UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):
November 6, 2014

NATIONSTAR MORTGAGE HOLDINGS INC.
(Exact name of registrant as specified in its charter)

Delaware
001-35449
45-2156869
(State of Incorporation)
(Commission File Number)
(I.R.S. Employer
Identification Number)
350 Highland Drive
Lewisville, Texas 75067
(Address of principal executive offices)

(469) 549-2000
(Registrant’s telephone number, including area code)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ]    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ]    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
    240.14d-2(b))

[ ]    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))





Item 2.02
Results of Operations and Financial Condition.

On November 6, 2014, Nationstar Mortgage Holdings Inc. (the "Company") issued a press release announcing its financial results for the third quarter ended September 30, 2014. A copy of the press release is attached as Exhibit 99.1 and will be published on the Company’s website at http://www.investors.nationstarholdings.com . In connection with the release and the related conference call, the Company posted a presentation relating to its third quarter 2014 financial results on its website.
 
The press release and presentation include certain non-generally accepted accounting principles (“non-GAAP”) financial measures. Reconciliations to the most directly comparable generally accepted accounting principles (“GAAP”) financial measures are included in the press release and the presentation.

The information furnished pursuant to this Item 2.02 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01
Financial Statements and Exhibits.
          
(d) Exhibits            

Exhibit
Number
 
Description
 
 
99.1
 
Press release of Nationstar Mortgage Holdings Inc., dated November 6, 2014
 
 
 



SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
 
 
 
 
 
 
Nationstar Mortgage Holdings Inc.
 
 
 
 
Date: November 6, 2014
 
 
 

By:
 
/s/ Robert D. Stiles
 
 
 
 
 
 
Robert D. Stiles
Chief Financial Officer
 
 
 
 
 
 
 













































EXHIBIT INDEX
 
Exhibit
Number
 
Description
 
 
99.1
 
Press release of Nationstar Mortgage Holdings Inc., dated November 6, 2014
 
 
 
 










FOR IMMEDIATE RELEASE
Contact: Marshall Murphy                                 
(469) 549-3005

NATIONSTAR REPORTS THIRD QUARTER 2014 FINANCIAL RESULTS


▪
GAAP EPS of $1.22 ; increase of 65% QoQ

▪
Core EPS of $0.80 ; core pretax income of $115 million

▪
Signed commitments to acquire $43 billion in servicing acquisitions since Q2’14; closed $16 billion in Q3

▪
Replaced portfolio runoff in Q3 from originations and servicing acquisitions

▪
Strategic hiring of technology innovator Kal Raman as CEO of Solutionstar


Lewisville, TX (November 6, 2014) - Nationstar Mortgage Holdings Inc. (NYSE: NSM) (“Nationstar”), a leading residential mortgage services company, today reported financial results for its third quarter ended September 30, 2014 .

“In the third quarter, Nationstar remained focused on its 2014 strategic initiatives to drive long term shareholder value,” said Jay Bray, Chief Executive Officer. “During the quarter, we generated strong margins across all of our businesses, executed on our servicing segment profitability initiatives and added additional third party clients within Solutionstar. We signed multiple servicing portfolio acquisitions and replaced virtually 100 percent of portfolio runoff in the quarter. As we announced earlier this week, we are pleased with the addition of Kal Raman as CEO of Solutionstar. This strategic hiring represents the continued evolution and growth at Solutionstar as we develop and deploy technology that will make the real estate experience easier and more transparent for consumers and real estate professionals.”
 
Nationstar reported quarterly net income of $111 million , or $1.22 per share, for the third quarter, a 65% increase over the $67 million or $0.74 per share in the second quarter 2014. Nationstar generated core EPS of $0.80 per share compared to $0.87 a share in the previous period. Core EPS utilizes a normalized tax rate and excludes one-time items and MSR fair value adjustments. Through the first three quarters of 2014 year-to-date, core earnings are up 27% compared to full year 2013 core earnings. Nationstar continues to see an increase in recurring fee-based earnings as a composition of overall earnings mix with 70% of pretax income in the third quarter generated from servicing and Solutionstar, as compared to 60% in the second quarter.


1



Third Quarter Business Highlights
(amounts in millions, unless otherwise noted)
Servicing Segment
 
Q3’14
 
Q2’14
 
% Change
Total fee income
$
282

 
$
302

 
(7
)%
Pretax income
$
90

 
$
67

 
34
 %
Core Pretax income (1)
$
93

 
$
86

 
8
 %
Core pretax income margin
33
%
 
28
%
 
18
 %
Core operating profitability (bps)
9.9

 
9.0

 
10
 %
Ending UPB ($B)
$
377.8

 
$
378.4

 
—
 %
Average UPB ($B)
$
378.1

 
$
381.4

 
(1
)%
60+ day delinquency rate
10.6
%
 
11.1
%
 
(5
)%
Annualized CPR rate
14.0
%
 
13.5
%
 
4
 %
(1)  
Excludes one-time items including expenses related to the completion of servicing advance sales to New Residential and one-time severance expenses related to the consolidation of operations. See reconciliation tables.

Servicing core pretax income increased 8% sequentially and core pretax income margin increased 18% due to continued execution on our servicing profitability targets including workforce management, reducing delinquencies and controlling vendor spend. From a basis points perspective, the Servicing operations achieved 9.9 basis points of operating profitability in the third quarter and expects to exit the year at or above 11 basis points principally driven by continued benefits from operational improvements.

Nationstar’s servicing portfolio, as measured by UPB, ended the third quarter virtually unchanged from second quarter levels as Nationstar replaced nearly 100% of runoff. Since the end of the second quarter, Nationstar has entered into commitments to acquire $43 billion of new servicing acquisitions, and closed on $16 billion in the third quarter, with the expectation of closing the remaining $27 billion by first quarter 2015.

Nationstar’s 60-plus day delinquency rate decreased to 10.6% in the quarter as a result of completing more than 18,000 workouts. The servicing portfolio CPR increased to 14.0% , reflective of the lower rate environment.

Solutionstar Segment
 
Q3'14
 
Q2’14
 
% Change
Revenue - Real Estate Exchange
$
25

 
$
36

 
(30
)%
Revenue - Real Estate Services
$
60

 
$
47

 
28
 %
Pretax income
$
35

 
$
38

 
(8
)%
Pretax income margin
41
%
 
46
%
 
(11
)%
Property sales
5,225

 
5,661

 
(8
)%
REO ending inventory
9,639

 
8,789

 
10
 %

Solutionstar’s revenues increased slightly during the quarter as a result of increased revenues from the real estate services business. Solutionstar’s pretax margin in the third quarter decreased slightly to 41% from 46% in the second quarter, primarily due to a higher mix of business coming from the real estate services business.
 

2


During the quarter, Solutionstar sold over 5,200 properties and still expects more than 20,000 sales over the course of 2014. The number of properties under management continues to increase as a result of the successful closing of the private-label portfolio acquisitions from Bank of America in late 2013. In addition, during the quarter, Solutionstar entered into 10 new agreements to sell properties on behalf of third-party clients. It is expected that these assets will be boarded onto the HomeSearch.com platform during the fourth quarter with sales and earnings materializing thereafter.

Nationstar recently announced the strategic hiring of technology innovator Kal Raman as Chief Executive Officer of Solutionstar. Mr. Raman brings more than two decades of experience in technology and retail businesses and has an extensive record of leadership at innovative, consumer-focused technology companies, including Groupon, eBay and Amazon. This hiring represents the next step in Solutionstar's strategy to capitalize on market opportunities and position itself as an innovative leader in real estate transactions and technology.

In early November, Solutionstar deployed its next generation technology for HomeSearch.com which delivers an enhanced experience to consumers by providing increased functionality including access to distressed and non-distressed property listings and advanced search tools.

Originations Segment
 
Q3’14
 
Q2’14
 
% Change
Revenue
$
139

 
$
165

 
(16
)%
Pretax income
$
51

 
$
69

 
(26
)%
Core pretax income (1)
$
54

 
$
69

 
(22
)%
Core pretax income margin
39
%
 
42
%
 
(7
)%
Funded volume - consumer direct ($B)
$
2.7

 
$
2.9

 
(7
)%
Funded volume - total ($B)
$
4.1

 
$
4.4

 
(7
)%
Locked pipeline ($B)
$
2.4

 
$
2.5

 
(4
)%
Recapture percentage
29
%
 
32
%
 
(9
)%
Purchase origination percentage of funded volume
31
%
 
30
%
 
3
 %
(1)  
Excludes one-time items including expenses related to the transition to a single origination platform. See reconciliation tables.

Originations revenue decreased sequentially principally due to reduced volumes and a reduction in secondary market spreads. Originations expenses decreased during the quarter as a result of increased productivity and platform efficiencies. The originations segment generated a 39% margin during the quarter, representing the second consecutive quarter of high margins.

During the quarter, Nationstar successfully completed the migration to a single integrated platform that will generate efficiencies in subsequent quarters. Nationstar funded $4.1 billion of volume during the quarter with approximately 65% of the volume from the consumer direct channel. Correspondent volume was flat quarter over quarter and Nationstar continues to view the correspondent channel as an opportunistic cost-effective way to acquire servicing.





3


Key Performance Metrics
On a go-forward basis, in lieu of updating guidance, Nationstar has identified key operational metrics, which are key drivers of long-term growth, profitability and shareholder value. The company has established a long term earnings growth target in excess of 20% per annum. Additional detail on the key financial and operational target metrics for 2015 can be found in Nationstar's Q3'14 investor presentation.

Commitment to Homeowners
Nationstar is committed to driving down customer complaints by being consistent, resourceful, proactive and transparent in our interactions with homeowners. We believe this will translate into lower complaint volumes, lower operating expenses and put Nationstar in a preferred position for future servicing transfer approvals. In Q1'15 Nationstar will launch a customer feedback portal that will allow customers to have direct interaction with our customer support staff, track complaint statistics over time and provide transparency for all constituents. The creation of the consumer feedback portal is a prudent investment that will improve the customer experience and support long-term strategic goals and growth.
 
Nationstar continues to provide mortgage solutions to our more than 2.2 million homeowners. In the third quarter, we helped over 18,000 customers avoid foreclosure, including approximately 11,000 loan modifications which lower customer's payments. This also included providing collateral workouts and other repayment plans to more than 7,000 homeowners.

In addition, we helped 21,000 homeowners secure mortgages. The total includes over 8,900 homeowners whose mortgages were refinanced through the Home Affordable Refinance Program (“HARP”), which allows us to refinance a borrower with a very high loan-to-value ratio or a homeowner with negative equity in their house.

Conference Call Webcast and Investor Presentation
Chief Executive Officer, Jay Bray, and Chief Financial Officer, Robert Stiles, will host a conference call for investors and analysts to discuss Nationstar’s third quarter 2014 results and other general business matters at 9:00 a.m. ET on Thursday, November 6, 2014. To listen to the event live or in an archive which will be available for 14 days, visit Nationstar's website at http://investors.nationstarholdings.com. The conference call will also be accessible by dialing 800-299-8538, or 617-786-2902 internationally. Please use the participant passcode 92319922 to access the live conference call. An investor presentation will also be available at http://investors.nationstarholdings.com.

Non-GAAP Financial Measures
This disclaimer applies to every usage of “Core Earnings per Share” or “Core EPS”, "Core Pretax Income", and “Servicing Core Pretax Income” in this release. Core EPS is a metric that is used by management to normalize earnings for one-time expenses and changes in fair value of the MSR. Core pretax income is a metric that is used by management to exclude certain non-recurring items, and changes in the fair value of the MSR, in an attempt to provide better earnings per share comparison to prior periods. Servicing core pretax income is a metric that is used by management to exclude certain non-recurring items in an attempt to provide a better earnings per share comparison to prior periods.




4


About Nationstar
Based in Lewisville, Texas, Nationstar earns fees through the delivery of quality servicing, origination and transaction based services related principally to single-family residences throughout the United States. Additional corporate information is available on the investors tab at www.nationstarmtg.com.

Forward Looking Statements
Any statements in this release that are not historical or current facts are forward looking statements. These forward looking statements include, but are not limited to, statements regarding: estimates of our servicing segment’s profitability and amount of acquisitions, Solutionstar property sales in 2014 and expectation and boarding of assets on HomeSearch, the generation of efficiencies in the origination segment, key operational metrics and targets, and estimates regarding customer complaints. Forward looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-statements. Certain of these risks and uncertainties are described in the “Risk Factors” section of our most recent annual report and other required documents as filed with the SEC which are available at the SEC’s website at http://www.sec.gov. Nationstar undertakes no obligation to publicly update or revise any forward looking statements or any other financial information contained herein, and the statements made in this press release are current as of the date of this release only.




5


Financial Tables                                         
    
NATIONSTAR MORTGAGE HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(dollars and shares in thousands, except per share data)

 
Three Months Ended
 
September 30, 2014
 
June 30, 2014
Revenues:
 
 
 
Servicing fee income
$
235,408

 
$
258,099

Other fee income
126,101

 
118,718

Total fee income
361,509

 
376,817

Gain on mortgage loans held for sale
142,815

 
172,916

Total revenues
504,324

 
549,733

 
 
 
 
Total expenses and impairments
327,224

 
346,711

 
 
 
 
Other income (expense):
 
 
 
Interest income
43,314

 
42,941

Interest expense
(116,673
)
 
(139,422
)
Gain on disposal of property
4,898

 
—

Gain on interest rate swaps and caps
940

 
(953
)
Total other income (expense)
(67,521
)
 
(97,434
)
 
 
 
 
Income before taxes
109,579

 
105,588

Income tax expense / (benefit) (1)
(1,700
)
 
38,941

Net income
111,279

 
66,647

 
 
 
 
Less: Net gain (loss) attributable to noncontrolling interests
54

 
192

Net income attributable to Nationstar
$
111,225

 
$
66,455

 
 
 
 
Earnings per share:
 
 
 
Basic earnings per share
$
1.23

 
$
0.74

Diluted earnings per share
$
1.22

 
$
0.74

Weighted average shares:
 
 
 
       Basic
90,120

 
89,465

       Dilutive effect of stock awards
1,001

 
729

       Diluted
91,121

 
90,194

 
 
 
 
Dividends declared per share
—

 
—


(1) In the third quarter, Nationstar released a deferred tax valuation allowance in the amount of $44 million which resulted in a tax credit during the period. The valuation allowance was released as a result of Nationstar's recent growth and profitable results and the expectation of continued growth and profitability in the future.


6




NATIONSTAR MORTGAGE HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)

 
September 30, 2014
 
June 30, 2014
Assets
 
 
 
Cash and cash equivalents
$
269,735

 
$
623,927

Restricted cash
294,044

 
334,910

Accounts receivable
3,060,382

 
2,809,436

Mortgage loans held for sale, $1,695,502 and $2,224,205 at fair value, respectively
1,697,041

 
2,224,821

Mortgage loans held for investment, net of allowance for loan losses of $3,549 and $4,193 respectively
195,432

 
199,125

Reverse mortgage interests
1,956,952

 
1,772,386

Mortgage servicing rights, $2,898,209 and $2,678,134 at fair value, respectively
2,910,640

 
2,691,449

Property and equipment, net of accumulated depreciation of $100,515 and $93,985 respectively
121,635

 
123,720

Derivative financial instruments
88,333

 
95,328

Other assets
282,850

 
292,672

Total assets
$
10,877,044

 
$
11,167,774

 
 
 
 
Liabilities and stockholders' equity
 
 
 
Notes payable
$
3,532,743

 
$
4,017,943

Unsecured senior notes
2,159,651

 
2,443,962

Payables and accrued liabilities
1,344,895

 
1,071,626

Derivative financial instruments
9,621

 
33,116

Mortgage servicing liabilities
78,954

 
80,492

Nonrecourse debt - Legacy Assets
78,481

 
82,731

Excess spread financing
1,062,544

 
1,036,038

Participating interest financing
1,367,382

 
1,285,853

Mortgage servicing rights financing liabilities
44,449

 
33,452

Total liabilities
$
9,678,720

 
$
10,085,213

 
 
 
 
Total equity
1,198,324

 
1,082,561

Total liabilities and stockholders' equity
$
10,877,044

 
$
11,167,774

















7




SERVICING FEE INCOME BEFORE FAIR VALUE ADJUSTMENTS RECONCILIATION
(dollars in thousands)
 
Three Months Ended
 
September 30, 2014
 
June 30, 2014
Servicing fee income
$
223,989

 
$
221,976

Loss mitigation and performance-based incentive fees
15,088

 
11,570

Modification fees
30,611

 
45,157

Late fees and other ancillary charges
15,645

 
15,919

Reverse mortgage fees
13,093

 
14,477

Other servicing fee related revenues
8,626

 
5,456

Total servicing fee income before MSR fair value adjustments
307,052

 
314,555

 
 
 
 
Changes in fair value due to inputs / assumptions:
 
 
 
MSR
63,449

 
6,975

MSR financing liability
(17,749
)
 
31,785

Excess spread financing
(44,464
)
 
(32,078
)
Net change in fair value due to inputs / assumptions:
1,236

 
6,682

 
 
 
 
Other changes in fair value (amortization):
 
 
 
MSR
(68,757
)
 
(52,664
)
MSR financing liability
6,752

 
6,684

Excess spread financing
7,151

 
4,942

Net other changes in fair value:
(54,854
)
 
(41,038
)
 
 
 
 
Servicing fee income
253,434

 
280,199

Other fee income
28,113

 
21,798

Total fee income
$
281,547

 
$
301,997


























8





CORE EARNINGS PER SHARE RECONCILIATION
(dollars and shares in thousands, except per share data)
 
Three Months Ended
 
September 30, 2014
 
June 30, 2014
Net income attributable to Nationstar Inc.
$
111,225

 
$
66,455

Net gain (loss) attributable to noncontrolling interests
54

 
192

Net income
111,279

 
66,647

 
 
 
 
Income taxes / (benefit) (1)
(1,700
)
 
38,941

Income before taxes
109,579

 
105,588

 
 
 
 
One-time items (2)
6,836

 
25,730

MSR mark
(1,236
)
 
(6,682
)
Core pretax income
115,179

 
124,636

 
 
 
 
Income taxes
(42,478
)
 
(45,966
)
Core income
72,701

 
78,670

 
 
 
 
Average share count
91,121

 
90,194

 
 
 
 
Core EPS
$
0.80

 
$
0.87


(1) In the third quarter, Nationstar released a deferred tax valuation allowance in the amount of $44 million which resulted in a tax credit during the period. The valuation allowance was released as a result of Nationstar's recent growth and profitable results and the expectation of continued growth and profitability in the future.

(2) One-time items include gain on sale of facility in Scottsbluff, expenses related to the retirement of 10 7/8 unsecured notes, expenses related to the originations platform consolidation, expenses related to the completion of the sale of advances to NRZ and severance expenses related to consolidation of servicing operations.


SERVICING: CORE PRETAX INCOME RECONCILIATION
(dollars in thousands)
 
Three Months Ended
 
September 30, 2014
 
June 30, 2014
  Pretax income
$
89,938

 
$
67,126

One-time items (1)
4,403

 
25,730

 
 
 
 
  Changes in fair value due to inputs or assumptions
 
 
 
  MSR
(63,449
)
 
(6,975
)
  MSR financing liability
17,749

 
(31,785
)
  Excess spread
44,464

 
32,078

  Net change in fair value due to inputs or assumptions
(1,236
)
 
(6,682
)
 
 
 
 
  Servicing core pretax income
$
93,105

 
$
86,174


(1) One-time items include expenses related to the completion of the sale of advances to NRZ and severance expenses related to consolidation of servicing operations.






9







ORIGINATIONS: CORE PRETAX INCOME RECONCILIATION
(dollars in thousands)
 
Three Months Ended
 
September 30, 2014
 
June 30, 2014
  Pretax income
$
51,243

 
$
68,634

One-time items (1)
2,833

 
—

 
 
 
 
Originations core pretax income
$
54,076

 
$
68,634


(1) One-time items expenses related to the originations platform consolidation.













































10




SEGMENT INCOME STATEMENT
(dollars in thousands)

 
For the quarter ended September 30, 2014
 
Servicing
 
Originations
 
Solutionstar
 
Operating
 
Corporate and Other
 
Elim.
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
Servicing fee income
$
253,434

 
$
105

 
$
4

 
$
253,543

 
$
(1,002
)
 
$
(17,133
)
 
$
235,408

Other fee income
28,113

 
10,334

 
85,519

 
123,966

 
2,135

 
—

 
126,101

Total fee income
281,547

 
10,439

 
85,523

 
377,509

 
1,133

 
(17,133
)
 
361,509

Gain on mortgage loans held for sale
(1,147
)
 
128,355

 
—

 
127,208

 
(1,172
)
 
16,779

 
142,815

Total revenues
280,400

 
138,794

 
85,523

 
504,717

 
(39
)
 
(354
)
 
504,324

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total expenses and impairments
160,975

 
89,369

 
50,006

 
300,350

 
26,874

 
—

 
327,224

Other income (expense)
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
18,369

 
18,903

 
—

 
37,272

 
5,688

 
354

 
43,314

Interest expense
(48,651
)
 
(17,085
)
 
(352
)
 
(66,088
)
 
(50,585
)
 
—

 
(116,673
)
Gain on sale of property
—

 
—

 
—

 
—

 
4,898

 
—

 
4,898

Loss on interest rate swaps and caps
795

 
—

 
—

 
795

 
145

 
—

 
940

Total other income (expense)
(29,487
)
 
1,818

 
(352
)
 
(28,021
)
 
(39,854
)
 
354

 
(67,521
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pretax income (loss)
89,938

 
51,243

 
35,165

 
176,346

 
(66,767
)
 
—

 
109,579

One-time items (1)
4,403

 
2,833

 
—

 
7,236

 
(400
)
 
—

 
6,836

MSR Mark
(1,236
)
 
—

 
—

 
(1,236
)
 
—

 
—

 
(1,236
)
Core pretax income
$
93,105

 
$
54,076

 
$
35,165

 
$
182,346

 
$
(67,167
)
 
$
—

 
$
115,179

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per share
 
 
 
 
 
 
 
 
 
 
 
 
$
1.22

Core earnings per share
 
 
 
 
 
 
 
 
 
 
 
 
$
0.80

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

(1) One-time items include gain on sale of facility in Scottsbluff, expenses related to the retirement of 10 7/8 unsecured notes, expenses related to the originations platform consolidation, expenses related to the completion of the sale of advances to NRZ and severance expenses related to consolidation of servicing operations.














11




SEGMENT INCOME STATEMENT
(dollars in thousands)
 
For the quarter ended June 30, 2014
 
Servicing
 
Originations
 
Solutionstar
 
Operating
 
Corporate and Other
 
Elim.
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
Servicing fee income
$
280,199

 
$
212

 
$
5

 
280,416

 
$
275

 
$
(22,592
)
 
258,099

Other fee income
21,798

 
13,689

 
83,359

 
118,846

 
(128
)
 
—

 
118,718

Total fee income
301,997

 
13,901

 
83,364

 
399,262

 
147

 
(22,592
)
 
376,817

Gain on mortgage loans held for sale
(130
)
 
151,201

 
—

 
151,071

 
(379
)
 
22,224

 
172,916

Total revenues
301,867

 
165,102

 
83,364

 
550,333

 
(232
)
 
(368
)
 
549,733

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total expenses and impairments
185,690

 
97,084

 
45,510

 
328,284

 
18,427

 
—

 
346,711

Other income (expense)
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
22,158

 
17,327

 
—

 
39,485

 
3,088

 
368

 
42,941

Interest expense
(70,014
)
 
(16,711
)
 
(90
)
 
(86,815
)
 
(52,607
)
 
—

 
(139,422
)
Loss on interest rate swaps and caps
(1,195
)
 
—

 
—

 
(1,195
)
 
242

 
—

 
(953
)
Total other income (expense)
(49,051
)
 
616

 
(90
)
 
(48,525
)
 
(49,277
)
 
368

 
(97,434
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pretax income (loss)
67,126

 
68,634

 
37,764

 
173,524

 
(67,936
)
 
—

 
105,588

One time items
25,730

 
—

 
—

 
25,730

 
—

 
—

 
25,730

MSR mark to market
(6,682
)
 
—

 
—

 
(6,682
)
 
—

 
—

 
(6,682
)
Core pretax income
$
86,174

 
$
68,634

 
$
37,764

 
192,572

 
$
(67,936
)
 
$
—

 
124,636

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per share
 
 
 
 
 
 
 
 
 
 
 
 
$
0.74

Core earnings per share  
 
 
 
 
 
 
 
 
 
 
 
 
$
0.87

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 







12