)
|
(16,791
|
)
|
||||||||
(Gain) loss on transfer of loans to other assets
|
1,528
|
(66
|
)
|
1,648
|
(359
|
)
|
||||||||||
(Gain) loss on Excess MSRs
|
(987
|
)
|
(606
|
)
|
(5,257
|
)
|
(1,948
|
)
|
||||||||
(Gain) loss on Ocwen common stock
|
145
|
(6,987
|
)
|
(4,655
|
)
|
(6,987
|
)
|
|||||||||
Other (income) loss
|
17,843
|
6,700
|
25,812
|
18,605
|
||||||||||||
Total Other Income Adjustments
|
38,837
|
(99,259
|
)
|
(226,630
|
)
|
(148,659
|
)
|
|||||||||
Other Income and Impairment attributable to non-controlling interests
|
(4,633
|
)
|
(6,329
|
)
|
(17,088
|
)
|
(24,430
|
)
|
||||||||
Change in fair value of investments in mortgage servicing rights
|
(44,192
|
)
|
11,518
|
(226,617
|
)
|
(77,465
|
)
|
|||||||||
(Gain) loss on settlement of mortgage loan origination derivative instruments
|
2,757
|
-
|
2,757
|
-
|
||||||||||||
Non-capitalized transaction-related expenses
|
5,274
|
6,467
|
18,784
|
14,397
|
||||||||||||
Incentive compensation to affiliate
|
23,848
|
19,491
|
65,169
|
72,123
|
||||||||||||
Deferred taxes
|
(1,865
|
)
|
28,410
|
(12,680
|
)
|
114,016
|
||||||||||
Interest income on residential mortgage loans, held-for sale
|
5,906
|
4,603
|
12,774
|
12,069
|
||||||||||||
Limit on RMBS discount accretion related to called deals
|
(2,914
|
)
|
(13,543
|
)
|
(13,108
|
)
|
(20,059
|
)
|
||||||||
Adjust consumer loans to level yield
|
(6,760
|
)
|
(9,874
|
)
|
(21,915
|
)
|
(23,460
|
)
|
||||||||
Core earnings of equity method investees:
|
||||||||||||||||
Excess mortgage servicing rights
|
4,468
|
3,476
|
10,514
|
10,010
|
||||||||||||
Core Earnings
|
$
|
214,694
|
$
|
199,290
|
$
|
606,905
|
$
|
671,890
|