ManTech International Corp
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Industrials : Professional Services | Small Cap Value
Company profile

ManTech International Corporation is a provider of technology solutions and services for the United States intelligence community, defence and federal civilian agencies. The Company is engaged in offering a spectrum cyber, data collection and analytics, enterprise information technology (IT) and systems engineering and software application development solutions that supports national and homeland security. It provides services and solutions that support missions of national priority, such as global cyber operations, military operational readiness, information technology (IT) and digital modernization, and national security threat intelligence and analytics. It focuses on cyber network operations, defence, analytics, hardening and resilience, security orchestration, automation and response, range and training, and risk management and compliance. It also provides model-based systems engineering, predictive analytics, data/computational science, and cloud engineering solutions.

Closing Price
$73.52
Day's Change
0.32 (0.44%)
Bid
--
Ask
--
B/A Size
--
Day's High
73.83
Day's Low
72.30
Volume
(Heavy Day)
Volume:
186,988

10-day average volume:
140,882
186,988

New Residential Investment Corp. Announces Third Quarter 2021 Results

6:30 am ET November 2, 2021 (BusinessWire) Print

New Residential Investment Corp. (NYSE: NRZ; "New Residential" or the "Company") today reported the following information for the third quarter ended September 30, 2021:

Third Quarter 2021 Financial Highlights:

GAAP net income of $146.1 million, or $0.30 per diluted common share(1) Core earnings of $209.9 million, or $0.44 per diluted common share(1)(2) Common dividend of $116.6 million, or $0.25 per common share(1) Book value per common share of $11.35(1) $1.4 billion of cash, for $1.9 billion of total liquidity(3)

                                Q3 2021                     Q3 2021                         Q2 2021                     Q2 2021                 
                                            -------------------- --------------------------------                                             -------------------- --------------------------------
Summary Operating Results:                                                             
GAAP Net Income per Diluted Common Share(1) $                    $        0.30       $                    $        0.26      
GAAP Net Income                             $                    $       146.1   million              million              $                    $       121.3   million              million
                                                                    
Non-GAAP Results:                                                                      
Core Earnings per Diluted Common Share(1)   $                    $        0.44       $                    $        0.31      
Core Earnings(2)                            $                    $       209.9   million              million              $                    $       146.6   million              million
                                                                    
NRZ Common Dividend:                                                                   
Common Dividend per Share(1)                $                    $        0.25       $                    $        0.20      

"Our performance in the third quarter demonstrated the strength of our overall platform across complementary strategies," said Michael Nierenberg, Chairman, Chief Executive Officer and President of New Residential. "Third quarter earnings were supported by the addition of the Caliber Home Loans, Inc. platform, strength in our investment portfolio, slowing MSR amortization and higher recapture. Over the last few years, we have evolved into a true asset creator, and, with the recently announced agreement to acquire Genesis Capital LLC, we plan to further our ability to create, retain and manage strong assets for our balance sheet. We believe our comprehensive strategy of combining investment management expertise with complementary operating companies will continue to drive earnings for our shareholders."

Nierenberg continued, "With the closing of the Caliber acquisition in August, the integration of the Caliber and Newrez mortgage platforms is well underway. We are thrilled to be working together as a united group to drive positive outcomes for borrowers and have already made significant progress in combining our teams, strategies and technologies to further position ourselves as a leader within the industry. We continue to believe that the combination of these two companies will allow our business to increase scale, efficiency, recapture, servicing and origination leadership."

Third Quarter 2021 Company Highlights:

Corporate Highlights Closed acquisition of Caliber Home Loans, Inc. ("Caliber") New Residential completed its previously announced acquisition of Caliber, a leading mortgage originator and servicer. New Residential's results for the third quarter include the financial results of Caliber beginning on August 23, 2021 through September 30, 2021 Raised $465 million in gross proceeds in an 18.6 million share preferred stock offering Origination Segment pre-tax income of $177.5 million (up 136% QoQ and down 43% YoY)(4) Quarterly origination funded production of $34.5 billion in unpaid principal balance ("UPB") (up 47% QoQ and up 91% YoY) Reported quarterly funded production includes stub period of Q3'21 origination production from Caliber Total gain on sale margin of 1.61% for the third quarter of 2021 compared to 1.31% for the second quarter of 2021 Gain on sale margin increased with additional benefit from channel diversification and the combination of Caliber and Newrez LLC ("Newrez") platforms Servicing Servicing portfolio grew to $476 billion in UPB (up 56% QoQ and up 66% YoY) driven by the addition of mortgage servicing rights ("MSRs") from the Caliber acquisition during the quarter $156 billion UPB of Full MSRs were added from Caliber MSRs and Servicer Advances MSR portfolio totaled approximately $635 billion UPB as of September 30, 2021 compared to $489 billion UPB as of June 30, 2021(5) Servicer advance balances of $3.2 billion as of September 30, 2021, effectively unchanged from June 30, 2021 Residential Securities and Call Rights Sold $4.5 billion (net face value) of Agency securities Called non-agency collateral of $636 million UPB(6) Residential Loans Sold $850 million (face value) of residential loans Priced two securitizations (one investor loan and one Non-QM) representing approximately $600 million UPB of collateral Acquired $91 million of early buyout ("EBO") loans Acquired $570 million of Non-QM and Investor Loans Grew single-family rental portfolio by approximately 725 units Financing and Leverage Overall leverage of 2.3x, down from 3.5x at June 30, 2021(7) Leverage excluding Agency securities of 1.0x, down from 1.1x at June 30, 2021 Fourth Quarter 2021 Commentary(8) New Residential entered into a definitive agreement with affiliates of The Goldman Sachs Group, Inc. to acquire Genesis Capital LLC, a leading business purpose lender that provides innovative solutions to developers of new construction, fix and flip and rental hold projects, and acquire a related portfolio of loans Estimated Newrez and Caliber Q4'21 Funded Origination Volume of approximately $35 billion to $40 billion UPB(9) Estimated Newrez and Caliber Q4'21 Servicing Portfolio UPB of approximately $480 billion to $490 billion UPB(9)

(1)                  Per common share calculations for both GAAP Net Income and Core Earnings are based on 482,282,695 and 472,729,245 weighted average diluted shares for the quarter ended September 30, 2021 and June 30, 2021, respectively. Per share calculations of both Common Dividend and Book Value are based on 466,579,920 basic common shares outstanding at both September 30, 2021 and June 30, 2021.                                                                                                                                                                                                                                     Per common share calculations for both GAAP Net Income and Core Earnings are based on 482,282,695 and 472,729,245 weighted average diluted shares for the quarter ended September 30, 2021 and June 30, 2021, respectively. Per share calculations of both Common Dividend and Book Value are based on 466,579,920 basic common shares outstanding at both September 30, 2021 and June 30, 2021.
                                                                                                                                                                                                                                         
(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.                                                                                                                                                                                                                                     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)                  Total liquidity includes cash and available undrawn financing.                                                                                                                                                                                                                                     Total liquidity includes cash and available undrawn financing.
                                                                                                                                                                                                                                         
(4)                  Includes non-controlling interests.                                                                                                                                                                                                                                     Includes non-controlling interests.
                                                                                                                                                                                                                                         
(5)                  Includes excess and full MSRs.                                                                                                                                                                                                                                     Includes excess and full MSRs.
                                                                                                                                                                                                                                         
(6)                  Call rights UPB estimated as of September 30, 2021. The UPB of the loans relating to our call rights may be materially lower than the estimates in this release, and there can be no assurance that we will be able to execute on this pipeline of callable deals in the near term, on the timeline presented above, or at all, or that callable deals will be economically favorable. The economic returns from this strategy could be adversely affected by a rise in interest rates and are contingent on the level of delinquencies and outstanding advances in each transaction, fair market value of the related collateral and other economic factors and market conditions. We may become subject to claims and legal proceedings, including purported class-actions, in the ordinary course of our business, challenging our right to exercise these call rights and, as a result, we may not be able to exercise such rights on favorable terms or at all. Call rights are usually exercisable when current loan balances in a related portfolio are equal to, or lower than, 10% of their original balance. Call rights UPB estimated as of September 30, 2021. The UPB of the loans relating to our call rights may be materially lower than the estimates in this release, and there can be no assurance that we will be able to execute on this pipeline of callable deals in the near term, on the timeline presented above, or at all, or that callable deals will be economically favorable. The economic returns from this strategy could be adversely affected by a rise in interest rates and are contingent on the level of delinquencies and outstanding advances in each transaction, fair market value of the related collateral and other economic factors and market conditions. We may become subject to claims and legal proceedings, including purported class-actions, in the ordinary course of our business, challenging our right to exercise these call rights and, as a result, we may not be able to exercise such rights on favorable terms or at all. Call rights are usually exercisable when current loan balances in a related portfolio are equal to, or lower than, 10% of their original balance.
                                                                                                                                                                                                                                         
(7)                  Represents recourse leverage. Excludes non-recourse leverage, including outstanding consumer debt, servicer advance debt, SAFT 2013-1 and MDST Trusts mortgage backed securities issued, and Shellpoint non-agency RMBS.                                                                                                                                                                                                                                     Represents recourse leverage. Excludes non-recourse leverage, including outstanding consumer debt, servicer advance debt, SAFT 2013-1 and MDST Trusts mortgage backed securities issued, and Shellpoint non-agency RMBS.
                                                                                                                                                                                                                                         
(8)                  Based on management's current views and estimates, and actual results may vary materially.                                                                                                                                                                                                                                     Based on management's current views and estimates, and actual results may vary materially.
                                                                                                                                                                                                                                         

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. 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.

EARNINGS CONFERENCE CALL

New Residential's management will host a conference call on Tuesday, November 2, 2021 at 8:00 A.M. Eastern Time. A copy of the earnings release will be posted to the Investor Relations section of New Residential's website, www.newresi.com.

All interested parties are welcome to participate on the live call. The conference call may be accessed by dialing 1-833-974-2382 (from within the U.S.) or 1-412-317-5787 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference "New Residential Third Quarter 2021 Earnings Call." In addition, participants are encouraged to pre-register for the conference call at https://dpregister.com/sreg/10160952/ee52599f38.

A simultaneous webcast of the conference call will be available to the public on a listen-only basis at www.newresi.com. Please allow extra time prior to the call to visit the website and download any necessary software required to listen to the internet broadcast.

A telephonic replay of the conference call will also be available two hours following the call's completion through 11:59 P.M. Eastern Time on Tuesday, November 9, 2021 by dialing 1-877-344-7529 (from within the U.S.) or 1-412-317-0088 (from outside of the U.S.); please reference access code "10160952."

Consolidated Statements of Income (Unaudited)
($ in thousands, except share and per share data)
                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                              Three Months Ended                                                                                                Nine Months Ended                                                                             
                                                                                                                                                            --------------------------------------------------------------------------------------                            -------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                     September 30,                         June 30, 2021                                  September 30,                                           September 30,                                  QoQ Change                             YoY Change
                                                                                                                                                                            2021                                                                                                                       2021                                                                       2020
                                                                                                                                                            ---------------------------------                        ---------------------------------                        ---------------------------------------------------                        --------------------------------------------------                         --------------------------------                        -----------------------------------
Revenues                                                                                                                                                                                                                                                                                       
                                                                                                                                                            $      398,645     $      388,858     $                      1,168,431     $                      1,390,042     $       9,787     $       (221,611 )
   Servicing fee revenue, net and interest income from MSR financing receivables
                                                                                                                                                                  (195,623 )                            (417,983 )                           (421,332 )                         (1,731,378 )                            222,360            1,310,046  
   Change in fair value of MSRs and MSR financing receivables (including amortization of $(287,318), $(297,778), $(924,766) and $(1,135,515), respectively)
                                                                                                                                                            -------------  --------------------                      -------------  --------------------                      -------------------- ----------- --------------------                      -------------------- ----------- -------------------                       ------------  --------------------                      ---------------  --------------------
Servicing revenue, net                                                                                                                                             203,022            (29,125 )                            747,099          (341,336 )                            232,147            1,088,435  
Interest income                                                                                                                                                    190,633            201,762           593,342           622,224           (11,129 )                               (28,882 )
Gain on originated mortgage loans, held-for-sale, net                                                                                                              566,761            286,885         1,257,094           966,813           279,876              290,281  
                                                                                                                                                            -------------  --------------------                      -------------  --------------------                      -------------------- ----------- --------------------                      -------------------- ----------- -------------------                       ------------  --------------------                      ---------------  --------------------
                                                                                                                                                960,416            459,522         2,597,535         1,247,701           500,894            1,349,834  
                                                                                                                                                            -------------  --------------------                      -------------  --------------------                      -------------------- ----------- --------------------                      -------------------- ----------- -------------------                       ------------  --------------------                      ---------------  --------------------
Expenses                                                                                                                                                                                                                                                                                       
Interest expense                                                                                                                                                   129,928            106,539           355,372           463,786            23,389             (108,414 )
General and administrative expenses                                                                                                                                245,071            205,668           647,244           546,939            39,403              100,305  
Compensation and benefits                                                                                                                                          324,545            194,730           717,919           412,402           129,815              305,517  
Management fee to affiliate                                                                                                                                         24,315             23,677            70,154            66,682               638                3,472  
                                                                                                                                                            -------------  --------------------                      -------------  --------------------                      -------------------- ----------- --------------------                      -------------------- ----------- -------------------                       ------------  --------------------                      ---------------  --------------------
                                                                                                                                                723,859            530,614         1,790,689         1,489,809           193,245              300,880  
                                                                                                                                                            -------------  --------------------                      -------------  --------------------                      -------------------- ----------- --------------------                      -------------------- ----------- -------------------                       ------------  --------------------                      ---------------  --------------------
Other Income (Loss)                                                                                                                                                                                                                                                                            
Change in fair value of investments                                                                                                                                 11,112            229,900             1,224          (123,314 )                           (218,788 )                               124,538  
Gain (loss) on settlement of investments, net                                                                                                                      (98,317 )                             (78,611 )                           (188,919 )                           (968,995 )                            (19,706 )                               780,076  
Other income (loss), net                                                                                                                                            59,266             30,044            79,696           (39,766 )                             29,222              119,462  
                                                                                                                                                            -------------  --------------------                      -------------  --------------------                      -------------------- ----------- --------------------                      -------------------- ----------- -------------------                       ------------  --------------------                      ---------------  --------------------
                                                                                                                                                (27,939 )                             181,333          (107,999 )                         (1,132,075 )                           (209,272 )                             1,024,076  
                                                                                                                                                            -------------  --------------------                      -------------  --------------------                      -------------------- ----------- --------------------                      -------------------- ----------- -------------------                       ------------  --------------------                      ---------------  --------------------
Impairment                                                                                                                                                                                                                                                                                     
Provision (reversal) for credit losses on securities                                                                                                                (2,370 )                              (1,756 )                             (5,020 )                             15,166              (614 )                               (20,186 )
Valuation and credit loss provision (reversal) on loans and real estate owned (REO)                                                                                  8,748            (32,652 )                            (42,617 )                            118,504            41,400             (161,121 )
                                                                                                                                                            -------------  --------------------                      -------------  --------------------                      -------------------- ----------- --------------------                      -------------------- ----------- -------------------                       ------------  --------------------                      ---------------  --------------------
                                                                                                                                                  6,378            (34,408 )                            (47,637 )                            133,670            40,786             (181,307 )
                                                                                                                                                            -------------  --------------------                      -------------  --------------------                      -------------------- ----------- --------------------                      -------------------- ----------- -------------------                       ------------  --------------------                      ---------------  --------------------
Income (Loss) Before Income Taxes                                                                                                                                  202,240            144,649           746,484        (1,507,853 )                             57,591            2,254,337  
Income tax expense (benefit)                                                                                                                                        31,559             (1,077 )                            128,741           (48,647 )                             32,636              177,388  
                                                                                                                                                            -------------  --------------------                      -------------  --------------------                      -------------------- ----------- --------------------                      -------------------- ----------- -------------------                       ------------  --------------------                      ---------------  --------------------
Net Income (Loss)                                                                                                                                           $      170,681     $      145,726                        $     617,743                        $             (1,459,206         )   $      24,955     $      2,076,949  
                                                                                                                                                            ------ ------- --------------------                      ------ ------- --------------------                      -------------------- ----------- --------------------                      -------------------- ---------------------  ---------                      ------ ------ --------------------                      ------ --------- --------------------
Noncontrolling interests in income (loss) of consolidated subsidiaries                                                                                               9,001             10,053            28,448            34,118            (1,052 )                                (5,670 )
Dividends on preferred stock                                                                                                                                        15,533             14,358            44,249            39,938             1,175                4,311  
                                                                                                                                                            -------------  --------------------                      -------------  --------------------                      -------------------- ----------- --------------------                      -------------------- ----------- -------------------                       ------------  --------------------                      ---------------  --------------------
Net Income (Loss) Attributable to Common Stockholders                                                                                                       $      146,147     $      121,315                        $     545,046                        $             (1,533,262 )           $      24,832     $      2,078,308  
                                                                                                                                                            ====== ======= ====================                      ====== ======= ====================                      ==================== =========== ====================                      ==================== =====================  =========                      ====== ====== ====================                      ====== ========= ====================
                                                                                                                                                                                                                                                                            
Net Income (Loss) Per Share of Common Stock                                                                                                                                                                                                                                                    
                                                                                                                                                            $         0.31     $         0.27                        $        1.22                        $                  (3.69         )                      
   Basic
                                                                                                                                                            $         0.30     $         0.26                        $        1.18                        $                  (3.69         )                      
   Diluted
Weighted Average Number of Shares of Common Stock Outstanding                                                                                                                                                                                                                                  
                                                                                                                                                               466,579,920        456,312,486       446,085,657       415,665,441                                         
   Basic
                                                                                                                                                               482,282,695        472,729,245       461,694,481       415,665,441                                         
   Diluted
                                                                                                                                                                                                                                                                            
Consolidated Balance Sheets
($ in thousands, except share data)
                                                                                                                                                                                                  
                                                                                                                                                                                        September 30,                            December 31,
                                                                                                                                                                                                               2021                                                        2020
                                                                                                                                                                                                            (Unaudited)
                                                                                                                                                                                             -------------------------------------                        ------------------------------------
Assets                                                                                                                                                                                                               
                                                                                                                                                                                             $          359,288     $         410,855  
   Excess mortgage servicing rights assets, at fair value
                                                                                                                                                                                                      6,565,267             4,585,841  
   Mortgage servicing rights and mortgage servicing rights financing receivables, at fair value
                                                                                                                                                                                                        472,004               538,056  
   Servicer advance investments, at fair value
                                                                                                                                                                                                      9,973,795            14,244,558  
   Real estate and other securities
                                                                                                                                                                                                      1,142,807             1,359,754  
   Residential loans and variable interest entity consumer loans held-for-investment, at fair value
                                                                                                                                                                                                     14,117,300             5,215,703  
   Residential mortgage loans, held-for-sale ($13,972,557 and $4,705,816 at fair value, respectively)
                                                                                                                                                                                                      1,826,620             1,452,005  
   Residential mortgage loans subject to repurchase
                                                                                                                                                                                                      1,366,678               944,854  
   Cash and cash equivalents
                                                                                                                                                                                                        194,745               135,619  
   Restricted cash
                                                                                                                                                                                                      2,782,622             3,002,267  
   Servicer advances receivable
                                                                                                                                                                                                 --                 4,180  
   Receivable for investments sold
                                                                                                                                                                                                      2,802,989             1,358,422  
   Other assets
                                                                                                                                                                                             -----------------  --------------------                      ----------------  --------------------
                                                                                                                                                                          $       41,604,115     $      33,252,114  
                                                                                                                                                                                             ======= ========== ====================                      ====== ========== ====================
Liabilities and Equity                                                                                                                                                                                               
Liabilities                                                                                                                                                                                                          
                                                                                                                                                                                             $       22,759,985     $      17,547,680  
   Secured financing agreements
                                                                                                                                                                                                      8,248,092             7,644,195  
   Secured notes and bonds payable ($798,198 and $1,662,852 at fair value, respectively)
                                                                                                                                                                                                      1,826,620             1,452,005  
   Residential mortgage loan repurchase liability
                                                                                                                                                                                                        542,849               541,516  
   Unsecured senior notes, net of issuance costs
                                                                                                                                                                                                 --                   154  
   Payable for investments purchased
                                                                                                                                                                                                          8,895                 9,450  
   Due to affiliates
                                                                                                                                                                                                        124,999                90,128  
   Dividends payable
                                                                                                                                                                                                      1,465,562               537,302  
   Accrued expenses and other liabilities
                                                                                                                                                                                             -----------------  --------------------                      ----------------  --------------------
                                                                                                                                                                                  34,977,002            27,822,430  
                                                                                                                                                                                             -----------------  --------------------                      ----------------  --------------------
Commitments and Contingencies                                                                                                                                                                                        
                                                                                                                                                                                                  
Equity                                                                                                                                                                                                               
                                                                                                                                                                                                      1,262,498               812,992  
   Preferred stock, $0.01 par value, 100,000,000 shares authorized, 52,210,000 and 33,610,000 issued and outstanding, $1,305,250 and $840,250 aggregate liquidation preference, respectively
                                                                                                                                                                                                          4,667                 4,148  
   Common stock, $0.01 par value, 2,000,000,000 shares authorized, 466,579,920 and 414,744,518 issued and outstanding, respectively
                                                                                                                                                                                                      6,057,739             5,547,108  
   Additional paid-in capital
                                                                                                                                                                                                       (856,803 )                             (1,108,929 )
   Retained earnings (accumulated deficit)
                                                                                                                                                                                                         87,989                65,697  
   Accumulated other comprehensive income
                                                                                                                                                                                             -----------------  --------------------                      ----------------  --------------------
                                                                                                                                                                                                      6,556,090             5,321,016  
   Total New Residential stockholders' equity
                                                                                                                                                                                                         71,023               108,668  
   Noncontrolling interests in equity of consolidated subsidiaries
                                                                                                                                                                                             -----------------  --------------------                      ----------------  --------------------
                                                                                                                                                                                                      6,627,113             5,429,684  
      Total equity
                                                                                                                                                                                             -----------------  --------------------                      ----------------  --------------------

NON-GAAP MEASURES AND RECONCILIATION TO GAAP NET INCOME

New Residential has five primary variables that impact its operating performance: (i) the current yield earned on the Company's investments, (ii) the interest expense under the debt incurred to finance the Company's investments, (iii) the Company's operating expenses and taxes, (iv) the Company's realized and unrealized gains or losses on investments, including any impairment or reserve for expected credit losses and (v) income from the Company's origination and servicing businesses. "Core earnings" is a non-GAAP measure of the Company's operating performance, excluding the fourth variable above and adjusts the earnings from the consumer loan investment to a level yield basis. Core earnings is used by management to evaluate the Company's performance without taking into account: (i) realized and unrealized gains and losses, which although they represent a part of the Company's recurring operations, are subject to significant variability and are generally limited to a potential indicator of future economic performance; (ii) incentive compensation paid to the Company's manager; (iii) non-capitalized transaction-related expenses; and (iv) deferred taxes, which are not representative of current operations.

The Company's definition of core earnings includes accretion on held-for-sale loans as if they continued to be held-for-investment. Although the Company intends to sell such loans, there is no guarantee that such loans will be sold or that they will be sold within any expected timeframe. During the period prior to sale, the Company continues to receive cash flows from such loans and believes that it is appropriate to record a yield thereon. In addition, the Company's definition of core earnings excludes all deferred taxes, rather than just deferred taxes related to unrealized gains or losses, because the Company believes deferred taxes are not representative of current operations. The Company's definition of core earnings also limits accreted interest income on RMBS where the Company receives par upon the exercise of associated call rights based on the estimated value of the underlying collateral, net of related costs including advances. The Company created this limit in order to be able to accrete to the lower of par or the net value of the underlying collateral, in instances where the net value of the underlying collateral is lower than par. The Company believes this amount represents the amount of accretion the Company would have expected to earn on such bonds had the call rights not been exercised.

Beginning January 1, 2020, the Company's investments in consumer loans are accounted for under the fair value option. Core earnings adjusts earnings on consumer loans to a level yield to present income recognition across the consumer loan portfolio in the manner in which it is economically earned, to avoid potential delays in loss recognition, and align it with the Company's overall portfolio of mortgage-related assets which generally record income on a level yield basis. With respect to consumer loans classified as held-for-sale, the level yield is computed through the expected sale date. With respect to the gains recorded under GAAP in 2014 and 2016 as a result of a refinancing of, and the consolidation of, the debt related to the Company's investments in consumer loans, and the consolidation of entities that own the Company's investments in consumer loans, respectively, the Company continues to record a level yield on those assets based on their original purchase price.

While incentive compensation paid to the Company's manager may be a material operating expense, the Company excludes it from core earnings because (i) from time to time, a component of the computation of this expense will relate to items (such as gains or losses) that are excluded from core earnings, and (ii) it is impractical to determine the portion of the expense related to core earnings and non-core earnings, and the type of earnings (loss) that created an excess (deficit) above or below, as applicable, the incentive compensation threshold. To illustrate why it is impractical to determine the portion of incentive compensation expense that should be allocated to core earnings, the Company notes that, as an example, in a given period, it may have core earnings in excess of the incentive compensation threshold but incur losses (which are excluded from core earnings) that reduce total earnings below the incentive compensation threshold. In such case, the Company would either need to (a) allocate zero incentive compensation expense to core earnings, even though core earnings exceeded the incentive compensation threshold, or (b) assign a "pro forma" amount of incentive compensation expense to core earnings, even though no incentive compensation was actually incurred. The Company believes that neither of these allocation methodologies achieves a logical result. Accordingly, the exclusion of incentive compensation facilitates comparability between periods and avoids the distortion to the Company's non-GAAP operating measure that would result from the inclusion of incentive compensation that relates to non-core earnings.

With regard to non-capitalized transaction-related expenses, management does not view these costs as part of the Company's core operations, as they are considered by management to be similar to realized losses incurred at acquisition. Non-capitalized transaction-related expenses are generally legal and valuation service costs, as well as other professional service fees, incurred when the Company acquires certain investments, as well as costs associated with the acquisition and integration of acquired businesses.

Through its wholly owned subsidiaries, the Company originates conventional, government-insured and nonconforming residential mortgage loans for sale and securitization. In connection with the transfer of loans to the GSEs or mortgage investors, the Company reports realized gains or losses on the sale of originated residential mortgage loans and retention of mortgage servicing rights, which the Company believes is an indicator of performance for the Origination and Servicing segments and therefore included in core earnings. Realized gains or losses on the sale of originated residential mortgage loans had no impact on core earnings in any prior period, but may impact core earnings in future periods.

Core earnings includes results from operating companies with the exception of the unrealized gains or losses due to changes in valuation inputs and assumptions on MSRs, net of unrealized gains and losses on hedged MSRs, and non-capitalized transaction-related expenses.

Management believes that the adjustments to compute "core earnings" specified above allow investors and analysts to readily identify and track the operating performance of the assets that form the core of the Company's activity, assist in comparing the core operating results between periods, and enable investors to evaluate the Company's current core performance using the same measure that management uses to operate the business. Management also utilizes core earnings as a measure in its decision-making process relating to improvements to the underlying fundamental operations of the Company's investments, as well as the allocation of resources between those investments, and management also relies on core earnings as an indicator of the results of such decisions. Core earnings excludes certain recurring items, such as gains and losses (including impairment and reserves as well as derivative activities) and non-capitalized transaction-related expenses, because they are not considered by management to be part of the Company's core operations for the reasons described herein. As such, core earnings is not intended to reflect all of the Company's activity and should be considered as only one of the factors used by management in assessing the Company's performance, along with GAAP net income which is inclusive of all of the Company's activities.

The primary differences between core earnings and the measure the Company uses to calculate incentive compensation relate to (i) realized gains and losses (including impairments and reserves for expected credit losses), (ii) non-capitalized transaction-related expenses and (iii) deferred taxes (other than those related to unrealized gains and losses). Each are excluded from core earnings and included in the Company's incentive compensation measure (either immediately or through amortization). In addition, the Company's incentive compensation measure does not include accretion on held-for-sale loans and the timing of recognition of income from consumer loans is different. Unlike core earnings, the Company's incentive compensation measure is intended to reflect all realized results of operations.

Core earnings does not represent and should not be considered as a substitute for, or superior to, net income or as a substitute for, or superior to, cash flows from operating activities, each as determined in accordance with U.S. GAAP, and the Company's calculation of this measure may not be comparable to similarly entitled measures reported by other companies. Set forth below is a reconciliation of core earnings to the most directly comparable GAAP financial measure (dollars in thousands, except share and per share data):

                                                                                               Three Months Ended                                                                                 Nine Months Ended
                                                                            ----------------------------------------------------------------------------------------                            ------------------------------------------------------------------------------------------
                                                                     September 30,                          June 30, 2021                          September 30,                           September 30,
                                                                                            2021                                                                                                                2021                                                       2020
                                                                            ----------------------------------                        ----------------------------------                        ----------------------------------                        ------------------------------------
                                                                            $       146,147     $       121,315     $       545,046     $      (1,533,262 )
  Net income (loss) attributable to common stockholders
                                                                                                                                         
  Adjustments for Non-Core Earnings:
                                                                                      6,378             (34,408 )                              (47,637 )                                133,670  
      Impairment
                                                                                   (116,241 )                              (98,766 )                             (490,426 )                                724,364  
      Change in fair value of investments
                                                                                    144,690             120,212             296,237               986,921  
      (Gain) loss on settlement of investments, net
                                                                                    (21,007 )                               14,226              17,558               111,596  
      Other (income) loss, net
                                                                                     (2,071 )                               (1,473 )                               (8,055 )                                 (7,307 )
      Other income and impairment attributable to non-controlling interests
                                                                                     15,109               9,905              35,637                48,892  
      Non-capitalized transaction-related expenses
                                                                                      3,281               3,048               9,377                 8,391  
      Preferred stock management fee to affiliate
                                                                                     27,331               6,965             119,526               (42,266 )
      Deferred taxes
                                                                                      6,153               7,073              20,796                30,146  
      Interest income on residential mortgage loans, held-for-sale
                                                                             --      --      --                (1,147 )
      Adjust consumer loans to level yield
                                                                                                                                         
  Core earnings of equity method investees:
                                                                                        127              (1,463 )                                3,240                10,210  
      Excess mortgage servicing rights
                                                                            --------------  --------------------                      --------------  --------------------                      --------------  --------------------                      ----------------  --------------------
                                                                            $       209,897     $       146,634     $       501,299     $         470,208  
  Core earnings
                                                                            ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ====== ========== ====================
                                                                                                                      
                                                                            $          0.30     $          0.26     $          1.18     $           (3.69 )
  Net income (loss) per diluted share
                                                                            $          0.44     $          0.31     $          1.09     $            1.13  
  Core earnings per diluted share
                                                                                                                      

NET INCOME BY SEGMENT

During the quarter ended September 30, 2021, due to the Caliber acquisition, New Residential reevaluated the composition of its reportable segments based on the significance of certain business activities to its operations and performance evaluation, which drive resource allocation. Based on this reevaluation, MSR assets serviced by Newrez (previously reflected within the MSR Related Segment) and Caliber, representing $385 billion UPB as of September 30, 2021, are reflected within Servicing. MSRs owned by third-parties but serviced by the Company's subsidiaries, representing $75 billion as of September 30, 2021, are also reflected within Servicing. MSR assets sub-serviced by third-parties (PHH Mortgage Corporation, LoanCare LLC, Flagstar Bank and Mr. Cooper), representing $164 billion UPB as of September 30, 2021, continue to be reflected as part of the MSR Related Investments. Segment information for prior periods have been restated to reflect this change.

                                                                                                                                Origination and Servicing                                                                                                             Residential Securities,                                                                         
                                                                                                                                                                                                                                                                                                                                Properties and Loans
                                                                                                      ----------------------------------------------------------------------------------------------------------------------------------------------                                ------------------------------------------------------------------------------------------------------
Third Quarter 2021                                                                              Origination                             Servicing                               MSRs &                                   Residential                                   Properties                                    Corporate &                                  Total
                                                                                                                                                                                                                                        Servicer                                                    Securities &                                                          and                                                             Other
                                                                                                                                                                                                                                        Advances                                                     Call Rights                                                      Residential
                                                                                                                                                                                                                                                                                                                                                                         Loans
--------------------------------------------------------------------------------                      ----------------------------------                        ----------------------------------                        ----------------------------------                        -----------------------------------------                        -----------------------------------------                        -----------------------------------------                        ---------------------------------
                                                                                   $        (6,451 )                      $       257,520     $       147,576     $       --     $       --     $       --     $      398,645  
   Servicing fee revenue, net and interest income from MSR financing receivables
                                                                                    --            (118,941 )                              (76,682 )                              --             --             --           (195,623 )
   Change in fair value of MSRs and MSR financing receivables
                                                                                                      --------------  --------------------                      --------------  --------------------                      --------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      -------------  --------------------
Servicing revenue, net                                                                      (6,451 )                              138,579              70,894             --             --             --            203,022  
Interest income                                                                             54,851              (2,729 )                               11,385                     52,489                     37,490                     37,147            190,633  
Gain on originated mortgage loans, held-for-sale, net                                      510,740              28,292               3,437                     15,276                      9,016             --            566,761  
                                                                                                      --------------  -------------------- -------------------- --------------  -------------------- -------------------- --------------  -------------------- -------------------- ---------------------  -------------------- -------------------- ---------------------  -------------------- -------------------- ---------------------  -------------------- -------------------- -------------  --------------------
                                                                                           559,140             164,142              85,716                     67,765                     46,506                     37,147            960,416  
   Total revenues
Interest expense                                                                            37,775              43,199               7,499                      9,365                     19,680                     12,410            129,928  
G&A and other                                                                              344,198             102,602              87,927                      1,753                     23,901                     33,550            593,931  
                                                                                                      --------------  --------------------                      --------------  --------------------                      --------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      -------------  --------------------
                                                                                           381,973             145,801              95,426                     11,118                     43,581                     45,960            723,859  
   Total operating expenses
Change in fair value of investments                                                 --      --              (7,675 )                                      50,927                    (26,432 )                                      (5,708 )                              11,112  
Gain (loss) on settlement of investments, net                                       --                (989 )                               (1,295 )                                    (130,066 )                                      34,033             --            (98,317 )
Other income (loss), net                                                                       368                 (11 )                               41,848             --                     17,641                       (580 )                              59,266  
                                                                                                      --------------  --------------------                      --------------  --------------------                      --------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      -------------  --------------------
                                                                                               368              (1,000 )                               32,878                    (79,139 )                                      25,242                     (6,288 )                             (27,939 )
   Total other income (loss)
Impairment                                                                          --      --      --                     (2,370 )                                       8,748             --              6,378  
                                                                                                      --------------  --------------------                      --------------  --------------------                      --------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      -------------  --------------------
Income (loss) before income taxes                                                          177,535              17,341              23,168                    (20,122 )                                      19,419                    (15,101 )                             202,240  
Income tax expense (benefit)                                                                32,322              (3,125 )                               (8,372 )                              --                     10,735                         (1 )                              31,559  
                                                                                                      --------------  --------------------                      --------------  --------------------                      --------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      -------------  --------------------
                                                                                           145,213              20,466              31,540                    (20,122 )                                       8,684                    (15,100 )                             170,681  
   Net income (loss)
                                                                                                      --------------  --------------------                      --------------  --------------------                      --------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      -------------  --------------------
Noncontrolling interests in income (loss) of consolidated subsidiaries                       3,032      --                (280 )                              --             --                      6,249              9,001  
Dividends on preferred stock                                                        --      --      --             --             --                     15,533             15,533  
                                                                                                      --------------  --------------------                      --------------  --------------------                      --------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      -------------  --------------------
                                                                                                                                 Origination and Servicing                                                                                                             Residential Securities,                                                                         
                                                                                                                                                                                                                                                                                                                                 Properties and Loans
                                                                                                      -----------------------------------------------------------------------------------------------------------------------------------------------                                ------------------------------------------------------------------------------------------------------
Second Quarter 2021                                                                             Origination                              Servicing                               MSRs &                                   Residential                                   Properties                                    Corporate &                                  Total
                                                                                                                                                                                                                                         Servicer                                                    Securities &                                                          and                                                             Other
                                                                                                                                                                                                                                         Advances                                                     Call Rights                                                      Residential
                                                                                                                                                                                                                                                                                                                                                                          Loans
--------------------------------------------------------------------------------                      ----------------------------------                        -----------------------------------                        ----------------------------------                        -----------------------------------------                        -----------------------------------------                        -----------------------------------------                        ---------------------------------
                                                                                   $        (5,077 )                      $        219,070     $       174,865     $       --     $       --     $       --     $      388,858  
   Servicing fee revenue, net and interest income from MSR financing receivables
                                                                                    --             (216,376 )                             (201,607 )                              --             --             --           (417,983 )
   Change in fair value of MSRs and MSR financing receivables
                                                                                                      --------------  --------------------                      ---------------  --------------------                      --------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      -------------  --------------------
Servicing revenue, net                                                                      (5,077 )                                 2,694             (26,742 )                              --             --             --            (29,125 )
Interest income                                                                             31,262               11,316               3,000                     97,960                     33,294                     24,930            201,762  
Gain on originated mortgage loans, held-for-sale, net                                      268,539               12,794              (7,636 )                                      (3,638 )                                      16,826             --            286,885  
                                                                                                      --------------  --------------------                      ---------------  --------------------                      --------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      -------------  --------------------
                                                                                           294,724               26,804             (31,378 )                                  94,322                 94,322                     50,120                     24,930            459,522  
   Total revenues
Interest expense                                                                            18,960               40,902               3,702                     13,630                     17,463                     11,882            106,539  
G&A and other                                                                              200,551               86,956              82,806                      1,034                     20,968                     31,760            424,075  
                                                                                                      --------------  --------------------                      ---------------  --------------------                      --------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      -------------  --------------------
                                                                                           219,511              127,858              86,508                     14,664                     38,431                     43,642            530,614  
   Total operating expenses
Change in fair value of investments                                                 --       --              (9,281 )                                     119,565                    121,242                     (1,626 )                             229,900  
Gain (loss) on settlement of investments, net                                       --              (30,318 )                               29,579                    (76,270 )                                      (1,254 )                                        (348 )                             (78,611 )
Other income (loss), net                                                                       138       --               7,660             --                     18,206                      4,040             30,044  
                                                                                                      --------------  --------------------                      ---------------  --------------------                      --------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      -------------  --------------------
                                                                                               138              (30,318 )                               27,958                     43,295                    138,194                      2,066            181,333  
   Total other income (loss)
Impairment                                                                          --       --      --                     (1,756 )                                     (32,652 )                              --            (34,408 )
                                                                                                      --------------  --------------------                      ---------------  --------------------                      --------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      -------------  --------------------
Income (loss) before income taxes                                                           75,351             (131,372 )                              (89,928 )                                     124,709                    182,535                    (16,646 )                             144,649  
Income tax expense (benefit)                                                                19,030              (15,447 )                              (21,969 )                              --                     17,288                         21             (1,077 )
                                                                                                      --------------  --------------------                      ---------------  --------------------                      --------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      -------------  --------------------
                                                                                            56,321             (115,925 )                              (67,959 )                                     124,709                    165,247                    (16,667 )                             145,726  
   Net income (loss)
                                                                                                      --------------  --------------------                      ---------------  --------------------                      --------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      -------------  --------------------
Noncontrolling interests in income (loss) of consolidated subsidiaries                       3,225       --              (1,825 )                              --             --                      8,653             10,053  
Dividends on preferred stock                                                        --       --      --             --             --                     14,358             14,358  
                                                                                                      --------------  --------------------                      ---------------  --------------------                      --------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      ---------------------  --------------------                      -------------  --------------------
                                                                                   $        53,096     $       (115,925 )                      $       (66,134 )                      $              124,709     $              165,247     $              (39,678 )                      $      121,315  
   Net income (loss) attributable to common stockholders
                                                                                                      ======= ======= ====================                      ======= ======== ====================                      ======= ======= ====================                      ======= ============== ====================                      ======= ============== ====================                      ======= ============== ====================                      ====== ======= ====================

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain information in this press release constitutes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, our ability to complete the acquisition of Genesis Capital LLC on a timely basis, or at all, ability to further our ability to create, retain and manage strong assets for our balance sheet, ability to increase scale, efficiency, recapture, servicing and origination leadership, ability to successfully integrate the businesses and realize the anticipated benefits of the Caliber acquisition, our estimated Newrez and Caliber fourth quarter 2021 Funded Origination Value and Servicing Portfolio UPB, and ability to generate and drive earnings for our shareholders. These statements are not historical facts. They represent management's current expectations regarding future events and are subject to a number of trends and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those described in the forward-looking statements. Accordingly, you should not place undue reliance on any forward-looking statements contained herein. For a discussion of some of the risks and important factors that could affect such forward-looking statements, see the sections entitled "Cautionary Statements Regarding Forward Looking Statements," "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's most recent annual and quarterly reports and other filings filed with the U.S. Securities and Exchange Commission, which are available on the Company's website (www.newresi.com). New risks and uncertainties emerge from time to time, and it is not possible for New Residential to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Forward-looking statements contained herein speak only as of the date of this press release, and New Residential expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in New Residential's expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.

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 complementary portfolio of investments and operating businesses. Since inception in 2013, New Residential has delivered over $3.8 billion in dividends to shareholders. New Residential's investment portfolio is composed of mortgage servicing related assets (full and excess MSRs and servicer advances), residential securities (and associated called rights) and loans (including single family rental), and consumer loans. New Residential's investments in operating entities include leading origination and servicing platforms through wholly-owned subsidiaries, Newrez LLC and Caliber Home Loans, Inc., as well as investments in affiliated businesses that provide mortgage related services. New Residential is organized and conducts its operations to qualify as a real estate investment trust (REIT) for federal income tax purposes and is managed by an affiliate of Fortress Investment Group LLC, a global investment management firm, and headquartered in New York City.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211102005646/en/

SOURCE: New Residential Investment Corp.

Investor Relations 
Kaitlyn Mauritz
Head of Investor Relations
212-479-3150
IR@NewResi.com
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