Nationstar Reports Second Quarter 2014 Financial Results| Reuters
1. Nationstar Reports Second Quarter 2014 Financial Results|
Reuters
Wed Aug 6, 2014 12:03pm BST
Nationstar Studies second Quarter 2014 Monetary Results
Core EPS of $0.87; core pretax earnings of $125 million
GAAP EPS involving $0.74; GAAP pretax involving income regarding $106 million
Generated $10 billion regarding servicing assets inside Q2, which includes originations
Servicing acquisition commitments for much more than $20 billion throughout Q3
Completed real Estate Digital transaction; integration about track
Nationstar Mortgage Holdings Inc. (NYSE: NSM) ("Nationstar"), any leading residential mortgage
services company, nowadays reported financial results for its 2nd quarter ended June 30, 2014.
"The continued execution in our strategic plan produced growth across just about all in our
segments and also key monetary metrics," said Jay Bray, Chief Executive Officer. "Nationstar
continues to deliver increasing income and cash flows quarter more than quarter simply by
executing in our strategic initiatives. We are excited in regards in order to the earnings power of our
own current platforms also as the continued build-out of our comprehensive digital real-estate
support offerings. Our objective is being the particular premier real estate services provider for you
to residential owners, buyers, sellers, agents as well as investors."
Nationstar reported quarterly net earnings involving $67 million, or perhaps $0.74 for each share,
for the 2nd quarter, a new 174% boost over your $24 million or $0.27 for each reveal in the initial
quarter 2014. Nationstar generated Core EPS of $0.87 for each reveal compared to $0.61 a share in
the prior period, a growth associated with 43%. Core EPS excludes one-time expenses along with
MSR fair worth adjustments. for the actual quarter, pretax income was $106 million along with core
pretax income had been $125 million.
2. Second Quarter Company Highlights
(amounts in millions, unless in any kind of other case noted)
In order in order to increase transparency as well as reflect how a operations are managed,
Nationstar now presents its financials throughout three operating segments: Servicing, Solutionstar
and also Originations. Additionally, the particular Corporate and Some Other reporting unit consists
of corporate overhead not straight related using the operations, the particular former legacy
segment and also fascination expense connected simply with the unsecured senior notes. all prior
time period amounts reflect your alter inside the reportable segments.
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Servicing Segment
Â
Â
Â
Â
Â
Â
Â
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Q2'14
Q1'14
% Change
Total servicing charge income
$
302
276
9
%
Pretax income
5. %
(1) Excludes one-time transaction expenses related for the NRZ advance sale as well as MSR fair
value adjustments. Discover reconciliation tables.
(2) Excludes Solutionstar along with allocations for you to Corporate and also Some Other under
current segmentation.
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Servicing core pretax income increased 9% along with core pretax earnings margin remained flat in
the 2nd quarter as further investments had been made in workforce management and automation
through the quarter, the actual benefits of that are anticipated to accrue inside the third quarter.
The Actual existing expectation is perfect for rise in both margin as well as core pretax earnings by
means of the second half of the entire year principally driven by continued operational
improvements also as an rise in acquisitions. from a new schedule points perspective, the particular
Servicing operations achieved 9 basis factors involving operating profitability.
Nationstar's servicing portfolio, as measured through UPB, ended the 2nd quarter practically
unchanged coming from very first quarter levels, due to become able to $10 billion of latest
servicing assets generated via acquisitions and the originations platform. Since the conclusion
regarding the 2nd quarter, Nationstar currently provides commitments for a lot more than $20
billion within additional servicing acquisitions. Nationstar's pipeline regarding acquisition
possibilities totals over $300 billion within aggregate UPB.
Nationstar's 60-plus day delinquency price decreased slightly from your first quarter. Your servicing
portfolio CPR increased in the second quarter, reflective involving the reduced charge environment.
Solutionstar Segment
Solutionstar provides technology and information enhanced solutions to homebuyers, residence
sellers, real estate agents and companies engaged in the origination as well as / or perhaps servicing
involving mortgage loans. Solutionstar intends to transform the house getting encounter through the
utilization of the subsequent generation real-estate exchange as well as the delivery of higher top
quality residential real estate services. Solutionstar principally operates a couple of divisions:
Real Estate Exchange - comprises our HomeSearch.com along with Property Digital operational
offerings which usually utilize the strength of technology, information analytics as well as the world
wide web to provide technologies and services in which facilitate the actual efficient exchange
involving http://cebuayalahomes.com/properties/1016-residences homes by means of an internet
based real estate marketplace.
Real Estate Solutions - comprises the particular Solutionstar and Veripro branded residential
solutions which principally contain title, close, escrow, collateral valuation along with asset
management services.
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6. Â
Â
Â
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Q2'14
Q1'14
Â
% Change
Revenue - Real-estate Exchange
$
36
$
27
33
%
Revenue - Real-estate Services
$
47
$
38
24
%
Pretax earnings - total
$
38
$
7. 26
46
%
Pretax income margin
46
%
40
%
15
%
Real Estate Exchange - variety of properties sold
5,663
4,538
25
%
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Solutionstar's revenues increased because of a strong improve so as volume within our Real-estate
services division and the continued success with the HomeSearch.com platform inside effectively
marketing properties. Solutionstar's pretax margin increased within the 2nd quarter to 46% through
40% in the 1st quarter, primarily thanks to blend of revenues. Solutionstar's most current listings for
just about all periods are generally reflected for you to modify the referral costs typically earned
simply by servicers.
Solutionstar marketed nearly 5,700 properties inside Q2'14 and also expects greater than 20,000
sales more than the actual length of 2014. The Actual quantity of properties beneath management
will carry on to increase as a results of the particular successful closing of the private-label portfolio
acquisitions via Bank of America throughout late 2013. Inside addition, within the 2nd quarter
Solutionstar started selling properties about behalf associated with third-party customers via
HomeSearch.com.
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Originations Segment
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8. Â
Â
Â
Â
Â
Â
Q2'14
Q1'14
% Change
Revenue
$
165
$
130
27
%
Pretax income
$
69
$
24
188
%
Core pretax income(1)
$
69
11. %
(1) Excludes one-time expenses associated to be able to correct sizing the particular operations
inside Q1'14. see reconciliation tables.
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Total originations revenue as well as pretax income grew sequentially principally thanks for an rise
in gain about sale. Core pretax earnings margin increased 35% as a operate associated with
Nationstar's continued focus on the consumer immediate channel, which in turn presents a
substantial chance and partially insulates volatility inside volume in contrast for the broader market.
Nationstar's funded volume and also recapture price decreased sequentially as becoming a result of
thoughtfully originating higher margin loan products, a decline in HARP originations, and also
efficiently managing capacity while the operations began the migration from multiple origination
platforms into a single integrated platform along with process. The Particular vast majority
regarding volume inside the quarter came in the consumer immediate channel, which include
recapture and also Greenlight. Correspondent volume has been flat quarter more than quarter and
Nationstar is constantly on the view the particular correspondent channel as a cost-effective way to
acquire servicing.
Helping Homeowners
Nationstar remains committed in order to providing mortgage options for you to our greater than
2.2 million homeowners. Within the next quarter, we assisted practically 23,000 consumers steer
clear of foreclosure, which includes approximately 15,000 loan modifications that lower customer's
payments. This particular also included providing collateral workouts along along with other
repayment promises to approximately 8,000 homeowners.
We also assisted 23,000 homeowners secure mortgages. the total includes approximately 6,000
homeowners whose mortgages were refinanced by means of your House Cost-effective Refinance
program ("HARP"), which usually allows us to refinance a new borrower with a very high loan-t-
-value ratio or even a homeowner along with negative equity within their house.
Guidance
Nationstar remains before its 2014 budget so which as a new outcome is confirming its 2014 GAAP
EPS guidance involving $4.00 - $5.00.
Conference Contact Webcast along with Investor Presentation
Chief Executive Officer, Jay Bray, and Chief Monetary Officer, Robert Stiles, will host any conference
call with regard to investors along with analysts to be able to discuss Nationstar's second quarter
2014 results along along with other general enterprise matters with 9:00 a.m. ET on Wednesday,
August 6, 2014. To Always Be Able To listen for the event are living or perhaps in an archive which
in turn will be readily accessible for 14 days, visit Nationstar's website from
http://investors.nationstarholdings.com. the conference call will even be available through dialing
877-474-9502, or 857-244-7555 internationally. Please make use regarding the participant passcode
29117120 to get into your reside conference call. An investor presentation will also be offered by
http://investors.nationstarholdings.com.
12. Non-GAAP Economic Measures
This disclaimer pertains to each along with every use involving "Core Earnings for each Share" as
well as "Core EPS", "Core Pretax Income", and also "Servicing Core Pretax Income" within this
release. Core EPS can always be a metric which is employed by management to normalize earnings
for one-time expenses and modifications in fair worth of the MSR. Core pretax earnings is really a
metric which is used by management to exclude specific non-recurring items, along with changes
within the fair price of the actual MSR, throughout an make an effort to provide far better earnings
per discuss comparison to prior period. Servicing core pretax income is really a metric that's used by
management in order to exclude specific non-recurring pieces of an try to supply a significantly
better earnings for each talk about comparison for you to prior periods. Servicing core pretax
earnings excludes one-time expenses associated towards the advance sale to NRZ as well as MSR
fair worth adjustments.
About Nationstar Mortgage Holdings Inc.
Based within Lewisville, Texas, Nationstar earns fees through your delivery associated with quality
servicing, origination as well as transaction based solutions related principally to single-family
residences throughout the actual United States. Extra corporate details can become acquired at
www.nationstarholdings.com.
Forward looking Statements
Any statements within this launch that will usually tend to be not historical or even existing facts are
forward-looking statements. These types of forward-looking statements include, but aren't limited to,
statements regarding: estimates of our servicing segment's growth and also profitability; property
revenue within 2014; estimates involving Solutionstar profitability; and also estimates associated
with fiscal 12 months 2014 guidance pertaining to GAAP EPS. Forward-looking statements involve
identified as well as unidentified risks, uncertainties along using other factors in which could cause
our actual results performance, or perhaps achievements to be materially various through any kind
of future results, performances or even achievements expressed as well as implied through the
forward-statements. Particular of these risks and also uncertainties are generally described in the
"Risk Factors" section in our the majority of latest annual document as well as other necessary
documents as filed with the SEC which are available at the particular SEC's website in
http://www.sec.gov. Nationstar undertakes no obligation for you to publicly update or perhaps revise
virtually any forward-looking statements or even some other economic details contained herein, as
well as the statements made in this press release are generally current as of the date of this release
only.
Financial Tables
Â
NATIONSTAR MORTGAGE HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(dollars and shares in thousands, except per talk about data)
Â
13. Â
Â
Three Weeks Ended
June 30, 2014
Â
Â
March 31, 2014
Revenues
Servicing charge income
$
258,099
$
240,164
Other fee income
118,718
Â
101,547
Â
Total charge income
376,817
341,711
Gain upon mortgage loans held with regard to sale
172,916
Â
127,936
Â
14. Total revenues
549,733
469,647
Â
Total expenses and also impairments
346,711
321,133
Â
Other earnings (expense)
Interest income
42,941
43,943
Interest expense
(139,422
)
(156,600
)
Gain (loss) in curiosity rate swaps as well as caps
(953
)
2,821
Â
Total other income (expense)
(97,434
)
(109,836
15. )
Â
Income prior to taxes
105,588
38,678
Income tax expense
(38,941
)
(15,001
)
Net income
66,647
Â
23,677
Â
Â
Less: Net acquire (loss) attributable to noncontrolling interests
192
Â
(359
)
Net earnings attributable to Nationstar
$
66,455
Â
$
16. 24,036
Â
Â
Earnings for each share:
Basic earnings for each share
$
0.74
Â
$
0.27
Â
Diluted earnings per share
$
0.74
Â
$
0.27
Â
Weighted typical shares:
Basic
89,465
89,342
Dilutive effect associated with stock awards
729
Â
733
17. Â
Diluted
90,194
Â
90,075
Â
Â
Dividends declared for each share
--
Â
--
Â
Â
Â
NATIONSTAR MORTGAGE HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
Â
Â
Â
Three A Couple Of Months Ended
June 30, 2014
Â
Â
March 31, 2014
Assets
18. Cash and funds equivalents
$
623,927
$
404,073
Restricted cash
334,910
471,635
Accounts receivable
2,809,436
4,057,477
Mortgage loans held for sale
2,224,821
1,741,126
Mortgage loans held for investment, subject in order to nonrecourse debt - Legacy Assets, net
199,125
204,392
Reverse mortgage interests
1,772,386
1,620,879
Mortgage servicing rights
2,691,449
2,590,780
Property and equipment, net
123,720
119,306
19. Derivative monetary instruments
95,328
95,774
Other assets
292,672
327,121
Total assets
$
11,167,774
$
11,632,563
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Liabilities along with equity
Notes payable
$
4,017,943
$
4,591,998
Unsecured senior notes
2,443,962
2,444,020
Payables as well as accrued liabilities
1,071,626
1,189,430
Derivative economic instruments
33,116
20. 6,377
Mortgage servicing liabilities
80,492
82,210
Nonrecourse credit card debt - Legacy Assets
82,731
86,529
Excess spread financing (at fair value)
1,036,038
978,183
Participating curiosity financing
1,285,853
1,202,252
Mortgage servicing rights financing liabilities
33,452
39,737
Total liabilities
$
10,085,213
$
10,620,736
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Total equity
1,082,561
1,011,827
Total liabilities and also equity
21. $
11,167,774
$
11,632,563
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Â
SERVICING FEE INCOME BEFORE FAIR VALUE ADJUSTMENTS RECONCILIATION
(dollars in thousands)
Â
Â
Â
Three Several Weeks Ended
June 30, 2014
Â
Â
March 31, 2014
Servicing charge income
$
221,976
$
235,198
Loss mitigation as well as performance-based incentive fees
11,570
13,012
Modification fees
45,157
22. 32,808
Late service fees as well as other ancillary charges
15,919
17,794
Reverse mortgage fees
14,477
13,539
Other servicing charge associated revenues
5,456
Â
6,180
Â
Total servicing fee earnings just before MSR fair worth adjustments
314,555
318,531
Â
Changes within fair value credited for you to inputs / assumptions:
MSR
6,975
(20,645
)
MSR financing liability
31,785
4,407
Excess spread financing
(32,078
23. )
5,103
Â
Net change in fair worth due in order to inputs / assumptions:
6,682
(11,135
)
Â
Other changes in fair worth (amortization):
MSR
(52,664
)
(57,704
)
MSR financing liability
6,684
6,381
Excess spread financing
4,942
Â
(1,734
)
Net other modifications in fair value:
(41,038
)
(53,057
24. )
Â
Total servicing fee income
280,199
254,339
Other fee income
21,798
Â
21,811
Â
Total servicing revenues
$
301,997
Â
$
276,150
Â
Â
Â
CORE EARNINGS PER SHARE RECONCILIATION
(dollars as well as shares within thousands, except per talk about data)
Â
Â
Â
Three A Couple Of Months Ended
June 30, 2014
25. Â
Â
March 31, 2014
Net earnings attributable for you to Nationstar Inc.
$
66,455
$
24,036
Net gain (loss) attributable to noncontrolling interests
192
Â
(359
)
Net income
66,647
23,677
Â
Income taxes
38,941
Â
15,001
Â
Income before taxes
105,588
38,678
Â
26. One-time expenses
25,730
39,252
MSR mark
(6,682
)
11,135
Â
Core pretax income
124,636
89,065
Â
Income taxes (using Q2'14, Q1'14 tax rate)
(45,966
)
(34,543
)
Core income
78,670
54,522
Â
Average discuss count
90,194
90,075
Â
Core EPS
27. $
0.87
Â
$
0.61
Â
Â
Â
SERVICING: CORE PRETAX INCOME RECONCILIATION
(dollars inside thousands)
Â
Â
Â
Three months Ended
June 30, 2014
Â
Â
March 31, 2014
Pretax income
$
67,126
$
49,543
One-time expenses
25,730
17,900
28. Ramp expense
--
--
Â
Changes inside fair worth due for you to inputs or even assumptions
MSR
(6,975
)
20,645
MSR financing liability
(31,785
)
(4,407
)
Excess spread
32,078
Â
(5,103
)
Net change in fair value because of to inputs or assumptions
(6,682
)
11,135
Â
Â
Servicing core pretax income
29. $
86,174
Â
$
78,578
Â
Â
Â
ORIGINATIONS: CORE PRETAX INCOME RECONCILIATION
(dollars in thousands)
Â
Three Weeks Ended
June 30, 2014
Â
March 31, 2014
Pretax income
$
68,634
$
24,182
One-time expenses
--
15,852
Â
Â
Originations core pretax income
30. $
68,634
$
40,034
Â
Â
Q2'14 SEGMENTATION RECONCILIATION
Â
Previous Q2'14 Disclosure
Â
Â
Â
Servicing
Â
Â
Solutionstar (1)
Â
Â
Originations
Â
Â
Operating
Â
Â
Legacy
Â
32. 125
Â
Current Q2'14 Disclosure
Servicing
Solutionstar
Originations
Operating
Corporate / Other
Total
Operating Expenses
$
(186
)
$
(46
)
$
(97
)
$
(328
)
$
(18
)
$
33. (347
)
Core Pretax Income
86
38
69
193
(68
)
125
Â
Â
Q1'14 SEGMENTATION RECONCILIATION
Â
Previous Q1'14 Disclosure
Â
Â
Â
Servicing
Â
Â
Solutionstar (1)
Â
Â
Originations
Â
34. Â
Operating
Â
Â
Legacy
Â
Â
Total
Operating Expenses
$
(206
)
$
--
$
(108
)
$
(314
)
$
(7
)
$
(321
)
35. Core Pretax Income
69
--
23
92
(3
)
89
Â
Current Q1'14 Disclosure
Servicing
Solutionstar
Originations
Operating
Corporate / Other
Total
Operating Expenses
$
(165
)
$
(39
)
$
(105
)
36. $
(310
)
$
(12
)
$
(321
)
Core Pretax Income
79
26
40
145
(55
)
89
Â
(1) Solutionstar has been included throughout servicing below prior segmentation disclosures.
Â
Â
SEGMENT INCOME STATEMENT
(dollars throughout thousands)
Â
Â
Â
37. For the actual quarter ended June 30, 2014
Servicing
Â
Â
Originations
Â
Â
Solutionstar
Â
Â
Operating
Â
Â
Corporate and
Other
Â
Â
Elim.
Â
Â
Total
Â
Â
Revenues
Servicing charge income
$
38. 280,199
$
212
$
5
$
280,416
$
275
$
(22,592
)
$
258,099
Other charge income
21,798
Â
13,689
Â
83,359
Â
118,846
Â
(128
)
--
39. Â
118,718
Â
Total charge income
301,997
13,901
83,364
399,262
147
(22,592
)
376,817
Gain in mortgage loans held pertaining to sale
(130
)
151,201
Â
--
Â
151,071
Â
(379
)
22,224
Â
172,916
40. Â
Total revenues
301,867
165,102
83,364
550,333
(232
)
(368
)
549,733
Â
Total expenses along with impairments
185,690
97,084
45,510
328,284
18,427
--
346,711
Â
Other income (expense)
Interest income
22,158
17,327
--
41. 39,485
3,088
368
42,941
Interest expense
(70,014
)
(16,711
)
(90
)
(86,815
)
(52,607
)
--
(139,422
)
Loss about curiosity price swaps and caps
(1,195
)
--
Â
--
Â
(1,195
42. )
242
Â
--
Â
(953
)
Total additional earnings (expense)
(49,051
)
616
(90
)
(48,525
)
(49,277
)
368
(97,434
)
Â
Pretax earnings (loss)
67,126
68,634
37,764
173,524
43. (67,936
)
--
105,588
One time expenses
25,730
--
--
25,730
--
--
25,730
MSR Mark
(6,682
)
--
Â
--
Â
(6,682
)
--
Â
--
Â
(6,682
44. )
Core pretax income
$
86,174
$
68,634
$
37,764
$
192,572
$
(67,936
)
$
--
$
124,636
Â
Earnings per share
$
0.74
Core earnings per share
$
0.87
Â
Â
45. SEGMENT INCOME STATEMENT
(dollars within thousands)
Â
Â
Â
For the actual quarter ended March 31, 2014
Servicing
Â
Â
Originations
Â
Â
Solutionstar
Â
Â
Operating
Â
Â
Corporate
and Other
Â
Â
Elim.
Â
Â
Total
46. Â
Revenues
Servicing charge income
$
254,339
$
--
$
8
254,347
$
298
$
(14,481
)
$
240,164
Other charge income
21,811
Â
14,048
Â
64,991
Â
100,850
Â
47. 697
Â
--
Â
101,547
Â
Total charge income
276,150
14,048
64,999
355,197
995
(14,481
)
341,711
Gain on mortgage loans held pertaining to sale
(1,695
)
116,200
Â
--
Â
114,505
Â
(672
)
48. 14,103
Â
127,936
Â
Total revenues
274,455
130,248
64,999
469,702
323
(378
)
469,647
Â
Total expenses as well as impairments
165,333
105,050
39,209
309,592
11,541
--
321,133
Â
Other earnings (expense)
Â
Interest income
49. 18,664
21,521
--
40,185
3,380
378
43,943
Interest expense
(80,799
)
(22,537
)
(54
)
(103,390
)
(53,210
)
--
(156,600
)
Loss in fascination price swaps and also caps
2,556
Â
--
Â
50. --
Â
2,556
Â
265
Â
--
Â
2,821
Â
Total additional income (expense)
(59,579
)
(1,016
)
(54
)
(60,649
)
(49,565
)
378
(109,836
)
Â
Pretax income (loss)
51. 49,543
24,182
25,736
99,461
(60,783
)
--
38,678
One time expenses
17,900
15,852
--
33,752
5,500
--
39,252
MSR Mark
11,135
Â
--
Â
Â
--
Â
11,135
Â
52. Â
--
Â
--
Â
Â
11,135
Â
Core pretax income
$
78,578
$
40,034
$
25,736
$
144,348
$
(55,283
)
$
--
$
89,065
Â
Earnings per share
53. $
0.27
Core earnings per share
$
0.61
Â
Nationstar Mortgage Holdings Inc.
Marshall Murphy, 469-549-3005
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806
1016 Residences
1016 Residences is a high-end residential condominium project co-developed by Ayala Land, Inc. and
Cebu Holdings, Inc. Carrying the Ayala Land Premier brand, the development offers to deliver an
exclusive and exceptional living experience.
Masterplan and Concept
1016 Residences is located centrally at Cebu Business Park. It is a short walk from the city's premier
retail and entertainment hub, the Ayala Center Cebu, and is directly connected to the exclusive City
Sports Club Cebu - giving residents a limitless array of facilities and amenities for shopping,
recreation and business. Its convenient location is balanced with space and luxury through carefully
planned and designed spaces which take advantage of scenic views of the sea and the mountains and
open up opportunities for open spaces even on the upper floors.
A well-crafted selection of business, leisure and wellness amenities Redraw the dimensions of your
everyday. Contemporary facilities reflect the fluid grace of contemporary living. Resort-inspired
interiors, refreshing open spaces, glimpses of green from every floor. Topped by a roof deck
providing you with a view of Cebu that’s truly something to celebrate.
54. Linked to 1016 Residences via meandering garden paths is the new City Sports Club Cebu. With a
multimillion-peso refurbishment plan under way, your residence comes with usage rights to a
members-only sports and leisure club. Fitness and wellness facilities, flexible function spaces and
exceptional dining. All weaving together a distinctive, complete urban lifestyle, one that you can
easily access from your home at 1016 Residences
Property For Sale: 1016 Residences
1016 Residences; HLURB TLS No. 0005
Project Type: Residential Condominium
Location: Cebu City
Turn Over Date: 4th Quarter 2014
Unit Sizes: 91sqm - 250sqm
Price Range: 13m - 55M
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