Solid Performance: All business lines of Rithm Capital had extremely well performance in Q1 2024.
Earnings Figures: GAAP net income was reported at $262 million or $0.54 per diluted share, with earnings available for distribution at $233 million or $0.48 per diluted share.
Dividend & Liquidity: The common dividend for the quarter was announced at $0.25, with cash and liquidity at the end of Q1 2024 standing at $2 billion.
Servicing Portfolio: Achieved a total servicing portfolio of $857 billion, showcasing significant growth and operational strength.
ROEs and Profits: Newrez delivered 23% ROEs with notable increases in profits across service segments.
Future Guidance
Capital Deployment & Returns: Expectations to deploy capital in favorable market conditions to generate outsized returns.
Risk Management: A continued focus on managing duration risk and hedging MSR positions to stabilize earnings and book value.
Growth in Alternatives: Aim to grow the alternatives business, emphasizing excellent risk-adjusted returns for shareholders and LPs.
Expansion Strategies: Plans to increase scale in the alternatives business, add insurance, and tap into retail markets alongside institutional markets.
Trends, Market Conditions, Sentiment
Interest Rate Trends: Recent backup in rates seen as an opportunity for capital deployment.
MSR Hedging & Stability: Hedging strategies in MSR positions have fortified the company’s resilience against rate volatility.
Risk-Reward Attraction: Credit markets currently offer attractive levels of risk-reward, akin to those seen outside of financial crisis levels.
Operation Excellence: Continued focus on operational excellence, especially in loan servicing and originations, in response to market conditions.
Growth Across Platforms: Significant growth and performance across business lines, including Newrez’s mortgage servicing and origination segments, and Genesis’s record origination quarter.
Market Share Expansion: Newrez aims for market share growth in the origination segment and the addition of SLS acquisition enhances third-party business.
Notable Quotes
”As you look at our business, it is another very solid quarter for Rithm and quite frankly, all of our operating companies.” - Michael Nierenberg
”With the recent backup in rates, the market should provide us with great opportunities to deploy capital and generate and continue to generate outsized returns.” - Michael Nierenberg
”What we are seeing in terms of risk-reward in credit markets are some of the most attractive levels we have seen in years outside of financial crisis levels.” - Michael Nierenberg
”This is not a race to get bigger. This is a race to generate more earnings.” - regarding their strategic positioning and vision for growth amidst market conditions.
