EX-99.1 2 ritm-2024930x8xkxexhibit991.htm EX-99.1 Document
Exhibit 99.1
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Rithm Capital Corp. Announces Third Quarter 2024 Results

NEW YORK - (BUSINESS WIRE) — Rithm Capital Corp. (NYSE: RITM; “Rithm Capital,” “Rithm” or the “Company”) today reported the following information for the third quarter ended September 30, 2024:

Third Quarter 2024 Financial Highlights:

GAAP net income of $97.0 million, or $0.20 per diluted common share(1)
Earnings available for distribution of $270.3 million, or $0.54 per diluted common share(1)(2)
Common dividend of $129.9 million, or $0.25 per common share
Book value per common share of $12.31(1)

Q3 2024
Q2 2024
Summary Operating Results:
GAAP Net Income per Diluted Common Share(1)
$0.20 $0.43 
GAAP Net Income$97.0 million$213.2 million
Non-GAAP Results:
Earnings Available for Distribution per Diluted Common Share(1)(2)
$0.54 $0.47 
Earnings Available for Distribution(2)
$270.3 million$231.1 million
Common Dividend:
Common Dividend per Share$0.25 $0.25 
Common Dividend$129.9 million$122.4 million


“Rithm had another terrific quarter in Q3 with the entire business demonstrating both operational resilience and earnings durability, which are increasingly the hallmarks of our well-balanced model,” said Michael Nierenberg, Chairman, Chief Executive Officer and President of Rithm Capital. “Our core businesses are consistently creating value for shareholders through earnings, which is either distributed as dividends or reinvested back into compounding our growth, diversifying earnings and positioning the business for future success to benefit our shareholders and LPs alike.”



Third Quarter 2024 Company Highlights:

Rithm Capital
Rithm sold 30 million shares of common stock for gross proceeds of approximately $340 million
Total Servicing portfolio of $878 billion unpaid principal balance (“UPB”) at September 30, 2024(3)

Newrez
Origination & Servicing segment pre-tax income of $245.9 million, excluding the MSR mark-to-market loss adjustment of $558.2 million, up from $227.6 million in Q2’24
Generated a 24% pre-tax return on equity (“ROE”) on $4.3 billion of equity(4)(5)
Total servicing UPB of $755 billion, an increase of 34% YoY, including $233 billion UPB of third-party servicing, an increase of 116% YoY
Origination funded production volume of $15.9 billion, an increase of 9% QoQ and 43% YoY

Genesis
Mortgage Loans Receivable segment pre-tax income of $35.1 million
Generated a 18% pre-tax ROE on $743 million of equity(6)
Origination volume of $761 million, an increase of 26% YoY
Issued second largest rated residential transitional loan securitization of $450 million, focused on ground-up construction

Sculptor
Approximately $34 billion of assets under management (“AUM”) at September 30, 2024(7)
First closing of Real Estate Fund V at $1.3 billion focused on opportunistic real estate investments
Closed a US CLO for a total of ~$400 million of AUM

(1)Per common share calculations for both GAAP Net Income and Earnings Available for Distribution are based on 496,800,687 and 490,981,282 weighted average diluted shares for the quarters ended September 30, 2024 and June 30, 2024, respectively. Per share calculations of Book Value are based on 519,732,422 common shares outstanding as of September 30, 2024.

(2)Earnings Available for Distribution is a non-GAAP financial measure. For a reconciliation of Earnings Available for Distribution to GAAP Net Income, as well as an explanation of this measure, please refer to the section entitled Non-GAAP Financial Measures and Reconciliation to GAAP Net Income below.

(3)Includes excess and full MSRs, as well as third-party servicing.
(4)Excludes full MSR mark-to-market loss adjustment of $558.2 million.

(5)ROE is calculated based on annualized pre-tax income, excluding MSR mark-to-market, divided by the average Origination and Servicing segment ending equity for the respective period.

(6)ROE is calculated based on annualized pre-tax income, divided by the average Mortgage Loans Receivable segment ending equity for the respective period.
(7)“Assets Under Management” (AUM) refers to the assets for which Sculptor provides investment management, advisory or certain other investment-related services. This is generally equal to the sum of (i) net asset value of the open-ended funds or gross asset value of Real Estate funds, (ii) uncalled capital commitments, (iii) par value of collateralized loan obligations. AUM includes amounts that are not subject to management fees, incentive income or other amounts earned on AUM. AUM also includes amounts that are invested in other Sculptor funds/vehicles. Our calculation of AUM may differ from the calculations of other asset managers, and as a result, may not be comparable to similar measures presented by other asset managers. Our calculations of AUM are not based on any definition set forth in the governing documents of the investment funds and are not calculated pursuant to any regulatory definitions. Sculptor AUM calculation methodology changed effective September 1, 2024.




ADDITIONAL INFORMATION

For additional information that management believes to be useful for investors, please refer to the latest presentation posted on the Investors - News section of the Company’s website, www.rithmcap.com. Information on, or accessible through, our website is not a part of, and is not incorporated into, this press release.

EARNINGS CONFERENCE CALL

Rithm Capital’s management will host a conference call on Tuesday, October 29, 2024 at 8:00 A.M. Eastern Time. A copy of the earnings release will be posted to the Investors - News section of Rithm Capital’s website, www.rithmcap.com.

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 “Rithm Capital Third Quarter 2024 Earnings Call.” In addition, participants are encouraged to pre-register for the conference call at https://dpregister.com/sreg/10193763/fdc41fbbf8.

A simultaneous webcast of the conference call will be available to the public on a listen-only basis at www.rithmcap.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 5, 2024 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 “4703609.”



Rithm Capital Corp. and Subsidiaries
Consolidated Statements of Operations (Unaudited)
($ in thousands, except share and per share data)

Three Months Ended
September 30,
2024
June 30,
2024
Revenues
Servicing fee revenue, net and interest income from MSRs and MSR financing receivables$493,171 $498,978 
Change in fair value of MSRs and MSR financing receivables (includes realization of cash flows of $(139,784) and $(165,138), respectively)
(747,335)(67,898)
Servicing revenue, net(254,164)431,080 
Interest income 550,732 478,653 
Gain on originated residential mortgage loans, held-for-sale, net184,695 153,741 
Other revenues57,212 56,500 
Asset management revenues81,039 109,433 
619,514 1,229,407 
Expenses
Interest expense and warehouse line fees510,168 465,944 
General and administrative208,046 207,123 
Compensation and benefits265,673 270,448 
983,887 943,515 
Other income (loss)
Realized and unrealized gains (losses), net412,953 (14,769)
Other income (loss), net(3,432)19,042 
409,521 4,273 
Income (loss) before income taxes45,148 290,165 
Income tax expense (benefit)(78,433)51,648 
Net income (loss)$123,581 $238,517 
Noncontrolling interests in income of consolidated subsidiaries1,839 2,961 
Dividends on preferred stock24,718 22,395 
Net income (loss) attributable to common stockholders$97,024 $213,161 
Net income (loss) per share of common stock
Basic$0.20 $0.44 
Diluted$0.20 $0.43 
Weighted average number of shares of common stock outstanding
Basic491,362,857 486,721,836 
Diluted496,800,687 490,981,282 
Dividends declared per share of common stock$0.25 $0.25 







Rithm Capital Corp. and Subsidiaries
Consolidated Balance Sheets (Unaudited)
($ in thousands, except share data)
September 30,
2024
June 30,
2024
Assets
Mortgage servicing rights and mortgage servicing rights financing receivables, at fair value$9,300,989 $9,693,331 
Government and government-backed securities ($10,110,166 and $9,300,237 at fair value, respectively)
10,134,897 9,325,097 
Residential mortgage loans, held-for-investment, at fair value378,032 368,866 
Residential mortgage loans, held-for-sale ($3,115,934 and $3,837,929 at fair value, respectively)
3,185,873 3,910,823 
Consumer loans, held-for-investment, at fair value805,577 946,367 
Single-family rental properties1,040,645 1,025,324 
Mortgage loans receivable, at fair value1,869,852 2,049,266 
Residential mortgage loans subject to repurchase2,409,992 1,905,625 
Cash and cash equivalents1,639,539 1,238,736 
Restricted cash306,533 296,955 
Servicer advances receivable2,726,103 2,774,510 
Other assets ($2,326,514 and $2,107,845 at fair value, respectively)
4,162,513 4,251,186 
Assets of consolidated CFEs(A):
Investments, at fair value and other assets4,315,417 4,232,803 
Total Assets$42,275,962 $42,018,889 
Liabilities and Equity
Liabilities
Secured financing agreements$15,357,630 $15,179,900 
Secured notes and bonds payable ($197,234 and $205,286 at fair value, respectively)
9,410,773 9,955,891 
Residential mortgage loan repurchase liability2,409,992 1,905,625 
Unsecured notes, net of issuance costs1,200,791 1,197,294 
Dividends payable150,393 139,004 
Accrued expenses and other liabilities ($560,312 and $503,925 at fair value, respectively)
2,357,516 2,644,728 
Liabilities of consolidated CFEs(A):
Notes payable, at fair value and other liabilities3,637,458 3,575,833 
Total Liabilities34,524,553 34,598,275 
Commitments and Contingencies
Equity
Preferred stock, $0.01 par value, 100,000,000 shares authorized, 51,964,122 issued and outstanding, $1,299,104 aggregate liquidation preference
1,257,254 1,257,254 
Common stock, $0.01 par value, 2,000,000,000 shares authorized, 519,732,422 and 489,732,422 issued and outstanding, respectively
5,197 4,897 
Additional paid-in capital6,513,768 6,162,872 
Retained earnings (accumulated deficit)(177,658)(143,185)
Accumulated other comprehensive income57,981 44,755 
Total Rithm Capital stockholders’ equity7,656,542 7,326,593 
Noncontrolling interests in equity of consolidated subsidiaries94,867 94,021 
Total Equity7,751,409 7,420,614 
Total Liabilities and Equity$42,275,962 $42,018,889 

(A) Includes assets and liabilities of certain consolidated VIEs that meet the definition of collateralized financing entities (“CFEs”). These assets can only be used to settle obligations and liabilities of such VIEs for which creditors do not have recourse to Rithm Capital Corp.







NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP NET INCOME

The Company has four primary variables that impact its performance: (i) net interest margin on assets held within the investment portfolio; (ii) realized and unrealized gains or losses on assets held within the investment portfolio and operating companies, including any impairment or reserve for expected credit losses; (iii) income from the Company’s operating company investments; and (iv) the Company’s operating expenses and taxes.

“Earnings available for distribution” is a non-GAAP financial measure of the Company’s operating performance, which is used by management to evaluate the Company’s performance excluding: (i) net realized and unrealized gains and losses on certain assets and liabilities; (ii) other net income and losses; (iii) non-capitalized transaction-related expenses; and (iv) deferred taxes.

The Company’s definition of earnings available for distribution excludes certain realized and unrealized gains and losses (including impairment and reserves as well as derivative activities), 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 and are not considered to be part of the Company’s core operations. Within other net income and losses, management primarily excludes (i) equity-based compensation expenses, (ii) non-cash deferred interest expense (iii) amortization expense related to intangible assets and (iv) amortization of acquisition premium on Mortgage loans receivable as management does not consider this non-cash activity to be a component of earnings available for distribution. With regard to non-capitalized transaction-related expenses, management excludes (i) legal and valuation service costs, (ii) other professional service fees incurred when the Company acquires certain investments, as well as (iii) costs associated with the acquisition and integration of acquired businesses as 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. Management also excludes deferred taxes as management believes they are not representative of current operations.

Management believes that the adjustments to compute “earnings available for distribution” 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 financial measure that management uses to operate the business. Management also utilizes earnings available for distribution as a financial 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 earnings available for distribution as an indicator of the results of such decisions. Earnings available for distribution 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 Company views earnings available for distribution as a consistent financial measure of its portfolio’s ability to generate income for distribution to common stockholders. Earnings available for distribution 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 GAAP, and the Company’s calculation of this financial measure may not be comparable to similarly entitled financial measures reported by other companies. Furthermore, to maintain qualification as a REIT, U.S. federal income tax law generally requires that the Company distribute at least 90% of its REIT taxable income annually, determined without regard to the deduction for dividends paid and excluding net capital gains. Because the Company views earnings available for distribution as a consistent financial measure of its ability to generate income for distribution to common stockholders, earnings available for distribution is one metric, but not the exclusive metric, that the Company’s board of directors uses to determine the amount, if any, and the payment date of dividends on common stock. However, earnings available for distribution should not be considered as an indication of the Company’s taxable income, a guaranty of its ability to pay dividends or as a proxy for the amount of dividends it may pay, as earnings available for distribution excludes certain items that impact its cash needs.













Reconciliation of Non-GAAP Measure to the Respective GAAP Measure

The table below provides a reconciliation of earnings available for distribution to the most directly comparable GAAP financial measure (dollars in thousands, except share and per share data):
Three Months Ended
September 30,
2024
June 30,
2024
Net income (loss) attributable to common stockholders - GAAP$97,024 $213,161 
Adjustments:
Realized and unrealized (gains) losses, net, including MSR change in valuation inputs and assumptions199,342 (71,480)
Other (income) loss, net50,756 48,434 
Computershare Mortgage Acquisition:
Bargain purchase gain— (28,161)
Non-recurring acquisition and restructuring expenses— 14,936 
Non-capitalized transaction-related expenses3,242 7,775 
Deferred taxes(80,037)46,451 
Earnings available for distribution - Non-GAAP$270,327 $231,116 
Net income (loss) per diluted share $0.20 $0.43 
Earnings available for distribution per diluted share $0.54 $0.47 
Weighted average number of shares of common stock outstanding, diluted496,800,687 490,981,282 


































SEGMENT INFORMATION
($ in thousands)

Third Quarter Ended September 30, 2024
Origination and ServicingInvestment PortfolioMortgage Loans ReceivableAsset ManagementCorporateTotal
Servicing fee revenue, net and interest income from MSRs and MSR financing receivables$441,562 $51,609 $— $— $— $493,171 
Change in fair value of MSRs and MSR financing receivables (includes realization of cash flows of $(139,784))
(682,599)(64,736)— — — (747,335)
Servicing revenue, net(241,037)(13,127)— — — (254,164)
Interest income211,631 267,558 66,262 5,281 — 550,732 
Gain on originated residential mortgage loans, held-for-sale, net171,700 12,995 — — — 184,695 
Other investment portfolio revenues— 57,212 — — — 57,212 
Asset management revenues— — — 81,039 — 81,039 
Total revenues142,294 324,638 66,262 86,320 — 619,514 
Interest expense and warehouse line fees164,366 286,160 34,304 8,243 17,095 510,168 
General and administrative99,359 64,438 5,298 27,317 11,634 208,046 
Compensation and benefits177,702 3,929 9,520 58,267 16,255 265,673 
Total operating expenses441,427 354,527 49,122 93,827 44,984 983,887 
Realized and unrealized gains (losses), net20 389,833 17,972 5,128 — 412,953 
Other income (loss), net(13,156)1,354 36 8,334 — (3,432)
Total other income (loss)(13,136)391,187 18,008 13,462 — 409,521 
Income (loss) before income taxes(312,269)361,298 35,148 5,955 (44,984)45,148 
Income tax expense (benefit)(84,764)(4,916)2,754 8,493 — (78,433)
Net income (loss)(227,505)366,214 32,394 (2,538)(44,984)123,581 
Noncontrolling interests in income (loss) of consolidated subsidiaries847 (1,123)— 2,115 — 1,839 
Dividends on preferred stock— — — — 24,718 24,718 
Net income (loss) attributable to common stockholders$(228,352)$367,337 $32,394 $(4,653)$(69,702)$97,024 
Total Assets$16,888,982 $20,904,603 $3,083,322 $1,378,846 $20,209 $42,275,962 
Total Rithm Capital Stockholders' Equity$4,314,188 $3,143,995 $743,427 $717,212 $(1,262,280)$7,656,542 

Second Quarter Ended June 30, 2024
Origination and ServicingInvestment PortfolioMortgage Loans ReceivableAsset ManagementCorporateTotal
Servicing fee revenue, net and interest income from MSRs and MSR financing receivables$442,016 $56,962 $— $— $— $498,978 
Change in fair value of MSRs and MSR financing receivables (includes realization of cash flows of $(165,138))
(127,401)59,503 — — — (67,898)
Servicing revenue, net314,615 116,465 — — — 431,080 
Interest income178,445 235,662 59,573 4,971 478,653 
Gain on originated residential mortgage loans, held-for-sale, net155,771 (2,030)— — — 153,741 
Other investment portfolio revenues— 56,500 — — — 56,500 
Asset management revenues— — — 109,433 — 109,433 
Total revenues648,831 406,597 59,573 114,404 1,229,407 
Interest expense and warehouse line fees152,477 254,331 29,106 8,333 21,697 465,944 
General and administrative91,057 60,704 6,306 31,440 17,616 207,123 
Compensation and benefits184,853 3,478 9,113 51,982 21,022 270,448 
Total operating expenses428,387 318,513 44,525 91,755 60,335 943,515 
Realized and unrealized gains (losses), net— (41,975)18,739 8,467 — (14,769)
Other income (loss), net27,293 (8,810)(2,116)2,675 — 19,042 
Total other income (loss)27,293 (50,785)16,623 11,142 — 4,273 
Income (loss) before income taxes247,737 37,299 31,671 33,791 (60,333)290,165 
Income tax expense (benefit)38,960 2,909 1,952 7,827 — 51,648 
Net income (loss)208,777 34,390 29,719 25,964 (60,333)238,517 
Noncontrolling interests in income (loss) of consolidated subsidiaries1,016 1,110 — 835 — 2,961 
Dividends on preferred stock— — — — 22,395 22,395 
Net income (loss) attributable to common stockholders$207,761 $33,280 $29,719 $25,129 $(82,728)$213,161 
Total Assets$16,264,142 $21,289,580 $2,817,309 $1,637,511 $10,347 $42,018,889 
Total Rithm Capital Stockholders' Equity$3,998,447 $3,133,475 $732,061 $695,882 $(1,233,272)$7,326,593 



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. 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 Statement 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.rithmcap.com). New risks and uncertainties emerge from time to time, and it is not possible for Rithm Capital 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 Rithm Capital expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Rithm Capital's expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.

ABOUT RITHM CAPITAL

Rithm Capital is a global asset manager focused on real estate, credit and financial services. Rithm makes direct investments and operates several wholly-owned operating businesses. Rithm’s businesses include Sculptor Capital Management, Inc., an alternative asset manager, as well as Newrez LLC and Genesis Capital LLC, leading mortgage origination and servicing platforms. Rithm Capital seeks to generate attractive risk-adjusted returns across market cycles and interest rate environments. Since inception in 2013, Rithm has delivered approximately $5.6 billion in dividends to shareholders. Rithm is organized and conducts its operations to qualify as a real estate investment trust (REIT) for federal income tax purposes and is headquartered in New York City.


Investor Relations
212-850-7770
IR@RithmCap.com