UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
x  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended June 30, 2017
 
or
 
¨  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from ________________to________________
 
Commission File Number: 001-35777
New Residential Investment Corp.
(Exact name of registrant as specified in its charter)
Delaware
 
45-3449660
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer Identification No.)
 
 
 
1345 Avenue of the Americas, New York, NY
 
10105
(Address of principal executive offices)
 
(Zip Code)
 
(212) 798-3150
(Registrant’s telephone number, including area code)
 
(Former name, former address and former fiscal year, if changed since last report) 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x    No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x    No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer x  Accelerated filer ¨ Non-accelerated filer ¨ (Do not check if a smaller reporting company) 
Smaller reporting company ¨     Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨    No x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the last practicable date.
Common stock, $0.01 par value per share: 307,361,309 shares outstanding as of July 27, 2017.




CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
 
This report contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which statements involve substantial risks and uncertainties. Such forward-looking statements relate to, among other things, the operating performance of our investments, the stability of our earnings, our financing needs and the size and attractiveness of market opportunities. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “may,” “will,” “should,” “potential,” “intend,” “expect,” “endeavor,” “seek,” “anticipate,” “estimate,” “overestimate,” “underestimate,” “believe,” “could,” “project,” “predict,” “continue” or other similar words or expressions. Forward-looking statements are based on certain assumptions, discuss future expectations, describe future plans and strategies, contain projections of results of operations, cash flows or financial condition or state other forward-looking information. Our ability to predict results or the actual outcome of future plans or strategies is inherently uncertain. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth in the forward-looking statements. These forward-looking statements involve risks, uncertainties and other factors that may cause our actual results in future periods to differ materially from forecasted results. Factors which could have a material adverse effect on our operations and future prospects include, but are not limited to:
 
reductions in cash flows received from our investments;
the quality and size of the investment pipeline and our ability to take advantage of investment opportunities at attractive risk-adjusted prices;
Servicer Advances may not be recoverable or may take longer to recover than we expect, which could cause us to fail to achieve our targeted return on our investment in Servicer Advances;
our ability to deploy capital accretively and the timing of such deployment;
our counterparty concentration and default risks in Nationstar, Ocwen, OneMain, Ditech, PHH and other third parties;
events, conditions or actions that might occur at Nationstar, Ocwen, OneMain, Ditech, PHH and other third parties;
a lack of liquidity surrounding our investments, which could impede our ability to vary our portfolio in an appropriate manner;
the impact that risks associated with subprime mortgage loans and consumer loans, as well as deficiencies in servicing and foreclosure practices, may have on the value of our MSRs, Excess MSRs, Servicer Advances, RMBS and loan portfolios;
the risks that default and recovery rates on our MSRs, Excess MSRs, Servicer Advances, real estate securities, residential mortgage loans and consumer loans deteriorate compared to our underwriting estimates;
changes in prepayment rates on the loans underlying certain of our assets, including, but not limited to, our MSRs or Excess MSRs;
the risk that projected recapture rates on the loan pools underlying our MSRs or Excess MSRs are not achieved;
the relationship between yields on assets which are paid off and yields on assets in which such monies can be reinvested;
the relative spreads between the yield on the assets in which we invest and the cost of financing;
changes in economic conditions generally and the real estate and bond markets specifically;
adverse changes in the financing markets we access affecting our ability to finance our investments on attractive terms, or at all;
changing risk assessments by lenders that potentially lead to increased margin calls, not extending our repurchase agreements or other financings in accordance with their current terms or not entering into new financings with us;
changes in interest rates and/or credit spreads, as well as the success of any hedging strategy we may undertake in relation to such changes;
impairments in the value of the collateral underlying our investments and the relation of any such impairments to our judgments as to whether changes in the market value of our securities or loans are temporary or not and whether circumstances bearing on the value of such assets warrant changes in carrying values;
the availability and terms of capital for future investments;
competition within the finance and real estate industries;




the legislative/regulatory environment, including, but not limited to, the impact of the Dodd-Frank Act, U.S. government programs intended to stabilize the economy, the federal conservatorship of Fannie Mae and Freddie Mac and legislation that permits modification of the terms of residential mortgage loans;
our ability to maintain our qualification as a real estate investment trust (“REIT”) for U.S. federal income tax purposes and the potentially onerous consequences that any failure to maintain such qualification would have on our business;
our ability to maintain our exclusion from registration under the Investment Company Act of 1940 (the “1940 Act”) and the fact that maintaining such exclusion imposes limits on our operations;
the risks related to HLSS liabilities that we have assumed;
the impact of current or future legal proceedings and regulatory investigations and inquiries;
the impact of any material transactions with FIG LLC (the “Manager”) or one of its affiliates, including the impact of any actual, potential or perceived conflicts of interest;
effects of the pending merger of Fortress Investment Group LLC with affiliates of SoftBank Group Corp.; and
the risk that GSE or other regulatory initiatives or actions may adversely affect returns from investments in MSRs and Excess MSRs.

We also direct readers to other risks and uncertainties referenced in this report, including those set forth under “Risk Factors.” We caution that you should not place undue reliance on any of our forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise from time to time, and it is impossible for us to predict those events or how they may affect us. Except as required by law, we are under no obligation (and expressly disclaim any obligation) to update or alter any forward-looking statement, whether written or oral, that we may make from time to time, whether as a result of new information, future events or otherwise.
 




SPECIAL NOTE REGARDING EXHIBITS
 
In reviewing the agreements included as exhibits to this Quarterly Report on Form 10-Q, please remember they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about New Residential Investment Corp. (the “Company,” “New Residential” or “we,” “our” and “us”) or the other parties to the agreements. The agreements contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:
 
should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements proved to be inaccurate;
have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;
may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and
were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about the Company may be found elsewhere in this Quarterly Report on Form 10-Q and the Company’s other public filings, which are available without charge through the SEC’s website at http://www.sec.gov.
 
The Company acknowledges that, notwithstanding the inclusion of the foregoing cautionary statements, it is responsible for considering whether additional specific disclosures of material information regarding material contractual provisions are required to make the statements in this report not misleading.
 




NEW RESIDENTIAL INVESTMENT CORP.
FORM 10-Q
 
INDEX
 
PAGE
Part I. Financial Information
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    General
 
 
 
 
 
 
 
 
 
 
 
 




 
 
 
 
 
 
 
 
    Inflation
 
 
 
 
 
 
 
 
Part II. Other Information
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




PART I. FINANCIAL INFORMATION
 
ITEM 1. FINANCIAL STATEMENTS
 
NEW RESIDENTIAL INVESTMENT CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
 
June 30, 2017
 
December 31, 2016
 
(Unaudited)
 
Assets
 
 
 
Investments in:
 
 
 
Excess mortgage servicing rights, at fair value
$
1,304,666

 
$
1,399,455

Excess mortgage servicing rights, equity method investees, at fair value
181,610

 
194,788

Mortgage servicing rights, at fair value
1,749,343

 
659,483

Mortgage servicing rights financing receivable, at fair value
118,483

 

Servicer advances, at fair value(A)
4,836,754

 
5,706,593

Real estate securities, available-for-sale
7,423,273

 
5,073,858

Residential mortgage loans, held-for-investment
757,421

 
190,761

Residential mortgage loans, held-for-sale(A)
1,001,472

 
696,665

Real estate owned
95,492

 
59,591

Consumer loans, held-for-investment(A)
1,569,388

 
1,799,486

Consumer loans, equity method investees
45,036

 

Cash and cash equivalents(A)
560,016

 
290,602

Restricted cash
157,344

 
163,095

Trades receivable
2,677,542

 
1,687,788

Deferred tax asset, net
65,678

 
151,284

Other assets
456,497

 
326,080

 
$
23,000,015

 
$
18,399,529

 
 
 
 
Liabilities and Equity
 
 
 
 
 
 
 
Liabilities
 
 
 
Repurchase agreements
$
8,261,398

 
$
5,190,631

Notes and bonds payable(A)
7,787,782

 
7,990,605

Trades payable
1,814,344

 
1,381,968

Due to affiliates
64,813

 
47,348

Dividends payable
153,678

 
115,356

Accrued expenses and other liabilities
299,042

 
205,444

 
18,381,057

 
14,931,352

 
 
 
 
Commitments and Contingencies


 


 
 
 
 
Equity
 
 
 
Common Stock, $0.01 par value, 2,000,000,000 shares authorized, 307,361,309 and 250,773,117 issued and outstanding at June 30, 2017 and December 31, 2016, respectively
3,074

 
2,507

Additional paid-in capital
3,756,016

 
2,920,730

Retained earnings
352,414

 
210,500

Accumulated other comprehensive income (loss)
313,300

 
126,363

Total New Residential stockholders’ equity
4,424,804

 
3,260,100

Noncontrolling interests in equity of consolidated subsidiaries
194,154

 
208,077

Total Equity
4,618,958

 
3,468,177

 
$
23,000,015

 
$
18,399,529


1



NEW RESIDENTIAL INVESTMENT CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS, CONTINUED
(dollars in thousands)

(A)
New Residential’s Condensed Consolidated Balance Sheets include the assets and liabilities of certain consolidated VIEs, the Buyer (Note 6), the RPL Borrowers (Note 8), and the Consumer Loan SPVs (Note 9), which primarily hold investments in Servicer Advances, residential mortgage loans, and consumer loans, respectively, financed with notes and bonds payable. The balance sheets of the Buyer, the RPL Borrowers and the Consumer Loan SPVs are included in Notes 6, 8 and 9, respectively. The creditors of the Buyer, the RPL Borrowers, and the Consumer Loan SPVs do not have recourse to the general credit of New Residential and the assets of the Buyer, the RPL Borrowers, and the Consumer Loan SPVs are not directly available to satisfy New Residential’s obligations.

See notes to condensed consolidated financial statements.

2



NEW RESIDENTIAL INVESTMENT CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands, except per share data)
 
 
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
 
2017
 
2016
 
2017
 
2016
Interest income
$
471,952

 
$
277,477

 
$
764,490

 
$
467,513

Interest expense
115,157

 
100,685

 
213,386

 
181,913

Net Interest Income
356,795

 
176,792

 
551,104

 
285,600

 
 
 
 
 
 
 
 
Impairment
 
 
 
 
 
 
 
Other-than-temporary impairment (OTTI) on securities
5,115

 
2,819

 
7,227

 
6,073

Valuation and loss provision on loans and real estate owned
20,771

 
16,825

 
38,681

 
23,570

 
25,886

 
19,644

 
45,908

 
29,643

 
 
 
 
 
 
 
 
Net interest income after impairment
330,909

 
157,148

 
505,196

 
255,957

Servicing revenue, net
170,851

 

 
211,453

 

Other Income
 
 
 
 
 
 
 
Change in fair value of investments in excess mortgage servicing rights
(19,180
)
 
(15,263
)
 
(18,359
)
 
(7,337
)
Change in fair value of investments in excess mortgage servicing rights, equity method investees
4,246

 
(675
)
 
4,002

 
2,347

Change in fair value of investments in mortgage servicing rights financing receivable
5,596

 

 
5,596

 

Change in fair value of investments in servicer advances
56,969

 
13,946

 
59,528

 
(17,278
)
Gain on consumer loans investment

 

 

 
9,943

Gain on remeasurement of consumer loans investment

 

 

 
71,250

Gain (loss) on settlement of investments, net
13,371

 
(14,271
)
 
(303
)
 
(26,517
)
Earnings from investments in consumer loans, equity method investees
5,880

 

 
5,880

 

Other income (loss), net
(9,035
)
 
(3,460
)
 
(2,191
)
 
(20,209
)
 
57,847

 
(19,723
)
 
54,153

 
12,199

 
 
 
 
 
 
 
 
Operating Expenses
 
 
 
 
 
 
 
General and administrative expenses
16,042

 
7,224

 
27,869

 
19,305

Management fee to affiliate
14,186

 
10,008

 
27,260

 
20,016

Incentive compensation to affiliate
40,172

 
4,929

 
52,632

 
6,125

Loan servicing expense
13,002

 
14,119

 
26,378

 
15,850

Subservicing expense
55,958

 

 
73,662

 

 
139,360

 
36,280

 
207,801

 
61,296

 
 
 
 
 
 
 
 
Income Before Income Taxes
420,247

 
101,145

 
563,001

 
206,860

Income tax expense (benefit)
82,844

 
7,518

 
88,440

 
(2,705
)
Net Income
$
337,403

 
$
93,627

 
$
474,561

 
$
209,565

Noncontrolling Interests in Income of Consolidated Subsidiaries
$
15,671

 
$
24,975

 
$
31,451

 
$
29,177

Net Income Attributable to Common Stockholders
$
321,732

 
$
68,652

 
$
443,110

 
$
180,388

 
 
 
 
 
 
 
 
Net Income Per Share of Common Stock
 
 
 
 
 
 
 
Basic
$
1.05

 
$
0.30

 
$
1.49

 
$
0.78

Diluted
$
1.04

 
$
0.30

 
$
1.48

 
$
0.78

 
 
 
 
 
 
 
 
Weighted Average Number of Shares of Common Stock Outstanding
 
 
 
 
 
 
 
Basic
307,344,874

 
230,478,390

 
297,029,904

 
230,474,796

Diluted
309,392,512

 
230,839,753

 
298,875,279

 
230,689,233

 
 
 
 
 
 
 
 
Dividends Declared per Share of Common Stock
$
0.50

 
$
0.46

 
$
0.98

 
$
0.92

 
See notes to condensed consolidated financial statements.


3



NEW RESIDENTIAL INVESTMENT CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
(dollars in thousands)
 
 
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
 
2017
 
2016
 
2017
 
2016
Comprehensive income (loss), net of tax
 
 
 
 
 
 
 
Net income
$
337,403

 
$
93,627

 
$
474,561

 
$
209,565

Other comprehensive income (loss)
 
 
 
 
 
 
 
Net unrealized gain (loss) on securities
170,322

 
60,510

 
201,960

 
56,541

Reclassification of net realized (gain) loss on securities into earnings
(16,142
)
 
3,201

 
(15,023
)
 
(9,678
)
 
154,180

 
63,711

 
186,937

 
46,863

Total comprehensive income
$
491,583

 
$
157,338

 
$
661,498

 
$
256,428

Comprehensive income attributable to noncontrolling interests
$
15,671

 
$
24,975

 
$
31,451

 
$
29,177

Comprehensive income attributable to common stockholders
$
475,912

 
$
132,363

 
$
630,047

 
$
227,251

 
See notes to condensed consolidated financial statements.


4



NEW RESIDENTIAL INVESTMENT CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED) 
FOR THE SIX MONTHS ENDED JUNE 30, 2017
(dollars in thousands)
 
 
Common Stock
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares
 
Amount
 
Additional Paid-in Capital
 
Retained Earnings
 
Accumulated Other Comprehensive Income
 
Total New Residential Stockholders’ Equity
 
Noncontrolling
Interests in Equity of Consolidated Subsidiaries
 
Total Equity
Equity - December 31, 2016
250,773,117

 
$
2,507

 
$
2,920,730

 
$
210,500

 
$
126,363

 
$
3,260,100

 
$
208,077

 
$
3,468,177

Dividends declared

 

 

 
(301,196
)
 

 
(301,196
)
 

 
(301,196
)
Capital contributions

 

 

 

 

 

 

 

Capital distributions

 

 

 

 

 

 
(45,374
)
 
(45,374
)
Issuance of common stock
56,545,787

 
566

 
833,963

 

 

 
834,529

 

 
834,529

Other dilution

 

 
625

 

 

 
625

 

 
625

Director share grants
42,405

 
1

 
698

 

 

 
699

 

 
699

Comprehensive income (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)

 

 

 
443,110

 

 
443,110

 
31,451

 
474,561

Net unrealized gain (loss) on securities

 

 

 

 
201,960

 
201,960

 

 
201,960

Reclassification of net realized (gain) loss on securities into earnings

 

 

 

 
(15,023
)
 
(15,023
)
 

 
(15,023
)
Total comprehensive income (loss)
 
 
 
 
 
 
 
 
 
 
630,047

 
31,451

 
661,498

Equity - June 30, 2017
307,361,309

 
$
3,074

 
$
3,756,016

 
$
352,414

 
$
313,300

 
$
4,424,804

 
$
194,154


$
4,618,958

 
See notes to condensed consolidated financial statements.


5


NEW RESIDENTIAL INVESTMENT CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(dollars in thousands)
 
Six Months Ended  
 June 30,
 
2017
 
2016
Cash Flows From Operating Activities
 
 
 
Net income
$
474,561

 
$
209,565

Adjustments to reconcile net income to net cash provided by (used in) operating activities:
 
 
 
Change in fair value of investments in excess mortgage servicing rights
18,359

 
7,337

Change in fair value of investments in excess mortgage servicing rights, equity method investees
(4,002
)
 
(2,347
)
Change in fair value of investments in mortgage servicing rights financing receivable
(5,596
)
 

Change in fair value of investments in servicer advances
(59,528
)
 
17,278

(Gain) / loss on remeasurement of consumer loans investment

 
(71,250
)
(Gain) / loss on settlement of investments (net)
303

 
26,517

Earnings from investments in consumer loans, equity method investees
(5,880
)
 

Unrealized (gain) / loss on derivative instruments
3,684

 
36,160

Unrealized (gain) / loss on other ABS
(151
)
 
950

(Gain) / loss on transfer of loans to REO
(11,612
)
 
(10,287
)
(Gain) / loss on transfer of loans to other assets
(293
)
 
(861
)
(Gain) / loss on Excess MSR recapture agreements
(1,342
)
 
(1,420
)
Accretion and other amortization
(545,386
)
 
(331,915
)
Other-than-temporary impairment
7,227

 
6,073

Valuation and loss provision on loans and real estate owned
38,681

 
23,570

Non-cash portions of servicing revenue, net
1,618

 

Non-cash directors’ compensation
698

 
300

Deferred tax provision
85,606

 
(4,131
)
Changes in:
 
 
 
Other assets
(25,621
)
 
39,664

Servicer advances receivable
(7,780
)
 

Due to affiliates
17,465

 
(11,802
)
Accrued expenses and other liabilities
12,985

 
29,271

Other operating cash flows:
 
 
 
Interest received from excess mortgage servicing rights
32,174

 
82,163

Interest received from servicer advance investments
96,639

 
94,870

Interest received from Non-Agency RMBS
118,339

 
50,074

Interest received from residential mortgage loans, held-for-investment
3,097

 
2,815

Interest received from PCD consumer loans, held-for-investment
28,262

 
18,567

Distributions of earnings from investments in excess mortgage servicing rights, equity method investees
7,433

 
15,532

Distributions of earnings from investments in consumer loans, equity method investees
1,229

 

Purchases of residential mortgage loans, held-for-sale
(3,193,841
)
 
(469,665
)
Proceeds from sales of purchased residential mortgage loans, held-for-sale
2,523,335

 
519,615

Principal repayments from purchased residential mortgage loans, held-for-sale
45,867

 
64,963

Net cash provided by (used in) operating activities
(343,470
)
 
341,606


Continued on next page.

6


NEW RESIDENTIAL INVESTMENT CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED), CONTINUED
(dollars in thousands)
 
Six Months Ended  
 June 30,
 
2017
 
2016
Cash Flows From Investing Activities
 
 
 
Acquisition of investments in excess mortgage servicing rights

 
(2,022
)
SpringCastle Transaction, net of cash acquired

 
(49,943
)
Restricted cash acquired from SpringCastle transaction

 
74,604

Purchase of servicer advance investments
(6,341,861
)
 
(7,814,541
)
Purchase of MSRs and Servicer Advances
(1,177,658
)
 

Purchase of Agency RMBS
(4,561,503
)
 
(3,227,130
)
Purchase of Non-Agency RMBS
(1,826,031
)
 
(1,273,231
)
Purchase of residential mortgage loans
(586,154
)
 
(319
)
Purchase of derivatives

 
(4,457
)
Purchase of real estate owned and other assets
(19,168
)
 
(9,602
)
Purchase of investment in consumer loans, equity method investees
(192,467
)
 

Draws on revolving consumer loans
(27,240
)
 
(16,483
)
Payments for settlement of derivatives
(98,399
)
 
(52,612
)
Return of investments in excess mortgage servicing rights
95,144

 
94,250

Return of investments in excess mortgage servicing rights, equity method investees
9,747

 
4,891

Return of investments in consumer loans, equity method investees
136,021

 

Principal repayments from servicer advance investments
7,491,101

 
8,772,662

Principal repayments from Agency RMBS
50,412

 
42,442

Principal repayments from Non-Agency RMBS
265,767

 
143,837

Principal repayments from residential mortgage loans
21,277

 
17,825

Principal repayments from consumer loans
212,883

 
100,751

Proceeds from sale of Agency RMBS
3,534,480

 
3,236,165

Proceeds from sale of Non-Agency RMBS
154,498

 
95,683

Proceeds from settlement of derivatives
44,764

 
5,445

Proceeds from sale of real estate owned
38,528

 
30,484

Net cash provided by (used in) investing activities
(2,775,859
)
 
168,699


Continued on next page.

7


NEW RESIDENTIAL INVESTMENT CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED), CONTINUED
(dollars in thousands)
 
 
Six Months Ended  
 June 30,
 
2017
 
2016
Cash Flows From Financing Activities
 
 
 
Repayments of repurchase agreements
(20,745,543
)
 
(12,026,068
)
Margin deposits under repurchase agreements and derivatives
(550,012
)
 
(182,666
)
Repayments of notes and bonds payable
(4,947,215
)
 
(4,474,167
)
Payment of deferred financing fees
(5,325
)
 
(37,144
)
Common stock dividends paid
(262,874
)
 
(212,034
)
Borrowings under repurchase agreements
23,815,777

 
12,605,745

Return of margin deposits under repurchase agreements and derivatives
547,290

 
160,055

Borrowings under notes and bonds payable
4,741,739

 
3,741,665

Issuance of common stock
835,465

 

Costs related to issuance of common stock
(936
)
 

Noncontrolling interest in equity of consolidated subsidiaries - contributions

 

Noncontrolling interest in equity of consolidated subsidiaries - distributions
(45,374
)
 
(28,441
)
Purchase of Noncontrolling Interest in the Buyer

 

Net cash provided by (used in) financing activities
3,382,992

 
(453,055
)
 
 
 
 
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash
263,663

 
57,250

 
 
 
 
Cash, Cash Equivalents, and Restricted Cash, Beginning of Period
453,697

 
344,638

 
 
 
 
Cash, Cash Equivalents, and Restricted Cash, End of Period
$
717,360

 
$
401,888

 
 
 
 
Supplemental Disclosure of Cash Flow Information
 
 
 
Cash paid during the period for interest
$
198,553

 
$
75,690

Cash paid during the period for income taxes
4,765

 
265

 
 
 
 
Supplemental Schedule of Non-Cash Investing and Financing Activities
 
 
 
Dividends declared but not paid
$
153,678

 
$
106,017

Purchase of Agency and Non-Agency RMBS, settled after quarter end
1,814,344

 
1,431,003

Sale of investments, primarily Agency RMBS, settled after quarter end
2,677,542

 
1,509,016

Transfer from residential mortgage loans to real estate owned and other assets
71,747

 
36,485

Non-cash distributions from Consumer Loan Companies

 
25

Non-cash distributions from LoanCo
16,062

 

Non-cash contingent consideration

 
5,581

MSR purchase price holdback
71,265

 

Real estate securities retained from loan securitizations
284,874

 
36,902

Remeasurement of Consumer Loan Companies noncontrolling interest

 
110,438

 
See notes to condensed consolidated financial statements.

8



NEW RESIDENTIAL INVESTMENT CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 2017
(dollars in tables in thousands, except share data) 
 

1. ORGANIZATION AND BASIS OF PRESENTATION
 
New Residential Investment Corp. (together with its subsidiaries, “New Residential”) is a Delaware corporation that was formed as a limited liability company in September 2011 for the purpose of making real estate related investments and commenced operations on December 8, 2011. On December 20, 2012, New Residential was converted to a corporation. Drive Shack Inc. (“Drive Shack”), formerly Newcastle Investment Corp., was the sole stockholder of New Residential until the spin-off, which was completed on May 15, 2013. Following the spin-off, New Residential is an independent publicly traded real estate investment trust (“REIT”) primarily focused on investing in residential mortgage related assets. New Residential is listed on the New York Stock Exchange (“NYSE”) under the symbol “NRZ.”
 
New Residential has elected and intends to qualify to be taxed as a REIT for U.S. federal income tax purposes. As such, New Residential will generally not be subject to U.S. federal corporate income tax on that portion of its net income that is distributed to stockholders if it distributes at least 90% of its REIT taxable income to its stockholders by prescribed dates and complies with various other requirements. See Note 17 regarding New Residential’s taxable REIT subsidiaries.
 
New Residential has entered into a management agreement (the “Management Agreement”) with FIG LLC (the “Manager”), an affiliate of Fortress Investment Group LLC (“Fortress”), pursuant to which the Manager provides a management team and other professionals who are responsible for implementing New Residential’s business strategy, subject to the supervision of New Residential’s board of directors. For its services, the Manager is entitled to management fees and incentive compensation, both defined in, and in accordance with the terms of, the Management Agreement. The Manager also manages Drive Shack, investment funds that indirectly own a majority of the outstanding interests in Nationstar Mortgage LLC (“Nationstar”), a leading residential mortgage servicer, and investment funds that own a majority of the outstanding common stock of OneMain Holdings, Inc. (formerly Springleaf Holdings, Inc.) (together with its subsidiaries, “OneMain”), former managing member of the Consumer Loan Companies (Note 9).
 
As of June 30, 2017, New Residential conducted its business through the following segments: (i) investments in excess mortgage servicing rights (“Excess MSRs”), (ii) investments in mortgage servicing rights (“MSRs”), (iii) investments in Servicer Advances (including the basic fee component of the related MSRs), (iv) investments in real estate securities, (v) investments in residential mortgage loans, (vi) investments in consumer loans and (vii) corporate.
 
Approximately 2.4 million shares of New Residential’s common stock were held by Fortress, through its affiliates, and its principals as of June 30, 2017. In addition, Fortress, through its affiliates, held options relating to approximately 16.1 million shares of New Residential’s common stock as of June 30, 2017.
 
Interim Financial Statements

The accompanying condensed consolidated financial statements and related notes of New Residential have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and note disclosures normally included in financial statements prepared under U.S. generally accepted accounting principles have been condensed or omitted. In the opinion of management, all adjustments considered necessary for a fair presentation of New Residential’s financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These condensed consolidated financial statements should be read in conjunction with New Residential’s consolidated financial statements for the year ended December 31, 2016 and notes thereto included in New Residential’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”). Capitalized terms used herein, and not otherwise defined, are defined in New Residential’s consolidated financial statements for the year ended December 31, 2016.
 
Certain prior period amounts have been reclassified to conform to the current period’s presentation.


9

NEW RESIDENTIAL INVESTMENT CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 2017
(dollars in tables in thousands, except share data) 
 

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenues from Contracts with Customers (Topic 606). The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In effect, companies will be required to exercise further judgment and make more estimates prospectively. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU No. 2014-09 is effective for New Residential in the first quarter of 2018. Early adoption is only permitted after December 31, 2016. Entities have the option of using either a full retrospective or a modified approach to adopt the guidance in ASU No. 2014-09. New Residential has evaluated the new guidance and determined that interest income, gains and losses on financial instruments and income from servicing residential mortgage loans are outside the scope of ASC No. 606. For income from servicing residential mortgage loans, New Residential considered that the FASB Transition Resource Group members generally agreed that an entity should look to ASC No. 860, Transfers and Servicing, to determine the appropriate accounting for these fees and ASC No. 606 contains a scope exception for contracts that fall under ASC No. 860. As a result, New Residential does not expect the adoption of ASU No. 2014-09 to have a material impact on its condensed consolidated financial statements.

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities. The standard: (i) requires that certain equity investments be measured at fair value, and modifies the assessment of impairment for certain other equity investments, (ii) changes certain disclosure requirements related to the fair value of financial instruments measured at amortized cost, (iii) changes certain disclosure requirements related to liabilities measured at fair value, (iv) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and (v) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. ASU No. 2016-01 is effective for New Residential in the first quarter of 2018. Early adoption is generally not permitted. An entity should apply ASU No. 2016-01 by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. New Residential does not expect the adoption of ASU No. 2016-01 to have a material impact on its condensed consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments. The standard requires that a financial asset measured at amortized cost basis be presented at the net amount expected to be collected, net of an allowance for all expected (rather than incurred) credit losses. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount. The standard also changes the accounting for purchased credit deteriorated assets and available-for-sale securities, which will require the recognition of credit losses through a valuation allowance when fair value is less than amortized cost, regardless of whether the impairment is considered to be other-than-temporary. ASU No. 2016-13 is effective for New Residential in the first quarter of 2020. Early adoption is permitted beginning in 2019. An entity should apply ASU No. 2016-13 by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. New Residential is currently evaluating the new guidance to determine the impact it may have on its condensed consolidated financial statements, which at the date of adoption is expected to increase the allowance for credit losses with a resulting negative adjustment to retained earnings.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments. The standard provides guidance on the treatment of certain transactions within the statement of cash flows. ASU No. 2016-15 is effective for New Residential in the first quarter of 2018. Early adoption is permitted. New Residential adopted ASU No. 2016-15 in the third quarter of 2016 and it did not have an impact on its condensed consolidated financial statements.

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740) - Intra-Entity Transfers of Assets Other Than Inventory. The standard requires recognition of the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. ASU No. 2016-16 is effective for New Residential in the first quarter of 2018. Early adoption is permitted as of the beginning of an annual reporting period for which financial statements have not been issued. New Residential does not expect the adoption of ASU No. 2016-16 to have a material impact on its condensed consolidated financial statements.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230) - Restricted Cash. The standard requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash. ASU No. 2016-18 is effective for New Residential in the first quarter of 2018. Early adoption

10

NEW RESIDENTIAL INVESTMENT CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 2017
(dollars in tables in thousands, except share data) 
 

is permitted. New Residential adopted ASU No. 2016-18 in the fourth quarter of 2016 and has included changes in restricted cash in its statements of cash flows for all periods presented.

2. OTHER INCOME, ASSETS AND LIABILITIES
 
Gain (loss) on settlement of investments, net is comprised of the following:
 
Three Months Ended 
 June 30,
 
Six Months Ended  
 June 30,
 
2017
 
2016
 
2017
 
2016
Gain (loss) on sale of real estate securities, net
$
21,257

 
$
(382
)
 
$
22,250

 
$
15,751

Gain (loss) on sale of residential mortgage loans, net
26,373

 
(1,672
)
 
28,938

 
605

Gain (loss) on settlement of derivatives
(27,734
)
 
(14,395
)
 
(39,570
)
 
(44,774
)
Gain (loss) on liquidated residential mortgage loans
(3,628
)
 
3

 
(5,844
)
 
(272
)
Gain (loss) on sale of REO
(2,702
)
 
2,835

 
(5,312
)
 
2,986

Other gains (losses)
(195
)
 
(660
)
 
(765
)
 
(813
)
 
$
13,371

 
$
(14,271
)
 
$
(303
)
 
$
(26,517
)

Other income (loss), net, is comprised of the following:
 
Three Months Ended 
 June 30,
 
Six Months Ended  
 June 30,
 
2017
 
2016
 
2017
 
2016
Unrealized gain (loss) on derivative instruments
$
(8,010
)
 
$
(11,603
)
 
$
(3,684
)
 
$
(36,160
)
Unrealized gain (loss) on other ABS
(607
)
 
(1,218
)
 
151

 
(950
)
Gain (loss) on transfer of loans to REO
4,978

 
7,804

 
11,612

 
10,287

Gain (loss) on transfer of loans to other assets
81

 
344

 
293

 
861

Gain on Excess MSR recapture agreements
715

 
688

 
1,342

 
1,420

Other income (loss)
(6,192
)
 
525

 
(11,905
)
 
4,333

 
$
(9,035
)
 
$
(3,460
)
 
$
(2,191
)
 
$
(20,209
)


11

NEW RESIDENTIAL INVESTMENT CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 2017
(dollars in tables in thousands, except share data) 
 

Other assets and liabilities are comprised of the following:
 
Other Assets
 
 
 
Accrued Expenses
and Other Liabilities
 
June 30, 2017
 
December 31, 2016
 
 
 
June 30, 2017
 
December 31, 2016
Margin receivable, net
$
58,203

 
$
55,481

 
Interest payable
 
$
30,230

 
$
23,108

Other receivables
10,837

 
16,350

 
Accounts payable
 
63,160

 
31,299

Principal and interest receivable
66,159

 
52,738

 
Derivative liabilities (Note 10)
 
55

 
3,021

Receivable from government agency
45,667

 
54,706

 
Current taxes payable
 
2,688

 
2,314

Call rights
337

 
337

 
Due to servicers
 
72,445

 
77,148

Derivative assets (Note 10)
14,177

 
6,762

 
MSR purchase price holdback
 
118,519

 
60,436

Servicing fee receivables
43,364

 
7,405

 
Other liabilities
 
11,945

 
8,118

Ginnie Mae EBO servicer advance receivable, net
12,025

 
14,829

 
 
 
$
299,042

 
$
205,444

Due from servicers
35,790

 
22,134

 
 
 
 
 
 
Servicer advances receivable, net(A)
147,721

 
81,582

 
 
 
 
 
 
Prepaid expenses
10,646

 
9,487

 
 
 
 
 
 
Other assets
11,571

 
4,269

 
 
 
 
 
 
 
$
456,497

 
$
326,080

 
 
 
 
 
 

(A)
Represents Servicer Advances due to New Residential’s licensed servicer subsidiary, New Residential Mortgage LLC (Note 5).

As reflected on the Condensed Consolidated Statements of Cash Flows, accretion and other amortization is comprised of the following:
 
 
Six Months Ended  
 June 30,
 
 
2017
 
2016
Accretion of servicer advance interest income
 
$
316,512

 
$
156,749

Accretion of excess mortgage servicing rights income
 
49,546

 
76,231

Accretion of net discount on securities and loans(A)
 
187,039

 
109,228

Amortization of deferred financing costs
 
(6,800
)
 
(9,320
)
Amortization of discount on notes and bonds payable
 
(911
)
 
(973
)
 
 
$
545,386

 
$
331,915


(A)
Includes accretion of the accretable yield on PCD loans.

3. SEGMENT REPORTING
 
New Residential conducts its business through the following segments: (i) investments in Excess MSRs, (ii) investments in MSRs, (iii) investments in Servicer Advances, (iv) investments in real estate securities, (v) investments in residential mortgage loans, (vi) investments in consumer loans, and (vii) corporate. The corporate segment consists primarily of (i) general and administrative expenses, (ii) the management fees and incentive compensation related to the Management Agreement and (iii) corporate cash and related interest income. Securities owned by New Residential (Note 7) that are collateralized by Servicer Advances are included in the Servicer Advances segment. Secured corporate loans effectively collateralized by Excess MSRs are included in the Excess MSRs segment.
 

12

NEW RESIDENTIAL INVESTMENT CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 2017
(dollars in tables in thousands, except share data) 
 

Summary financial data on New Residential’s segments is given below, together with a reconciliation to the same data for New Residential as a whole:
 
Servicing Related Assets
 
Residential Securities and Loans
 
 
 
 
 
 
 
Excess MSRs
 
MSRs
 
Servicer Advances
 
Real Estate Securities
 
Residential Mortgage Loans
 
Consumer Loans
 
Corporate
 
Total
Three Months Ended June 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
$
18,128

 
$
2,535

 
$
244,308

 
$
113,475

 
$
25,638

 
$
67,698

 
$
170

 
$
471,952

Interest expense
9,005

 
10,600

 
40,720

 
29,571

 
11,628

 
13,633

 

 
115,157

Net interest income (expense)
9,123

 
(8,065
)
 
203,588

 
83,904

 
14,010

 
54,065

 
170

 
356,795

Impairment

 

 

 
5,115

 
5,261

 
15,510

 

 
25,886

Servicing revenue, net

 
170,851

 

 

 

 

 

 
170,851

Other income (loss)
(14,219
)
 
5,596

 
54,774

 
(15,374
)
 
21,174

 
5,896

 

 
57,847

Operating expenses
112

 
59,318

 
605

 
297

 
8,406

 
11,544

 
59,078

 
139,360

Income (Loss) Before Income Taxes
(5,208
)
 
109,064

 
257,757

 
63,118

 
21,517

 
32,907

 
(58,908
)
 
420,247

Income tax expense (benefit)

 
(10,666
)
 
88,547

 

 
4,793

 
170

 

 
82,844

Net Income (Loss)
$
(5,208
)
 
$
119,730

 
$
169,210

 
$
63,118

 
$
16,724

 
$
32,737

 
$
(58,908
)
 
$
337,403

Noncontrolling interests in income (loss) of consolidated subsidiaries
$

 
$

 
$
3,328

 
$

 
$

 
$
12,343

 
$

 
$
15,671

Net income (loss) attributable to common stockholders
$
(5,208
)
 
$
119,730

 
$
165,882

 
$
63,118

 
$
16,724

 
$
20,394

 
$
(58,908
)
 
$
321,732


 
Servicing Related Assets
 
Residential Securities and Loans
 
 
 
 
 
 
 
Excess MSRs
 
MSRs
 
Servicer Advances
 
Real Estate Securities
 
Residential Mortgage Loans
 
Consumer Loans
 
Corporate
 
Total
Six Months Ended June 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
$
49,546

 
$
2,560

 
$
321,012

 
$
207,283

 
$
43,631

 
$
140,104

 
$
354

 
$
764,490

Interest expense
19,077

 
11,587

 
84,596

 
50,452

 
19,168

 
28,506

 

 
213,386

Net interest income (expense)
30,469

 
(9,027
)
 
236,416

 
156,831

 
24,463

 
111,598

 
354

 
551,104

Impairment

 

 

 
7,227

 
3,243

 
35,438

 

 
45,908

Servicing revenue, net

 
211,453

 

 

 

 

 

 
211,453

Other income (loss)
(13,015
)
 
5,809

 
56,575

 
(20,970
)
 
19,838

 
5,916

 

 
54,153

Operating expenses
198

 
79,041

 
1,429

 
628

 
14,259

 
22,982

 
89,264

 
207,801

Income (Loss) Before Income Taxes
17,256

 
129,194

 
291,562

 
128,006

 
26,799

 
59,094

 
(88,910
)
 
563,001

Income tax expense (benefit)

 
(11,945
)
 
97,739

 

 
2,476

 
170

 

 
88,440

Net Income (Loss)
$
17,256

 
$
141,139

 
$
193,823

 
$
128,006

 
$
24,323

 
$
58,924

 
$
(88,910
)
 
$
474,561

Noncontrolling interests in income (loss) of consolidated subsidiaries
$

 
$

 
$
9,148

 
$

 
$

 
$
22,303

 
$

 
$
31,451

Net income (loss) attributable to common stockholders
$
17,256

 
$
141,139

 
$
184,675

 
$
128,006

 
$
24,323

 
$
36,621

 
$
(88,910
)
 
$
443,110



13

NEW RESIDENTIAL INVESTMENT CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 2017
(dollars in tables in thousands, except share data) 
 

 
Servicing Related Assets
 
Residential Securities and Loans
 
 
 
 
 
 
 
Excess MSRs
 
MSRs
 
Servicer Advances
 
Real Estate Securities
 
Residential Mortgage Loans
 
Consumer Loans
 
Corporate
 
Total
June 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investments
$
1,486,276

 
$
1,867,826

 
$
4,936,226

 
$
7,323,801

 
$
1,854,385

 
$
1,614,424

 
$

 
$
19,082,938

Cash and cash equivalents
888

 
443,792

 
76,969

 
6,016

 
2,521

 
25,902

 
3,928

 
560,016

Restricted cash
24,719

 
10,476

 
67,254

 

 

 
54,895

 

 
157,344

Other assets
2,424

 
192,065

 
83,715

 
2,759,043

 
108,829

 
40,313

 
13,328

 
3,199,717

Total assets
$
1,514,307

 
$
2,514,159

 
$
5,164,164

 
$
10,088,860

 
$
1,965,735

 
$
1,735,534

 
$
17,256

 
$
23,000,015

Debt
$
764,601

 
$
1,008,104

 
$
4,594,409

 
$
6,697,202

 
$
1,461,034

 
$
1,523,830

 
$

 
$
16,049,180

Other liabilities
2,177

 
208,230

 
20,706

 
1,830,355

 
40,252

 
6,943

 
223,214

 
2,331,877

Total liabilities
766,778

 
1,216,334

 
4,615,115

 
8,527,557

 
1,501,286

 
1,530,773

 
223,214

 
18,381,057

Total equity
747,529

 
1,297,825

 
549,049

 
1,561,303

 
464,449

 
204,761

 
(205,958
)
 
4,618,958

Noncontrolling interests in equity of consolidated subsidiaries

 

 
159,167

 

 

 
34,987

 

 
194,154

Total New Residential stockholders’ equity
$
747,529

 
$
1,297,825

 
$
389,882

 
$
1,561,303

 
$
464,449

 
$
169,774

 
$
(205,958
)
 
$
4,424,804

Investments in equity method investees
$
181,610

 
$

 
$

 
$

 
$

 
$
45,036

 
$

 
$
226,646

 

Servicing Related Assets

Residential Securities and Loans







Excess MSRs

Servicer Advances

Real Estate Securities

Residential Mortgage Loans

Consumer Loans

Corporate

Total
Three Months Ended June 30, 2016













Interest income
$
33,263


$
82,793


$
68,214


$
14,272


$
78,309


$
626


$
277,477

Interest expense
5,181


58,795


10,933


6,904


18,872




100,685

Net interest income (expense)
28,082


23,998


57,281


7,368


59,437


626


176,792

Impairment




2,819


855


15,970




19,644

Servicing revenue, net

 

 

 

 

 

 

Other income (loss)
(15,875
)

15,064


(24,403
)

5,491






(19,723
)
Operating expenses
298


944


477


2,718


12,614


19,229


36,280

Income (Loss) Before Income Taxes
11,909

 
38,118

 
29,582

 
9,286

 
30,853

 
(18,603
)

101,145

Income tax expense (benefit)

 
7,397

 

 
42

 
75

 
4


7,518

Net Income (Loss)
$
11,909

 
$
30,721

 
$
29,582

 
$
9,244

 
$
30,778

 
$
(18,607
)

$
93,627

Noncontrolling interests in income (loss) of consolidated subsidiaries
$

 
$
10,345

 
$

 
$

 
$
14,630

 
$


$
24,975

Net income (loss) attributable to common stockholders
$
11,909

 
$
20,376

 
$
29,582

 
$
9,244

 
$
16,148

 
$
(18,607
)

$
68,652



14

NEW RESIDENTIAL INVESTMENT CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 2017
(dollars in tables in thousands, except share data) 
 

 
Servicing Related Assets
 
Residential Securities and Loans
 
 
 
 
 
 
 
Excess MSRs
 
Servicer Advances
 
Real Estate Securities
 
Residential Mortgage Loans
 
Consumer Loans
 
Corporate
 
Total
Six Months Ended June 30, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
$
76,231

 
$
163,760

 
$
114,127

 
$
33,765

 
$
78,310

 
$
1,320

 
$
467,513

Interest expense
8,115

 
121,870

 
18,417

 
14,294

 
19,217

 

 
181,913

Net interest income (expense)
68,116

 
41,890

 
95,710

 
19,471