Nationstar Mortgage Holdings, Inc. today announced a hefty 174 percent increase in its 2014 second quarter earnings compared to its first quarter earnings for this year.
The Texas company reported a quarterly net income of $67 million, or $0.74 per share, for the second quarter that ended June 3. This number translates into a 174 percent increase over the $24 million, or $0.27 per share, it earned during its first quarter in 2014. Nationstar achieved the big boost in its pretax income from its mortgage origination business, despite a 6 percent drop in funded loans.
“The continued execution of our strategic plan produced growth across all of our segments and key financial metrics,” said Jay Bray, Nationstar CEO. “Nationstar continues to deliver increasing profits and cash flows quarter over quarter by executing on our strategic initiatives. We are excited about the earnings power of our existing platforms as well as the continued build-out of our comprehensive digital real estate service offerings. Our goal is to be the premier real estate services provider to residential owners, buyers, sellers, agents and investors.”
The company’s servicing portfolio, as measured by unpaid principal balance (UPB), ended the second quarter nearly unchanged from first quarter levels, due to $10 billion of new servicing assets generated through acquisitions and the originations platform, according to Nationstar sources.
Since the end of the second quarter, Nationstar already has commitments for over $20 billion in additional servicing acquisitions. Nationstar’s pipeline of acquisition opportunities totals over $300 billion in aggregate UPB.
As a part of the report, the company said that Solutionstar’s revenues grew due to a strong increase in order volume in its real estate services division and the continued success of the HomeSearch.com platform in effectively marketing properties.
Solutionstar’s pretax margin increased in the second quarter to 46 percent from 40 percent in the first quarter, primarily due to mix of revenues. Solutionstar’s results for all periods are reflected to adjust the referral fees typically earned by servicers.
Solutionstar sold nearly 5,700 properties in the second quarter and is expected to achieve more than 20,000 total 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.
Total originations revenue and pretax income grew sequentially principally due to an increase in gain on sale. Core pretax income margin increased 35 percent as a function of Nationstar’s continued focus on the consumer direct channel, which presents a significant opportunity and partially insulates volatility in volume compared to the broader market.