NYSE:RITM Rithm Capital Q4 2024 Earnings Report $12.26 +0.07 (+0.57%) Closing price 08/8/2025 03:59 PM EasternExtended Trading$12.24 -0.02 (-0.12%) As of 08/8/2025 07:59 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. ProfileEarnings HistoryForecast Rithm Capital EPS ResultsActual EPS$0.60Consensus EPS $0.44Beat/MissBeat by +$0.16One Year Ago EPSN/ARithm Capital Revenue ResultsActual RevenueN/AExpected Revenue$1.22 billionBeat/MissN/AYoY Revenue GrowthN/ARithm Capital Announcement DetailsQuarterQ4 2024Date2/6/2025TimeBefore Market OpensConference Call DateThursday, February 6, 2025Conference Call Time8:00AM ETConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Annual Report (10-K)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Rithm Capital Q4 2024 Earnings Call TranscriptProvided by QuartrFebruary 6, 2025 ShareLink copied to clipboard.Key Takeaways Strong financial performance: Rhythm and Sculptor together manage $80 billion in AUM with $7.8 billion of permanent capital, generated over $1 billion in annual earnings, and delivered 76% earnings growth since Q1 2021 alongside a 9.2% dividend yield. Mortgage segment momentum: NewRez reported Q4 pretax income excluding MTM of $280 million (up 12% QoQ) with a 20% ROE and full-year pretax income of $1 billion (up 26% YoY), ranking as the #3 servicer with $844 billion in servicing and the #5 originator at $59 billion funded in 2024. Private credit success: Genesis Capital origination jumped from $2 billion at acquisition in 2021 to $3.6 billion in 2024, with EBITDA rising from $40 million to $100 million, capitalizing on bank pullbacks in construction and CRE lending. Growth initiatives underway: The company is integrating Sculptor’s strong multi-strategy and real estate funds, expanding into asset-based finance and preparing to launch a global energy infrastructure platform, while raising private capital and evaluating a C-corp/REIT restructuring. Valuation headwinds: Despite $1 billion in annual earnings, Rhythm trades at about 6× earnings versus peers at ~30×, underscoring an undervaluation risk and emphasizing the need to scale its REIT platform before potential spin-outs. AI Generated. May Contain Errors.Conference Call Audio Live Call not available Earnings Conference CallRithm Capital Q4 202400:00 / 00:00Speed:1x1.25x1.5x2xTranscript SectionsPresentationParticipantsPresentationSkip to Participants Operator00:00:00Good day, and welcome to the Rhythm Capital Fourth Quarter and Full Year twenty twenty four Earnings Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Emma Vola, Associate General Counsel. Please go ahead. Emma BollaAssociate General Counsel at Rithm Capital00:00:41Thank you and good morning everyone. I would like to thank you for joining us today for Rhythm Capital's fourth quarter and full year twenty twenty four earnings call. Joining me today are Michael Nirenberg, Chairman, CEO and President of Rhythm Capital Nick Santoro, Chief Financial Officer of Rhythm Capital and Baron Silverstein, President of NUREZ. Throughout the call, we are going to reference the earnings supplement that was posted this morning to the Rhythm Capital website, www.rhythmcap.com. If you've not already done so, I'd encourage you to download the presentation now. Emma BollaAssociate General Counsel at Rithm Capital00:01:14I would like to point out that certain statements made today will be forward looking statements. These statements by their nature are uncertain and may differ materially from actual results. I encourage you to review the disclaimers in our press release and earnings supplement regarding forward looking statements and to review the risk factors contained in our annual and quarterly reports filed with the SEC. In addition, we will be discussing some non GAAP financial measures during today's call. Reconciliations of these measures to the most directly comparable GAAP measures can be found in our earnings supplement. Emma BollaAssociate General Counsel at Rithm Capital00:01:44And with that, I will turn the call over to Michael. Michael NierenbergChairman, President & CEO at Rithm Capital00:01:48Thanks, Emma. Good morning, everyone. I want to welcome you to our fourth quarter and full year call for Rhythm. The company had a great fourth quarter and a great year. What I thought I would do today, which is a little bit different than our typical earnings call, I figured I would take a step back and talk about the Rhythm story for a minute. Michael NierenbergChairman, President & CEO at Rithm Capital00:02:07When you look at Rhythm, you may ask who are we? We began the company in 2013 while at Fortress to acquire MSRs from banks as Basel III capital rules made them too costly for banks to hold. The company which started with $1,000,000,000 of capital today has grown to $7,800,000,000 of permanent capital. Along the way, we grew our asset management business and we began building and acquiring operating companies. In 2022, the Board acquired the management contract of new residential from Fortress and then we began the next leg of our journey, which was to continue building a world class asset management firm. Michael NierenbergChairman, President & CEO at Rithm Capital00:02:46Our thought was to go out and raise third party capital. So if you think about it, while at Fortress, all the capital and all the growth of the company was done in the public markets. So to not confuse that story, we built it in the public markets. As we looked at the next leg of our lives, we said, let's go raise private capital. So in August of twenty twenty two, we changed our name to Rhythm Capital. Michael NierenbergChairman, President & CEO at Rithm Capital00:03:09While we still operate as a REIT, we continue to evaluate the benefits of changing our capital structure. There are still some things to do in order for us to get there. Today, when I look at the firm and we look at the firm, we have what I believe is a complete product offering for shareholders and LPs in all asset classes ranging from real estate to credit, including the new hot word in the private capital sector of ABF, which is asset based finance, something that we've been doing our whole careers. Another exciting thing is we expect to announce soon, probably in the next thirty days, a global energy infrastructure platform with scale capital partners, which will be supplying power to data centers across the world. When I think about our business, I like to think about why us. Michael NierenbergChairman, President & CEO at Rithm Capital00:03:58One, results. We must have performance to grow our business. Two, we're very different than other asset managers. We have the ability to manufacture assets through our operating businesses. We underwrite, originate and service the assets from beginning to end. Michael NierenbergChairman, President & CEO at Rithm Capital00:04:15Servicing matters. We've been in a very benign credit cycle for many, many years and at some point that will turn and having the third largest mortgage company or servicer here in The United States is going to make a big difference for our business. Our asset management business, many of you know we acquired Sculptor in November of twenty twenty three. We've been together for one year and the business is doing great. The results are great and we look forward to future growth there as well. Michael NierenbergChairman, President & CEO at Rithm Capital00:04:44So our value prop is the following. Results first again. When you look at the family of all of our companies on the investment side between Rhythm, Sculptor and some of our other investment areas, we have over 400 individuals. Our operating business lines have approximately 7,000 people. Number two, when I look at our equity, when looking at the sum of the parts, we're severely undervalued. Michael NierenbergChairman, President & CEO at Rithm Capital00:05:09And I know as we continue to as we trade as a REIT like others that trade a REIT either trade a book, a slightly above book or below book, I think that the sector is extremely undervalued relative to when you see other asset managers trading at 30x DE. Our manufacturing engine for assets differentiates us from others. We can differentiate our product offerings. We can create whatever product offering one of our LPs would like. So I'll now refer to our supplement which has been posted online. Michael NierenbergChairman, President & CEO at Rithm Capital00:05:37I'm going to start with Page three. I'll go through most of the slides. Baron will hit the mortgage company and then we'll go to Q and A. So when you look at the company today between Rhythm and Sculptor, assets really being managed, Rhythm has a $45,000,000,000 balance sheet, Sculptor has about $35,000,000,000 of AUM, the combined entity is about $80,000,000,000 of AUM, $7,800,000,000 of permanent capital and the company makes a little north of $1,000,000,000 a year. When you look at growth, 76% earnings growth since the first quarter of twenty twenty one. Michael NierenbergChairman, President & CEO at Rithm Capital00:06:13To the right side of the page, you can have a look. New Res, our mortgage company, obviously, scoped to the asset management business in the private markets. Genesis Capital, one of the largest non bank constructionRTL lenders in the business. Last year in June, we took over the management contract of something called Great Ajax. It was kind of a broken REIT. Michael NierenbergChairman, President & CEO at Rithm Capital00:06:36We renamed it Rhythm Property Trust with the intent of growing that into quite frankly like a Rhythm, like what others have done in the public markets around externally managed vehicles. And then we have a small SFR business in the door. Financial highlights Page four. Year over year growth in earnings 27%. Earnings available for distribution 2.1 As I look at Q4, GAAP net income $263,000,000 or $0.5 per diluted share, return on equity 16%. Michael NierenbergChairman, President & CEO at Rithm Capital00:07:10Earnings available for distribution, dollars $316,000,000 or $0.6 per diluted share. Return on equity, 20. When you look at our dividend, it's still 9.2% and we still pay $0.25 in per common share. Book value, we ended the year at $12.56 which I think is pretty much unchanged versus the prior year. And today, our book value is in and around the same. Michael NierenbergChairman, President & CEO at Rithm Capital00:07:37For fiscal year twenty twenty four, full year GAAP net income $835,000,000 or $1.67 per diluted share, 14% return on equity that includes marks and other things. Earnings available for distribution, $1.150000000.00 dollars 2 point 1 0 dollars per diluted share and a 17% return on equity. And then again, the dividend yield of 9.2%, we pay $1 a year. Page five, year end review. Genesis Capital, we acquired this company from Goldman's Merchant Bank in I believe it was December of twenty twenty one. Michael NierenbergChairman, President & CEO at Rithm Capital00:08:15At that time they were doing about $2,000,000,000 in origination. This year we did $3,600,000,000 When we acquired the company the EBITDA number was about $40,000,000 Today, it's doing about in and around $100,000,000 of EBITDA. So it's been a great success story. Obviously, with banks and regional banks pulling back in certain areas, this company is poised for success and it's also poised for a lot of growth. The asset management side, as I pointed out, we're one year in with Sculptor, that's our asset management arm. Michael NierenbergChairman, President & CEO at Rithm Capital00:08:44Returns have been super. I mean, if you look at the multi strat fund last year 18% growth or 13.5% net. And if you look at some of the other businesses around the real estate side and I'll get into that when we look at some of the sculpture slides, this great performance and it echoes my opening remarks that the only thing we care about is performance first. Performance first is going to lead to more AUM growth. It's not the other way around for us. Michael NierenbergChairman, President & CEO at Rithm Capital00:09:08When I look at the investment portfolio, we did seven seconduritizations in '24, little under $3,000,000,000 We invested $1,800,000,000 in residential mortgage assets. And one of the interesting deals we did and this is very popular with a lot of LPs, we invested $200,000,000 of equity in a large SRT transaction with a large bank where effectively we took a slice of a mortgage warehouse. Why us? Because we have the operational capacity in the event that there was something that went awry with one of their underlying mortgage bankers. And then numerous again, very proud of this company, proud of the team. Michael NierenbergChairman, President & CEO at Rithm Capital00:09:44Baron's done a great job as has his leadership team. Top three U. S. Mortgage servicer in total, top five U. S. Michael NierenbergChairman, President & CEO at Rithm Capital00:09:52Mortgage originator in total. And keep in mind, when we were at Fortress, we built Mr. Cooper, which was formerly known as Nationstar. We started this company from scratch in 2018. So very, very proud of the team and the results that we have there. Michael NierenbergChairman, President & CEO at Rithm Capital00:10:07And that company is just poised to grow and I think a lot of it and Baron will talk to that in a little bit. When I look at our foundation for growth, we going to continue to try to grow our third party asset management business. We want to shrink our balance sheet. We want to do things more again off balance sheet. If you look to the right side of the page here, Rhythm Property Trust I pointed out, that was an opportunistic situation. Michael NierenbergChairman, President & CEO at Rithm Capital00:10:31Effectively, we just took over the management contract. The team has done a great job on that. We took it over in June. It was losing money. We actually got it to at the end of Q4 where the company is flat to now making money and that should continue to grow. Michael NierenbergChairman, President & CEO at Rithm Capital00:10:45This for Rhythm shareholders that is an external managed vehicle. So management fees as we grow that will feed to the bottom line. Asset based finance, the hot topic, everywhere, every asset manager, everywhere is talking about that. So it's so called $30,000,000,000,000 opportunity. We've been doing this our whole life. Michael NierenbergChairman, President & CEO at Rithm Capital00:11:05Energy transition, I pointed out, we're going to be partnering and launching a global energy infrastructure fund. What's going to happen there is we're going to partner with a couple of our old Fortress colleagues, bring in third party capital. There was a huge shortage obviously of power. I mean, we're not going to get in on the Q and A. We don't need to get into the deep sea stuff. Michael NierenbergChairman, President & CEO at Rithm Capital00:11:27But what I would say is world class team, we won't enter a vertical unless we have the expertise and we're super pumped for that because the need for power around the globe is massive and the amount of capital needed to fund all this power, whether you're building power plants or you're funding some of these hyper scalers is going to be immense. So we're really excited about that. So that's Page six. Some of the parts, I'm not going to spend a ton of time here. Bottom line is I think our equity is extremely cheap. Michael NierenbergChairman, President & CEO at Rithm Capital00:11:58I look at asset managers where they trade. If you think about it, we make $1,000,000,000 we trade at six and change times. We have asset management. We have operating businesses. The company is extremely undervalued. Michael NierenbergChairman, President & CEO at Rithm Capital00:12:12I think at some point, and I thought about this coming into the beginning of the year, the market should be looking at some of the REITs and the real earnings potential around not only us, but just others and what people are doing in that sector. If you think about something at 30 times or something that's steady $1,000,000,000 at six times, I know where I would think about it. Capital deployment on Page six, this just shows going back to 2021 how we've grown our earnings. We've grown it strategically. We have focused on sectors that we believe are going to generate mid teens or teens returns. Michael NierenbergChairman, President & CEO at Rithm Capital00:12:51So when you have a look, earnings growth again up 76% since 2021 and our EAD from a CAGR standpoint is up 16%. So very again, very proud of that. Just a couple quick points here on Genesis. I mentioned before bought the company in 2021, another great team. The team here at Rhythm works very closely with them. Michael NierenbergChairman, President & CEO at Rithm Capital00:13:16I expect this business to we got to be sensitive to credit obviously because as I pointed out in my opening remarks, we've been in a very benign credit environment for many years. While saying that, there's $3,600,000,000 with $100,000,000 of EBITDA, I expect that to continue to grow. The asset class itself is very much in vogue. It's a mid teens type return and we're seeing a lot of demand from LPs for that type of product. A lot of different sponsors and I think the upside there when you look at unfortunately some of the disasters happening, whether it be on the West Coast and other places, we're poised to make loans in those areas. Michael NierenbergChairman, President & CEO at Rithm Capital00:13:58On the I'm going to flip to the sculpture slide. Page 13, obviously, when we bought Sculptor and we closed in November, I think it was the November 19 in 2023. So truly one full year in. Returns have been great. Fundraising is going extremely well. Michael NierenbergChairman, President & CEO at Rithm Capital00:14:17When I look at or we all collectively look at the teams, world class real estate business, world class multi strat business, credit we're looking at, we're going look to continue to try to grow that business over time. We restarted the CLO platform last year and we've also accelerated some growth in a Sculptor non traded REIT. The other thing what I would say around Rhythm and Sculptor, Rhythm is a true partner to Sculptor. So when we look at things that Sculptor can do, whether it be launching a fund or something, it's very likely that the support from Rhythm will enable us to participate not only in that fund, but help grow those funds over time. Page 14, just the performance. Michael NierenbergChairman, President & CEO at Rithm Capital00:15:00Again, if you look at the Sculptor Tactical Credit Fund, for example, 25% gross, almost 20% net, fantastic. You look at the realest the multi strat I pointed out earlier, 'eighteen gross 13.5 net. And then when you look at the real estate business, again, these guys are guys and gals are world class business, second to none. When they go out with funds, I think we'd expect those to be oversubscribed. Finally, I'll talk to Rhythm Property Trust and I'll turn it over to Barron. Michael NierenbergChairman, President & CEO at Rithm Capital00:15:33Again, this is the so called broken REIT we took over in June. Right now it's got about $250,000,000 of equity in it. It earns a management fee and a promote. So as we continue to grow that and take advantage of dislocations in the commercial real estate market, it's our expectations that this vehicle could grow into a multi billion dollar vehicle. With that, I'm going to turn it over to Barron, who will talk about NewRez. Baron SilversteinPresident at NewRez LLC00:16:00Thank you, Michael, and good morning to everybody. So I'm turning to Slide 20. And NewRez delivered another strong quarter with fourth quarter pretax income excluding mark to market of approximately $280,000,000 which is an increase of 12% quarter over quarter and delivering a 20% ROE. We also finished the full year of 2024 with approximately $1,000,000,000 in pretax income, and that's up 26% year over year with a 19% ROE. These results though reflect the change in segment reporting by including MSRs that were previously reported as serviced by others and the MSR hedge that were reported in the investment portfolio segment. Baron SilversteinPresident at NewRez LLC00:16:47And we believe this change more accurately reflects the economics of Rhythm's origination and servicing segment, which is new res overall and more closely resembles industry norms across our sector. And overall, we continue to gain momentum and these results show the power of our platform. We have $844,000,000,000 in total servicing, now the number three servicer and $59,000,000,000 in funded volume for 2024 with the number five originator. Turning to Slide '21, you can also see that we remain in growth mode. The last few years really present the effectiveness of our well balanced platform by taking advantage of origination opportunities and servicing opportunities regardless of market conditions. Baron SilversteinPresident at NewRez LLC00:17:36Our 2025 strategy is no different. We don't chase market share nor that we have a hope that rates will come down. We remain focused on growing our brand presence and delivering best in class customer experience in order to maximize customer retention and recapture. Growing our B2B platforms is also focused on building new partnerships, increasing wallet share with our existing customer base and also being opportunistic on MSR and platform acquisitions. These initiatives coupled with our operational excellence and improved efficiency through our AI initiatives and our technology continue to support our financial performance. Baron SilversteinPresident at NewRez LLC00:18:16Turning and moving to Slide 22. Our origination business also continues to perform well. We funded approximately $17,000,000,000 in the fourth quarter, which is up 9% quarter over quarter and ninety six million dollars in originations PTI, up 19% from last quarter. This quarter is our best performance financial performance since 2021. On margins, and while the market always remains competitive, we are able to improve our average margins to 131 basis points, up eight basis points overall quarter over quarter, while maintaining market share. Baron SilversteinPresident at NewRez LLC00:18:55And while all of our channels were profitable in 2024, our multi channel strategy allows us to optimize on opportunities in all market opportunities. And this is shown by $270,000,000 of originations PTI for the full year, which is up 1200% year over year. And as I mentioned before, one of our top priorities in our biggest opportunities is our ability to retain our customers, which takes us to Slide '23, right? Our portfolio now sits at 3,700,000.0 customers and the scale affords significant opportunities for portfolio recapture and customer growth through future cross sell strategies. Our ability to grow our origination business is focused on being able to deliver recapture even without a rate rally and that includes cash out refis, home equity loans, purchase transactions to our existing customer base. Baron SilversteinPresident at NewRez LLC00:19:52But delivering our brand and making investments and building digital tools to enhance our customer experience is key to our success. Moving to Slide 24, our servicing business also continues to perform well. Our total managed servicing portfolio is $844,000,000,000 which is comprised of $525,000,000,000 of owned MSRs directly serviced by NewRez, sixty five billion dollars of owned MSRs serviced by others and $254,000,000,000 of third party servicing. As I mentioned before, the financials related to serviced by others portfolio is now reported in the NewRez or the Originations and Servicing segment. But it's important to note that we, NewRez, have always been actively managing these SDO MSRs and the performance of these third party servicers to ensure alignment to our standards. Baron SilversteinPresident at NewRez LLC00:20:44Our third party servicing franchise also had a great quarter. We added $21,000,000,000 in net notional UPB, which is up 9% quarter over quarter, continuing to gain wallet share with our existing customer base and also adding new customers, right? But our performance is always driven and continues to be driven by our operational efficiency through our proprietary technology, our scale and cost leadership, and that is seen in our ability to transfer $1,200,000 loans in 2024. On Slide 25, you see our owned MSR performance, which not surprisingly is reflective of market conditions with higher interest rates and low prepayment speeds, and I'm not going to spend a lot of time on that. Moving to Slide 26, right, on our market leading special servicing franchise is really our presentation on our core capability of our overall platform. Baron SilversteinPresident at NewRez LLC00:21:42It's an important business for us as it is both fee based, capital light and provides significant operating leverage to our platform. While delinquencies remain low from a historical context and Michael talked about that, you can see in the chart on the bottom left that delinquencies are slowly on the rise and we help homeowners find a solution to stay in their home. This is proven not only with our third party clients continue to grow with us, but also through our performance shown on the right side of the slide as well as supporting homeowners in times of need like the recent hurricanes fires. I continue to believe our business is as best positioned as it ever has been, and I'm looking forward to continuing telling the NewRez growth story in 'twenty five. Back to you, Michael. Michael NierenbergChairman, President & CEO at Rithm Capital00:22:29Thanks. Operator, if we could just turn and open up the lines for Q and A, that would be great. Operator00:22:36We will now begin the question and answer session. The first question comes from Bose George with KBW. Please go ahead. Bose GeorgeManaging Director at Keefe, Bruyette & Woods (KBW)00:23:10Hey, good morning. Could you give us any updated thoughts on the potential listing of new res in 2025? And then could you also just tie that into your comments, Michael, in your prepared remarks about potential changes in the capital structure at Rhythm? Michael NierenbergChairman, President & CEO at Rithm Capital00:23:26Sure. So we're not there yet on listing the company. We are if you had talked to Nick and the team, we've taken steps to have separate segment reporting where everything is now listed at the mortgage company. So you have a clear view into how that company is doing. I think the big part for us is how do we think about shareholders and not just at the mortgage company level quite frankly and get the proper multiple for how we see ourselves in the business. Michael NierenbergChairman, President & CEO at Rithm Capital00:23:58That's one of the reasons why I opened up a little different than I typically do. There's some pieces that need to come into play. One is we need to if we were going to do that, we want to grow our REIT. So So you'd have a dedicated REIT, you'd have a C corp up top, no different than some of the best in class asset managers. And then we'd have our operating companies below. Michael NierenbergChairman, President & CEO at Rithm Capital00:24:22So that's really the path we're on. I will say the M and A pipeline of stuff that we're looking at is extremely robust, whether that be on the asset management side and just some of the other things that manufacturing businesses as I refer to them in our opening remarks. But to tell you today that we're going to list the company, I can't do that. But we are working on our capital structure and we hope to have some change in that. We put a lot of thought and talked to have some good thoughtful board discussions. Michael NierenbergChairman, President & CEO at Rithm Capital00:24:53I'm hopeful at some point down the road that we'll get there. But we need to grow some scale in the REIT right now. Bose GeorgeManaging Director at Keefe, Bruyette & Woods (KBW)00:24:58Okay. That's helpful. Thanks. And just in terms of timeline that suggests that it's probably not a 2025 event while you sort of build out the other pieces. Is that fair? Michael NierenbergChairman, President & CEO at Rithm Capital00:25:09No. I mean, I'd like to do it in 2024, but that's gone. So I think if we can get it done in 2025, we absolutely will because I still believe that our common is fundamentally undervalued. Bose GeorgeManaging Director at Keefe, Bruyette & Woods (KBW)00:25:25Okay, great. And actually just another quick one. The SPAC, I know you can't discuss it, but is that would that be part of Sculptor to the extent that happens? Michael NierenbergChairman, President & CEO at Rithm Capital00:25:35If it does happen, it will be a rhythm company. I can't go into a lot of details, but the way we think about the business, if we could create more fee earning businesses that flow up to the parent company, we're going to do that. And as we think about diversification, there are certain types of vehicles that we could potentially explore. Bose GeorgeManaging Director at Keefe, Bruyette & Woods (KBW)00:25:58Okay, great. Makes sense. Thanks. Michael NierenbergChairman, President & CEO at Rithm Capital00:26:01Thanks. Operator00:26:03The next question comes from Doug Harter with UBS. Please go ahead. Douglas HarterEquity Research Analyst at UBS Group00:26:10Thanks. Michael, you talked about scaling up the REIT in your last answer. Just what assets do you find attractive and kind of how would you look to scale up the REIT? Michael NierenbergChairman, President & CEO at Rithm Capital00:26:24Doug, I think it's more of the same in what we do. If you look at the business, we've allocated a lot of capital. We allocate more and more capital to the mortgage company has a lot of capital. Obviously, the MSR business has been extremely Baron pointed out, I think we have a little under $850,000,000,000 and continue to grow the third party servicing there. When you look at you have a, just give or take for purposes of this discussion four forty or four point five ten year note, you have mortgages trading 120, one hundred and 30 in the agency market, you look at some of the non QM assets that we actually produce or you look at the Genesis side that what we can produce, I think that's where you're going to see growth on the REIT side. Douglas HarterEquity Research Analyst at UBS Group00:27:16Just along those lines, do you how do you see kind of the investor property loans today, other private label securitizations and kind of what impact do the Washington discussions around the GSEs have on those opportunities? Michael NierenbergChairman, President & CEO at Rithm Capital00:27:37When and if that happens, I think that we are going to be so well positioned between our capital base, the OPs that we have in our system and our mortgage company, which I think is in a class it's a world class mortgage company. So whether they be investor loans, whether if the agencies went back to the old way where they get privatized, keep in mind, in the old days, G fees were, what are they, 25 basis points or something, give or take that, right, Baron? You look at where they are, they're 50 basis points today. So there's probably some given. Part of that could be as you think about the reinsurance market around how that could possibly work. Michael NierenbergChairman, President & CEO at Rithm Capital00:28:20And I think that could work. But I think we will be extremely well positioned for that. And I'd like to see it, quite frankly. Douglas HarterEquity Research Analyst at UBS Group00:28:29And Michael, just one more if I could. Just on your comments about growing and scaling the REIT, can you do that with your existing capital base or would you need to raise additional capital to do that? Michael NierenbergChairman, President & CEO at Rithm Capital00:28:41It depends. It could be a combination of both. Keep in mind, most REITs tend to operate by themselves. There's not a lot of M and A activity in the REIT space. When I look at our business and think about permanent capital and having a little under $8,000,000,000 that's a good place to be away from our so called asset management arm. Michael NierenbergChairman, President & CEO at Rithm Capital00:29:01So if we could grow that and then at some point create management fees, I think we're off to the races. Douglas HarterEquity Research Analyst at UBS Group00:29:08Great. Thank you. Michael NierenbergChairman, President & CEO at Rithm Capital00:29:10Thanks, Doug. Operator00:29:13The next question comes from Kenneth Lee with RBC Capital Markets. Please go ahead. Kenneth LeeVice President at RBC Capital Markets00:29:19Hey, thanks for taking my question. Good morning. Just Just one on Sculptor. You talked about some initiatives to grow the credit business. Wondering if I can get a little bit more detail in terms of what particular initiatives and what are your expectations in terms of fundraising for this year? Michael NierenbergChairman, President & CEO at Rithm Capital00:29:43So on the initiatives, it's more of the same. It's lead with performance. Performance is going to bring in more AUM. The team, there's a large capital formation team. Everybody's out on the road and seeing LPs. Michael NierenbergChairman, President & CEO at Rithm Capital00:29:59When I think about the initiatives to actually grow whether it be credit and some of the other businesses, there's two ways really to do it, right? You could do some in M and A, but we can't be the folks that are going to pay 20 or 30x on a multiple basis. So it could be some there's a couple of different platforms out there that we're actually looking at. But I think real performance is going to bring in a lot more capital. If you think about it, the company is a great company, obviously in the press for a bit. Michael NierenbergChairman, President & CEO at Rithm Capital00:30:31But out on the other side, a year end change removed, performance great everywhere. So I'm excited. We all talk to a lot of LPs and I think you're going to see we're going to see a fair amount of capital come in. As you think about how much capital to be raised this year, we right now the real estate guys are I can't give you specific numbers, but those guys are doing well. The credit side is doing well. Michael NierenbergChairman, President & CEO at Rithm Capital00:31:01So we expect a pretty good year. We're not Blackstone or Apollo, unfortunately, but there's a lot of room for us out there. Kenneth LeeVice President at RBC Capital Markets00:31:11Got you. Very helpful there. And one follow-up, if I may, just on Sculptor as well. Any updated outlook around the expense base for Sculptor? Is it sort of like still in the investment phase there? Kenneth LeeVice President at RBC Capital Markets00:31:26Just any kind of color around where expenses could trend there? Thanks. Michael NierenbergChairman, President & CEO at Rithm Capital00:31:31I think it's more BAU, honestly. We always evaluate expenses, whether it be at Sculptor, whether it be at the mortgage company, whether we be at Rhythm. Creating synergies obviously across all of our operating platforms will help and we continue to work on those. So we could have some saves at some point. I think, yes, I mean, it's just part of our discipline of Everest management putting up higher earnings for shareholders. Kenneth LeeVice President at RBC Capital Markets00:31:59Got you. Thank you very much. Michael NierenbergChairman, President & CEO at Rithm Capital00:32:02Thank you, Ken. Operator00:32:04The next question comes from Giuliano Bologna with Compass Point. Please go ahead. Giuliano BolognaManaging Director at Compass Point Research & Trading LLC00:32:13Good morning and congrats on the continued performance. One thing I'd be curious about when you think about the kind of growing the REITs, would there be any value or legibility to push assets into the or the property trust structure and use that as a public vehicle? Or would you want to create more separate vehicles over time that have slightly different strategies on the kind of REIT side of the world? Michael NierenbergChairman, President & CEO at Rithm Capital00:32:40I think it's both. We prefer not to transfer assets from one REIT to another, just to be clear on that. We are looking at a transaction for example, now in the commercial real estate sector, where both Rhythm and Rhythm Property Trust will likely participate as two separate entities, because obviously the amount of capital in Rhythm Property Trust is not large enough than when we think about risk and the sheer size of doing any one thing, we want to make sure that we're balanced from a risk perspective. It's going to be more where we'd like to continue to create more vehicles. We want to think about other verticals that we may or may not have been in. Michael NierenbergChairman, President & CEO at Rithm Capital00:33:19I pointed out on the energy infrastructure side, a couple of world class folks building a business, have third party capital commitments, trillions needed for that. That's another example of something that will grow, but that will be more on the private fund side. Giuliano BolognaManaging Director at Compass Point Research & Trading LLC00:33:38And this might be a little bit of a different angle, but there's you've obviously done a great job historically of making acquisitions on the mortgage company or MSR side. I'm curious when you talk about M and A, is there are there any opportunities around the mortgage company originating sorry, originating services and or bulk pools that you might be looking at or are you focused on M and A elsewhere on the platform first? Michael NierenbergChairman, President & CEO at Rithm Capital00:34:04No. Listen, we look at everything. If there's something that's accretive for the capital and for shareholders, we'll have a hard run on it. There's not that many mortgage companies, quite frankly, that are in our opinion from where we sit that are I I shouldn't say worth it, but like we don't need anything else. If there's something that's accretive, obviously we love the MSR asset that's been very good to us and our shareholders. Michael NierenbergChairman, President & CEO at Rithm Capital00:34:30We'll continue to look at that. We're starting to see some real demand for MSR funds as well. So you may see some of that start going off balance sheet and then that frees up some capital too. But what I would say, Juliano, we if there's something out there and we have an M and A team, we look at anything and everything. Just need to have the expertise around the house, actually. Giuliano BolognaManaging Director at Compass Point Research & Trading LLC00:34:54That's helpful. And maybe one last one. You talked about the potential for maybe a C Corp conversion. Is that something that you could pursue in the near term or is there any kind of preference to try and do something with the mortgage company partial IPO wise before you do that or could you pursue a C Corp conversion sooner? Michael NierenbergChairman, President & CEO at Rithm Capital00:35:17I think we could do both honestly, but it's got to be something that's highly accretive for both the shareholders and the company. If you think about that as a REIT, we've paid out, I think since 2021, dollars '5 point '8 billion in dividends. If you had that capital and you compounded that capital, it's my belief, I think, the stock would be in the 20s or it should be anyway. So when we look at all that stuff, all this stuff goes into our calculation. But I think anything is on the table, knowing as we all know each other, if we could do something yesterday, I'd prefer to do it yesterday. Giuliano BolognaManaging Director at Compass Point Research & Trading LLC00:35:58That's very helpful. I appreciate it. And I'll jump back in the queue. Michael NierenbergChairman, President & CEO at Rithm Capital00:36:02Thanks. Operator00:36:04The next question comes from Eric Hagen with BTIG. Please go ahead. Eric HagenManaging Director at BTIG00:36:10Hi, thanks. Good morning, guys. When we look to the investment portfolio and we strip out the leverage that's associated with the hedging of the MSRs, what is the leverage in that portfolio? How stable do you feel like it is there? And do you feel like there's even some room to apply more leverage if new res were to get spun out at some point? Michael NierenbergChairman, President & CEO at Rithm Capital00:36:31Most of the balance sheet, what I would say today is really around two asset classes, MSRs and our hedges in the mortgage company. So if you think about it, whether we have swaps on, whether we have treasuries on, whether we have agency mortgages, that's a big chunk of the overall balance sheet. At the Rhythm level, the other large part, what I would say in the non agency space is the Genesis loans, because we finance those with some of our either banks or insurance companies or do securitizations. So the short answer is we could increase leverage. I think we'll only do that if we think it's prudent. Michael NierenbergChairman, President & CEO at Rithm Capital00:37:12But I don't think we need to right now based on the earnings power of where we sit. Eric HagenManaging Director at BTIG00:37:18Okay. That's helpful. I actually want to ask about Shellpoint because subservicing feels like an increasingly relevant driver of the earnings story at NewRez. I mean, I think you mentioned how much you're subservicing now, maybe you can repeat that. And what was the contribution to earnings from Shellpoint? Eric HagenManaging Director at BTIG00:37:34And do you feel like there's any growth opportunities there even if mortgage rates like stay around these levels and new supply is kind of limited? Baron SilversteinPresident at NewRez LLC00:37:44I mean, look, there continues to be demand on different non agency products, right? NonQM is very, very competitive in the marketplace today. We continue to be the number one special servicer for NonQM assets. So, we continue to see growth. There are opportunities with banks in existing relationships that we take market share based upon how they're positioning. Baron SilversteinPresident at NewRez LLC00:38:13So, we do look at it as continued growth and you see that by us adding more loans in the fourth quarter and our pipeline continues to look strong in 2025. So, I think you're going to continue to see us taking market share, especially given a lot of the dislocation you saw last year in, what I'll say, third party servicing. Eric HagenManaging Director at BTIG00:38:38Yes. Thank you guys so much. Appreciate that. Michael NierenbergChairman, President & CEO at Rithm Capital00:38:42Thanks, Eric. Operator00:38:44The next question comes from Jay McCanless with Wedbush. Please go ahead. Giuliano BolognaManaging Director at Compass Point Research & Trading LLC00:38:50Hey, good morning. Thanks for taking Jay McCanlessSVP - Equity Research at Wedbush Securities00:38:52my questions. Two for me. The first one, just kind of a general market question for '25. If you look at the MBA data, mortgage credit availability is still sitting at levels around 2012, '20 '13. Do you guys think just in general, maybe not simply for Rhythm, but just in general, do we think mortgage credit availability is going to increase going into this year or is some of that going to be dependent what happens with the GSE? Baron SilversteinPresident at NewRez LLC00:39:20I mean, look, Michael has talked about this on prior quarters. We have an expectation that rates are going to stay elevated. So, what you're going to continue to see is that consumers obviously are going to have to deal with the affordability issue of trying to buy a new home. And that's why we're very much focused on our existing book, but we continue to also see consumers looking to move. So you see that in the amount of inventory and housing inventory that's available for sale continues to basically what I'll say is tick up. Baron SilversteinPresident at NewRez LLC00:40:05So, our expectation is you'll probably see a larger purchase market. And we think that home equity loans are going to continue to grow and cash outs are going to continue to grow. Whether or not any of the government programs make an adjustment, I don't really think that's going to be necessarily a 25 impact. But at the same time, our belief is the they're very much focused on affordability. And I think that whatever programs that they adjust are going to basically have that as a focal point as well. Baron SilversteinPresident at NewRez LLC00:40:42So, it is going to be a little bit of a balance. So, I think that mortgage credit availability overall is probably going to stay in its current state in 2025. Michael NierenbergChairman, President & CEO at Rithm Capital00:40:50Insurance is a problem obviously. Yes. Right. I mean the cost of homeownership has gone up. You have rates up. Insurance is a problem. Baron SilversteinPresident at NewRez LLC00:40:58You just had the LA fire. So, yes. And that just drives into affordability consideration as well. Jay McCanlessSVP - Equity Research at Wedbush Securities00:41:09Great. Thank you. And then my second question, you guys talked at the beginning of the call about infrastructure finance and doing some investments there. I guess with some of the changes that we're seeing in the new administration, how does that affect your desire and potential customer desire to do more investments in that space? And are there any headlines, insights, roadmap, whatever, however you want to phrase it, anything that we should be watching for to tell us whether or not you guys are going to get more invested in that space? Michael NierenbergChairman, President & CEO at Rithm Capital00:41:45Great question. It's a little bit early. You heard this morning that the administration wants to ban deep sea. I'm going to tell you that I am not the expert in this stuff. I have two partners and we have two partners who are likely going to join us, world class around this. Michael NierenbergChairman, President & CEO at Rithm Capital00:42:04Everybody's talking about the multi trillion dollar investment opportunity and the huge needs for capital. And that's how we're going to think about it. I mean, I think the world this stuff is going to continue to change. But when I look and I recently sat in some meetings with some of the extremely large, so called hyperscalers, it's a really, really interesting space. You got to have the expertise to do it and you got to have a lot of capital because the world is short power. Michael NierenbergChairman, President & CEO at Rithm Capital00:42:35Whether it's AI or something else, the world is short power. And with our team and our partners, I'm extremely excited about where we could go with this. Jay McCanlessSVP - Equity Research at Wedbush Securities00:42:47Okay. That sounds great. Thanks guys. Appreciate it. Operator00:42:52The next question comes from Matthew Erder with Jones Trading. Please go ahead. Matthew ErdnerDirector at Jones Trading00:42:58Hey, good morning guys. Thanks for taking the question. So turning back to NewRez, the funded volume has continued to increase quarter over quarter. You guys have had great growth there. Kind of within the non QM and home equity space, we've seen a lot of competition there and then there's a lot of other players stepping into the place or into the space. How do you continue to drive market share growth there? Matthew ErdnerDirector at Jones Trading00:43:22Is it investment in your team? Are you guys growing that out? Could you just speak to that a little bit? Thanks. Baron SilversteinPresident at NewRez LLC00:43:29It's an investment in the team. It's investment in our technology. It's an investment in our brand. Those are the three key initiatives across the board, right? We continue to believe there's significant upside for us on just focusing on our own homeowners. Baron SilversteinPresident at NewRez LLC00:43:48We haven't even really if we felt like we wanted to get into new customer acquisition. And we do new customer acquisition on our distributed retail platforms, but and but like on our call centers, it's really just focused internally on our own portfolio and making sure that we're maximizing there. So, I would tell you unequivocally, we are making significant platform investments on all of those initiatives. Operator00:44:21This concludes our question and answer session. I would like to turn the conference back over to Michael Nierenberg for any closing remarks. Michael NierenbergChairman, President & CEO at Rithm Capital00:44:32Well, thanks for everybody's questions. Really thoughtful this morning. Obviously, very excited about where we sit as a business and all of our different business lines and look forward to updating you after Q1. More to come. Have a great day and a great rest of the week. Thanks, everyone. Operator00:44:54The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.Read moreParticipantsExecutivesEmma BollaAssociate General CounselMichael NierenbergChairman, President & CEOAnalystsBaron SilversteinPresident at NewRez LLCBose GeorgeManaging Director at Keefe, Bruyette & Woods (KBW)Douglas HarterEquity Research Analyst at UBS GroupKenneth LeeVice President at RBC Capital MarketsGiuliano BolognaManaging Director at Compass Point Research & Trading LLCEric HagenManaging Director at BTIGJay McCanlessSVP - Equity Research at Wedbush SecuritiesMatthew ErdnerDirector at Jones TradingPowered by Earnings DocumentsSlide DeckPress Release(8-K)Annual report(10-K) Rithm Capital Earnings HeadlinesRithm Capital Corp. (NYSE:RITM) Receives $14.00 Consensus Target Price from BrokeragesAugust 10 at 2:08 AM | americanbankingnews.comRithm Capital: Common Vs. Preferred 'D' StockAugust 7 at 8:00 AM | seekingalpha.comElon’s BIGGEST warning yet?Tesla's About to Prove Everyone Wrong... Again Back in 2018, when Jeff Brown told everyone to buy Tesla… The "experts" said Elon was finished and Tesla was headed for bankruptcy. Now they're saying the same thing, but Jeff has uncovered Tesla's next breakthrough.August 10 at 2:00 AM | Brownstone Research (Ad)Rithm Capital Announces Forward Flow Agreement with Upgrade, Inc. to Acquire $1 Billion in Home Improvement LoansAugust 6, 2025 | finance.yahoo.comWhat is B. Riley's Estimate for Rithm Capital Q4 Earnings?August 2, 2025 | americanbankingnews.comRithm Capital files automatic mixed securities shelfAugust 1, 2025 | msn.comSee More Rithm Capital Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Rithm Capital? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Rithm Capital and other key companies, straight to your email. Email Address About Rithm CapitalRithm Capital (NYSE:RITM) operates as an asset manager focused on real estate, credit, and financial services. It operates through Origination and Servicing, Investment Portfolio, Mortgage Loans Receivable, and Asset Management segments. Its investment portfolio primarily comprises of mortgage servicing rights (MSR), and MSR financing receivables, title, appraisal and property preservation, excess MSRs, and services advance investments; real estate securities, call rights, SFR properties, and residential mortgage loans; consumer and business purpose loans; and asset management related investments. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was formerly known as New Residential Investment Corp. and changed its name to Rithm Capital Corp. in August 2022. 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PresentationSkip to Participants Operator00:00:00Good day, and welcome to the Rhythm Capital Fourth Quarter and Full Year twenty twenty four Earnings Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Emma Vola, Associate General Counsel. Please go ahead. Emma BollaAssociate General Counsel at Rithm Capital00:00:41Thank you and good morning everyone. I would like to thank you for joining us today for Rhythm Capital's fourth quarter and full year twenty twenty four earnings call. Joining me today are Michael Nirenberg, Chairman, CEO and President of Rhythm Capital Nick Santoro, Chief Financial Officer of Rhythm Capital and Baron Silverstein, President of NUREZ. Throughout the call, we are going to reference the earnings supplement that was posted this morning to the Rhythm Capital website, www.rhythmcap.com. If you've not already done so, I'd encourage you to download the presentation now. Emma BollaAssociate General Counsel at Rithm Capital00:01:14I would like to point out that certain statements made today will be forward looking statements. These statements by their nature are uncertain and may differ materially from actual results. I encourage you to review the disclaimers in our press release and earnings supplement regarding forward looking statements and to review the risk factors contained in our annual and quarterly reports filed with the SEC. In addition, we will be discussing some non GAAP financial measures during today's call. Reconciliations of these measures to the most directly comparable GAAP measures can be found in our earnings supplement. Emma BollaAssociate General Counsel at Rithm Capital00:01:44And with that, I will turn the call over to Michael. Michael NierenbergChairman, President & CEO at Rithm Capital00:01:48Thanks, Emma. Good morning, everyone. I want to welcome you to our fourth quarter and full year call for Rhythm. The company had a great fourth quarter and a great year. What I thought I would do today, which is a little bit different than our typical earnings call, I figured I would take a step back and talk about the Rhythm story for a minute. Michael NierenbergChairman, President & CEO at Rithm Capital00:02:07When you look at Rhythm, you may ask who are we? We began the company in 2013 while at Fortress to acquire MSRs from banks as Basel III capital rules made them too costly for banks to hold. The company which started with $1,000,000,000 of capital today has grown to $7,800,000,000 of permanent capital. Along the way, we grew our asset management business and we began building and acquiring operating companies. In 2022, the Board acquired the management contract of new residential from Fortress and then we began the next leg of our journey, which was to continue building a world class asset management firm. Michael NierenbergChairman, President & CEO at Rithm Capital00:02:46Our thought was to go out and raise third party capital. So if you think about it, while at Fortress, all the capital and all the growth of the company was done in the public markets. So to not confuse that story, we built it in the public markets. As we looked at the next leg of our lives, we said, let's go raise private capital. So in August of twenty twenty two, we changed our name to Rhythm Capital. Michael NierenbergChairman, President & CEO at Rithm Capital00:03:09While we still operate as a REIT, we continue to evaluate the benefits of changing our capital structure. There are still some things to do in order for us to get there. Today, when I look at the firm and we look at the firm, we have what I believe is a complete product offering for shareholders and LPs in all asset classes ranging from real estate to credit, including the new hot word in the private capital sector of ABF, which is asset based finance, something that we've been doing our whole careers. Another exciting thing is we expect to announce soon, probably in the next thirty days, a global energy infrastructure platform with scale capital partners, which will be supplying power to data centers across the world. When I think about our business, I like to think about why us. Michael NierenbergChairman, President & CEO at Rithm Capital00:03:58One, results. We must have performance to grow our business. Two, we're very different than other asset managers. We have the ability to manufacture assets through our operating businesses. We underwrite, originate and service the assets from beginning to end. Michael NierenbergChairman, President & CEO at Rithm Capital00:04:15Servicing matters. We've been in a very benign credit cycle for many, many years and at some point that will turn and having the third largest mortgage company or servicer here in The United States is going to make a big difference for our business. Our asset management business, many of you know we acquired Sculptor in November of twenty twenty three. We've been together for one year and the business is doing great. The results are great and we look forward to future growth there as well. Michael NierenbergChairman, President & CEO at Rithm Capital00:04:44So our value prop is the following. Results first again. When you look at the family of all of our companies on the investment side between Rhythm, Sculptor and some of our other investment areas, we have over 400 individuals. Our operating business lines have approximately 7,000 people. Number two, when I look at our equity, when looking at the sum of the parts, we're severely undervalued. Michael NierenbergChairman, President & CEO at Rithm Capital00:05:09And I know as we continue to as we trade as a REIT like others that trade a REIT either trade a book, a slightly above book or below book, I think that the sector is extremely undervalued relative to when you see other asset managers trading at 30x DE. Our manufacturing engine for assets differentiates us from others. We can differentiate our product offerings. We can create whatever product offering one of our LPs would like. So I'll now refer to our supplement which has been posted online. Michael NierenbergChairman, President & CEO at Rithm Capital00:05:37I'm going to start with Page three. I'll go through most of the slides. Baron will hit the mortgage company and then we'll go to Q and A. So when you look at the company today between Rhythm and Sculptor, assets really being managed, Rhythm has a $45,000,000,000 balance sheet, Sculptor has about $35,000,000,000 of AUM, the combined entity is about $80,000,000,000 of AUM, $7,800,000,000 of permanent capital and the company makes a little north of $1,000,000,000 a year. When you look at growth, 76% earnings growth since the first quarter of twenty twenty one. Michael NierenbergChairman, President & CEO at Rithm Capital00:06:13To the right side of the page, you can have a look. New Res, our mortgage company, obviously, scoped to the asset management business in the private markets. Genesis Capital, one of the largest non bank constructionRTL lenders in the business. Last year in June, we took over the management contract of something called Great Ajax. It was kind of a broken REIT. Michael NierenbergChairman, President & CEO at Rithm Capital00:06:36We renamed it Rhythm Property Trust with the intent of growing that into quite frankly like a Rhythm, like what others have done in the public markets around externally managed vehicles. And then we have a small SFR business in the door. Financial highlights Page four. Year over year growth in earnings 27%. Earnings available for distribution 2.1 As I look at Q4, GAAP net income $263,000,000 or $0.5 per diluted share, return on equity 16%. Michael NierenbergChairman, President & CEO at Rithm Capital00:07:10Earnings available for distribution, dollars $316,000,000 or $0.6 per diluted share. Return on equity, 20. When you look at our dividend, it's still 9.2% and we still pay $0.25 in per common share. Book value, we ended the year at $12.56 which I think is pretty much unchanged versus the prior year. And today, our book value is in and around the same. Michael NierenbergChairman, President & CEO at Rithm Capital00:07:37For fiscal year twenty twenty four, full year GAAP net income $835,000,000 or $1.67 per diluted share, 14% return on equity that includes marks and other things. Earnings available for distribution, $1.150000000.00 dollars 2 point 1 0 dollars per diluted share and a 17% return on equity. And then again, the dividend yield of 9.2%, we pay $1 a year. Page five, year end review. Genesis Capital, we acquired this company from Goldman's Merchant Bank in I believe it was December of twenty twenty one. Michael NierenbergChairman, President & CEO at Rithm Capital00:08:15At that time they were doing about $2,000,000,000 in origination. This year we did $3,600,000,000 When we acquired the company the EBITDA number was about $40,000,000 Today, it's doing about in and around $100,000,000 of EBITDA. So it's been a great success story. Obviously, with banks and regional banks pulling back in certain areas, this company is poised for success and it's also poised for a lot of growth. The asset management side, as I pointed out, we're one year in with Sculptor, that's our asset management arm. Michael NierenbergChairman, President & CEO at Rithm Capital00:08:44Returns have been super. I mean, if you look at the multi strat fund last year 18% growth or 13.5% net. And if you look at some of the other businesses around the real estate side and I'll get into that when we look at some of the sculpture slides, this great performance and it echoes my opening remarks that the only thing we care about is performance first. Performance first is going to lead to more AUM growth. It's not the other way around for us. Michael NierenbergChairman, President & CEO at Rithm Capital00:09:08When I look at the investment portfolio, we did seven seconduritizations in '24, little under $3,000,000,000 We invested $1,800,000,000 in residential mortgage assets. And one of the interesting deals we did and this is very popular with a lot of LPs, we invested $200,000,000 of equity in a large SRT transaction with a large bank where effectively we took a slice of a mortgage warehouse. Why us? Because we have the operational capacity in the event that there was something that went awry with one of their underlying mortgage bankers. And then numerous again, very proud of this company, proud of the team. Michael NierenbergChairman, President & CEO at Rithm Capital00:09:44Baron's done a great job as has his leadership team. Top three U. S. Mortgage servicer in total, top five U. S. Michael NierenbergChairman, President & CEO at Rithm Capital00:09:52Mortgage originator in total. And keep in mind, when we were at Fortress, we built Mr. Cooper, which was formerly known as Nationstar. We started this company from scratch in 2018. So very, very proud of the team and the results that we have there. Michael NierenbergChairman, President & CEO at Rithm Capital00:10:07And that company is just poised to grow and I think a lot of it and Baron will talk to that in a little bit. When I look at our foundation for growth, we going to continue to try to grow our third party asset management business. We want to shrink our balance sheet. We want to do things more again off balance sheet. If you look to the right side of the page here, Rhythm Property Trust I pointed out, that was an opportunistic situation. Michael NierenbergChairman, President & CEO at Rithm Capital00:10:31Effectively, we just took over the management contract. The team has done a great job on that. We took it over in June. It was losing money. We actually got it to at the end of Q4 where the company is flat to now making money and that should continue to grow. Michael NierenbergChairman, President & CEO at Rithm Capital00:10:45This for Rhythm shareholders that is an external managed vehicle. So management fees as we grow that will feed to the bottom line. Asset based finance, the hot topic, everywhere, every asset manager, everywhere is talking about that. So it's so called $30,000,000,000,000 opportunity. We've been doing this our whole life. Michael NierenbergChairman, President & CEO at Rithm Capital00:11:05Energy transition, I pointed out, we're going to be partnering and launching a global energy infrastructure fund. What's going to happen there is we're going to partner with a couple of our old Fortress colleagues, bring in third party capital. There was a huge shortage obviously of power. I mean, we're not going to get in on the Q and A. We don't need to get into the deep sea stuff. Michael NierenbergChairman, President & CEO at Rithm Capital00:11:27But what I would say is world class team, we won't enter a vertical unless we have the expertise and we're super pumped for that because the need for power around the globe is massive and the amount of capital needed to fund all this power, whether you're building power plants or you're funding some of these hyper scalers is going to be immense. So we're really excited about that. So that's Page six. Some of the parts, I'm not going to spend a ton of time here. Bottom line is I think our equity is extremely cheap. Michael NierenbergChairman, President & CEO at Rithm Capital00:11:58I look at asset managers where they trade. If you think about it, we make $1,000,000,000 we trade at six and change times. We have asset management. We have operating businesses. The company is extremely undervalued. Michael NierenbergChairman, President & CEO at Rithm Capital00:12:12I think at some point, and I thought about this coming into the beginning of the year, the market should be looking at some of the REITs and the real earnings potential around not only us, but just others and what people are doing in that sector. If you think about something at 30 times or something that's steady $1,000,000,000 at six times, I know where I would think about it. Capital deployment on Page six, this just shows going back to 2021 how we've grown our earnings. We've grown it strategically. We have focused on sectors that we believe are going to generate mid teens or teens returns. Michael NierenbergChairman, President & CEO at Rithm Capital00:12:51So when you have a look, earnings growth again up 76% since 2021 and our EAD from a CAGR standpoint is up 16%. So very again, very proud of that. Just a couple quick points here on Genesis. I mentioned before bought the company in 2021, another great team. The team here at Rhythm works very closely with them. Michael NierenbergChairman, President & CEO at Rithm Capital00:13:16I expect this business to we got to be sensitive to credit obviously because as I pointed out in my opening remarks, we've been in a very benign credit environment for many years. While saying that, there's $3,600,000,000 with $100,000,000 of EBITDA, I expect that to continue to grow. The asset class itself is very much in vogue. It's a mid teens type return and we're seeing a lot of demand from LPs for that type of product. A lot of different sponsors and I think the upside there when you look at unfortunately some of the disasters happening, whether it be on the West Coast and other places, we're poised to make loans in those areas. Michael NierenbergChairman, President & CEO at Rithm Capital00:13:58On the I'm going to flip to the sculpture slide. Page 13, obviously, when we bought Sculptor and we closed in November, I think it was the November 19 in 2023. So truly one full year in. Returns have been great. Fundraising is going extremely well. Michael NierenbergChairman, President & CEO at Rithm Capital00:14:17When I look at or we all collectively look at the teams, world class real estate business, world class multi strat business, credit we're looking at, we're going look to continue to try to grow that business over time. We restarted the CLO platform last year and we've also accelerated some growth in a Sculptor non traded REIT. The other thing what I would say around Rhythm and Sculptor, Rhythm is a true partner to Sculptor. So when we look at things that Sculptor can do, whether it be launching a fund or something, it's very likely that the support from Rhythm will enable us to participate not only in that fund, but help grow those funds over time. Page 14, just the performance. Michael NierenbergChairman, President & CEO at Rithm Capital00:15:00Again, if you look at the Sculptor Tactical Credit Fund, for example, 25% gross, almost 20% net, fantastic. You look at the realest the multi strat I pointed out earlier, 'eighteen gross 13.5 net. And then when you look at the real estate business, again, these guys are guys and gals are world class business, second to none. When they go out with funds, I think we'd expect those to be oversubscribed. Finally, I'll talk to Rhythm Property Trust and I'll turn it over to Barron. Michael NierenbergChairman, President & CEO at Rithm Capital00:15:33Again, this is the so called broken REIT we took over in June. Right now it's got about $250,000,000 of equity in it. It earns a management fee and a promote. So as we continue to grow that and take advantage of dislocations in the commercial real estate market, it's our expectations that this vehicle could grow into a multi billion dollar vehicle. With that, I'm going to turn it over to Barron, who will talk about NewRez. Baron SilversteinPresident at NewRez LLC00:16:00Thank you, Michael, and good morning to everybody. So I'm turning to Slide 20. And NewRez delivered another strong quarter with fourth quarter pretax income excluding mark to market of approximately $280,000,000 which is an increase of 12% quarter over quarter and delivering a 20% ROE. We also finished the full year of 2024 with approximately $1,000,000,000 in pretax income, and that's up 26% year over year with a 19% ROE. These results though reflect the change in segment reporting by including MSRs that were previously reported as serviced by others and the MSR hedge that were reported in the investment portfolio segment. Baron SilversteinPresident at NewRez LLC00:16:47And we believe this change more accurately reflects the economics of Rhythm's origination and servicing segment, which is new res overall and more closely resembles industry norms across our sector. And overall, we continue to gain momentum and these results show the power of our platform. We have $844,000,000,000 in total servicing, now the number three servicer and $59,000,000,000 in funded volume for 2024 with the number five originator. Turning to Slide '21, you can also see that we remain in growth mode. The last few years really present the effectiveness of our well balanced platform by taking advantage of origination opportunities and servicing opportunities regardless of market conditions. Baron SilversteinPresident at NewRez LLC00:17:36Our 2025 strategy is no different. We don't chase market share nor that we have a hope that rates will come down. We remain focused on growing our brand presence and delivering best in class customer experience in order to maximize customer retention and recapture. Growing our B2B platforms is also focused on building new partnerships, increasing wallet share with our existing customer base and also being opportunistic on MSR and platform acquisitions. These initiatives coupled with our operational excellence and improved efficiency through our AI initiatives and our technology continue to support our financial performance. Baron SilversteinPresident at NewRez LLC00:18:16Turning and moving to Slide 22. Our origination business also continues to perform well. We funded approximately $17,000,000,000 in the fourth quarter, which is up 9% quarter over quarter and ninety six million dollars in originations PTI, up 19% from last quarter. This quarter is our best performance financial performance since 2021. On margins, and while the market always remains competitive, we are able to improve our average margins to 131 basis points, up eight basis points overall quarter over quarter, while maintaining market share. Baron SilversteinPresident at NewRez LLC00:18:55And while all of our channels were profitable in 2024, our multi channel strategy allows us to optimize on opportunities in all market opportunities. And this is shown by $270,000,000 of originations PTI for the full year, which is up 1200% year over year. And as I mentioned before, one of our top priorities in our biggest opportunities is our ability to retain our customers, which takes us to Slide '23, right? Our portfolio now sits at 3,700,000.0 customers and the scale affords significant opportunities for portfolio recapture and customer growth through future cross sell strategies. Our ability to grow our origination business is focused on being able to deliver recapture even without a rate rally and that includes cash out refis, home equity loans, purchase transactions to our existing customer base. Baron SilversteinPresident at NewRez LLC00:19:52But delivering our brand and making investments and building digital tools to enhance our customer experience is key to our success. Moving to Slide 24, our servicing business also continues to perform well. Our total managed servicing portfolio is $844,000,000,000 which is comprised of $525,000,000,000 of owned MSRs directly serviced by NewRez, sixty five billion dollars of owned MSRs serviced by others and $254,000,000,000 of third party servicing. As I mentioned before, the financials related to serviced by others portfolio is now reported in the NewRez or the Originations and Servicing segment. But it's important to note that we, NewRez, have always been actively managing these SDO MSRs and the performance of these third party servicers to ensure alignment to our standards. Baron SilversteinPresident at NewRez LLC00:20:44Our third party servicing franchise also had a great quarter. We added $21,000,000,000 in net notional UPB, which is up 9% quarter over quarter, continuing to gain wallet share with our existing customer base and also adding new customers, right? But our performance is always driven and continues to be driven by our operational efficiency through our proprietary technology, our scale and cost leadership, and that is seen in our ability to transfer $1,200,000 loans in 2024. On Slide 25, you see our owned MSR performance, which not surprisingly is reflective of market conditions with higher interest rates and low prepayment speeds, and I'm not going to spend a lot of time on that. Moving to Slide 26, right, on our market leading special servicing franchise is really our presentation on our core capability of our overall platform. Baron SilversteinPresident at NewRez LLC00:21:42It's an important business for us as it is both fee based, capital light and provides significant operating leverage to our platform. While delinquencies remain low from a historical context and Michael talked about that, you can see in the chart on the bottom left that delinquencies are slowly on the rise and we help homeowners find a solution to stay in their home. This is proven not only with our third party clients continue to grow with us, but also through our performance shown on the right side of the slide as well as supporting homeowners in times of need like the recent hurricanes fires. I continue to believe our business is as best positioned as it ever has been, and I'm looking forward to continuing telling the NewRez growth story in 'twenty five. Back to you, Michael. Michael NierenbergChairman, President & CEO at Rithm Capital00:22:29Thanks. Operator, if we could just turn and open up the lines for Q and A, that would be great. Operator00:22:36We will now begin the question and answer session. The first question comes from Bose George with KBW. Please go ahead. Bose GeorgeManaging Director at Keefe, Bruyette & Woods (KBW)00:23:10Hey, good morning. Could you give us any updated thoughts on the potential listing of new res in 2025? And then could you also just tie that into your comments, Michael, in your prepared remarks about potential changes in the capital structure at Rhythm? Michael NierenbergChairman, President & CEO at Rithm Capital00:23:26Sure. So we're not there yet on listing the company. We are if you had talked to Nick and the team, we've taken steps to have separate segment reporting where everything is now listed at the mortgage company. So you have a clear view into how that company is doing. I think the big part for us is how do we think about shareholders and not just at the mortgage company level quite frankly and get the proper multiple for how we see ourselves in the business. Michael NierenbergChairman, President & CEO at Rithm Capital00:23:58That's one of the reasons why I opened up a little different than I typically do. There's some pieces that need to come into play. One is we need to if we were going to do that, we want to grow our REIT. So So you'd have a dedicated REIT, you'd have a C corp up top, no different than some of the best in class asset managers. And then we'd have our operating companies below. Michael NierenbergChairman, President & CEO at Rithm Capital00:24:22So that's really the path we're on. I will say the M and A pipeline of stuff that we're looking at is extremely robust, whether that be on the asset management side and just some of the other things that manufacturing businesses as I refer to them in our opening remarks. But to tell you today that we're going to list the company, I can't do that. But we are working on our capital structure and we hope to have some change in that. We put a lot of thought and talked to have some good thoughtful board discussions. Michael NierenbergChairman, President & CEO at Rithm Capital00:24:53I'm hopeful at some point down the road that we'll get there. But we need to grow some scale in the REIT right now. Bose GeorgeManaging Director at Keefe, Bruyette & Woods (KBW)00:24:58Okay. That's helpful. Thanks. And just in terms of timeline that suggests that it's probably not a 2025 event while you sort of build out the other pieces. Is that fair? Michael NierenbergChairman, President & CEO at Rithm Capital00:25:09No. I mean, I'd like to do it in 2024, but that's gone. So I think if we can get it done in 2025, we absolutely will because I still believe that our common is fundamentally undervalued. Bose GeorgeManaging Director at Keefe, Bruyette & Woods (KBW)00:25:25Okay, great. And actually just another quick one. The SPAC, I know you can't discuss it, but is that would that be part of Sculptor to the extent that happens? Michael NierenbergChairman, President & CEO at Rithm Capital00:25:35If it does happen, it will be a rhythm company. I can't go into a lot of details, but the way we think about the business, if we could create more fee earning businesses that flow up to the parent company, we're going to do that. And as we think about diversification, there are certain types of vehicles that we could potentially explore. Bose GeorgeManaging Director at Keefe, Bruyette & Woods (KBW)00:25:58Okay, great. Makes sense. Thanks. Michael NierenbergChairman, President & CEO at Rithm Capital00:26:01Thanks. Operator00:26:03The next question comes from Doug Harter with UBS. Please go ahead. Douglas HarterEquity Research Analyst at UBS Group00:26:10Thanks. Michael, you talked about scaling up the REIT in your last answer. Just what assets do you find attractive and kind of how would you look to scale up the REIT? Michael NierenbergChairman, President & CEO at Rithm Capital00:26:24Doug, I think it's more of the same in what we do. If you look at the business, we've allocated a lot of capital. We allocate more and more capital to the mortgage company has a lot of capital. Obviously, the MSR business has been extremely Baron pointed out, I think we have a little under $850,000,000,000 and continue to grow the third party servicing there. When you look at you have a, just give or take for purposes of this discussion four forty or four point five ten year note, you have mortgages trading 120, one hundred and 30 in the agency market, you look at some of the non QM assets that we actually produce or you look at the Genesis side that what we can produce, I think that's where you're going to see growth on the REIT side. Douglas HarterEquity Research Analyst at UBS Group00:27:16Just along those lines, do you how do you see kind of the investor property loans today, other private label securitizations and kind of what impact do the Washington discussions around the GSEs have on those opportunities? Michael NierenbergChairman, President & CEO at Rithm Capital00:27:37When and if that happens, I think that we are going to be so well positioned between our capital base, the OPs that we have in our system and our mortgage company, which I think is in a class it's a world class mortgage company. So whether they be investor loans, whether if the agencies went back to the old way where they get privatized, keep in mind, in the old days, G fees were, what are they, 25 basis points or something, give or take that, right, Baron? You look at where they are, they're 50 basis points today. So there's probably some given. Part of that could be as you think about the reinsurance market around how that could possibly work. Michael NierenbergChairman, President & CEO at Rithm Capital00:28:20And I think that could work. But I think we will be extremely well positioned for that. And I'd like to see it, quite frankly. Douglas HarterEquity Research Analyst at UBS Group00:28:29And Michael, just one more if I could. Just on your comments about growing and scaling the REIT, can you do that with your existing capital base or would you need to raise additional capital to do that? Michael NierenbergChairman, President & CEO at Rithm Capital00:28:41It depends. It could be a combination of both. Keep in mind, most REITs tend to operate by themselves. There's not a lot of M and A activity in the REIT space. When I look at our business and think about permanent capital and having a little under $8,000,000,000 that's a good place to be away from our so called asset management arm. Michael NierenbergChairman, President & CEO at Rithm Capital00:29:01So if we could grow that and then at some point create management fees, I think we're off to the races. Douglas HarterEquity Research Analyst at UBS Group00:29:08Great. Thank you. Michael NierenbergChairman, President & CEO at Rithm Capital00:29:10Thanks, Doug. Operator00:29:13The next question comes from Kenneth Lee with RBC Capital Markets. Please go ahead. Kenneth LeeVice President at RBC Capital Markets00:29:19Hey, thanks for taking my question. Good morning. Just Just one on Sculptor. You talked about some initiatives to grow the credit business. Wondering if I can get a little bit more detail in terms of what particular initiatives and what are your expectations in terms of fundraising for this year? Michael NierenbergChairman, President & CEO at Rithm Capital00:29:43So on the initiatives, it's more of the same. It's lead with performance. Performance is going to bring in more AUM. The team, there's a large capital formation team. Everybody's out on the road and seeing LPs. Michael NierenbergChairman, President & CEO at Rithm Capital00:29:59When I think about the initiatives to actually grow whether it be credit and some of the other businesses, there's two ways really to do it, right? You could do some in M and A, but we can't be the folks that are going to pay 20 or 30x on a multiple basis. So it could be some there's a couple of different platforms out there that we're actually looking at. But I think real performance is going to bring in a lot more capital. If you think about it, the company is a great company, obviously in the press for a bit. Michael NierenbergChairman, President & CEO at Rithm Capital00:30:31But out on the other side, a year end change removed, performance great everywhere. So I'm excited. We all talk to a lot of LPs and I think you're going to see we're going to see a fair amount of capital come in. As you think about how much capital to be raised this year, we right now the real estate guys are I can't give you specific numbers, but those guys are doing well. The credit side is doing well. Michael NierenbergChairman, President & CEO at Rithm Capital00:31:01So we expect a pretty good year. We're not Blackstone or Apollo, unfortunately, but there's a lot of room for us out there. Kenneth LeeVice President at RBC Capital Markets00:31:11Got you. Very helpful there. And one follow-up, if I may, just on Sculptor as well. Any updated outlook around the expense base for Sculptor? Is it sort of like still in the investment phase there? Kenneth LeeVice President at RBC Capital Markets00:31:26Just any kind of color around where expenses could trend there? Thanks. Michael NierenbergChairman, President & CEO at Rithm Capital00:31:31I think it's more BAU, honestly. We always evaluate expenses, whether it be at Sculptor, whether it be at the mortgage company, whether we be at Rhythm. Creating synergies obviously across all of our operating platforms will help and we continue to work on those. So we could have some saves at some point. I think, yes, I mean, it's just part of our discipline of Everest management putting up higher earnings for shareholders. Kenneth LeeVice President at RBC Capital Markets00:31:59Got you. Thank you very much. Michael NierenbergChairman, President & CEO at Rithm Capital00:32:02Thank you, Ken. Operator00:32:04The next question comes from Giuliano Bologna with Compass Point. Please go ahead. Giuliano BolognaManaging Director at Compass Point Research & Trading LLC00:32:13Good morning and congrats on the continued performance. One thing I'd be curious about when you think about the kind of growing the REITs, would there be any value or legibility to push assets into the or the property trust structure and use that as a public vehicle? Or would you want to create more separate vehicles over time that have slightly different strategies on the kind of REIT side of the world? Michael NierenbergChairman, President & CEO at Rithm Capital00:32:40I think it's both. We prefer not to transfer assets from one REIT to another, just to be clear on that. We are looking at a transaction for example, now in the commercial real estate sector, where both Rhythm and Rhythm Property Trust will likely participate as two separate entities, because obviously the amount of capital in Rhythm Property Trust is not large enough than when we think about risk and the sheer size of doing any one thing, we want to make sure that we're balanced from a risk perspective. It's going to be more where we'd like to continue to create more vehicles. We want to think about other verticals that we may or may not have been in. Michael NierenbergChairman, President & CEO at Rithm Capital00:33:19I pointed out on the energy infrastructure side, a couple of world class folks building a business, have third party capital commitments, trillions needed for that. That's another example of something that will grow, but that will be more on the private fund side. Giuliano BolognaManaging Director at Compass Point Research & Trading LLC00:33:38And this might be a little bit of a different angle, but there's you've obviously done a great job historically of making acquisitions on the mortgage company or MSR side. I'm curious when you talk about M and A, is there are there any opportunities around the mortgage company originating sorry, originating services and or bulk pools that you might be looking at or are you focused on M and A elsewhere on the platform first? Michael NierenbergChairman, President & CEO at Rithm Capital00:34:04No. Listen, we look at everything. If there's something that's accretive for the capital and for shareholders, we'll have a hard run on it. There's not that many mortgage companies, quite frankly, that are in our opinion from where we sit that are I I shouldn't say worth it, but like we don't need anything else. If there's something that's accretive, obviously we love the MSR asset that's been very good to us and our shareholders. Michael NierenbergChairman, President & CEO at Rithm Capital00:34:30We'll continue to look at that. We're starting to see some real demand for MSR funds as well. So you may see some of that start going off balance sheet and then that frees up some capital too. But what I would say, Juliano, we if there's something out there and we have an M and A team, we look at anything and everything. Just need to have the expertise around the house, actually. Giuliano BolognaManaging Director at Compass Point Research & Trading LLC00:34:54That's helpful. And maybe one last one. You talked about the potential for maybe a C Corp conversion. Is that something that you could pursue in the near term or is there any kind of preference to try and do something with the mortgage company partial IPO wise before you do that or could you pursue a C Corp conversion sooner? Michael NierenbergChairman, President & CEO at Rithm Capital00:35:17I think we could do both honestly, but it's got to be something that's highly accretive for both the shareholders and the company. If you think about that as a REIT, we've paid out, I think since 2021, dollars '5 point '8 billion in dividends. If you had that capital and you compounded that capital, it's my belief, I think, the stock would be in the 20s or it should be anyway. So when we look at all that stuff, all this stuff goes into our calculation. But I think anything is on the table, knowing as we all know each other, if we could do something yesterday, I'd prefer to do it yesterday. Giuliano BolognaManaging Director at Compass Point Research & Trading LLC00:35:58That's very helpful. I appreciate it. And I'll jump back in the queue. Michael NierenbergChairman, President & CEO at Rithm Capital00:36:02Thanks. Operator00:36:04The next question comes from Eric Hagen with BTIG. Please go ahead. Eric HagenManaging Director at BTIG00:36:10Hi, thanks. Good morning, guys. When we look to the investment portfolio and we strip out the leverage that's associated with the hedging of the MSRs, what is the leverage in that portfolio? How stable do you feel like it is there? And do you feel like there's even some room to apply more leverage if new res were to get spun out at some point? Michael NierenbergChairman, President & CEO at Rithm Capital00:36:31Most of the balance sheet, what I would say today is really around two asset classes, MSRs and our hedges in the mortgage company. So if you think about it, whether we have swaps on, whether we have treasuries on, whether we have agency mortgages, that's a big chunk of the overall balance sheet. At the Rhythm level, the other large part, what I would say in the non agency space is the Genesis loans, because we finance those with some of our either banks or insurance companies or do securitizations. So the short answer is we could increase leverage. I think we'll only do that if we think it's prudent. Michael NierenbergChairman, President & CEO at Rithm Capital00:37:12But I don't think we need to right now based on the earnings power of where we sit. Eric HagenManaging Director at BTIG00:37:18Okay. That's helpful. I actually want to ask about Shellpoint because subservicing feels like an increasingly relevant driver of the earnings story at NewRez. I mean, I think you mentioned how much you're subservicing now, maybe you can repeat that. And what was the contribution to earnings from Shellpoint? Eric HagenManaging Director at BTIG00:37:34And do you feel like there's any growth opportunities there even if mortgage rates like stay around these levels and new supply is kind of limited? Baron SilversteinPresident at NewRez LLC00:37:44I mean, look, there continues to be demand on different non agency products, right? NonQM is very, very competitive in the marketplace today. We continue to be the number one special servicer for NonQM assets. So, we continue to see growth. There are opportunities with banks in existing relationships that we take market share based upon how they're positioning. Baron SilversteinPresident at NewRez LLC00:38:13So, we do look at it as continued growth and you see that by us adding more loans in the fourth quarter and our pipeline continues to look strong in 2025. So, I think you're going to continue to see us taking market share, especially given a lot of the dislocation you saw last year in, what I'll say, third party servicing. Eric HagenManaging Director at BTIG00:38:38Yes. Thank you guys so much. Appreciate that. Michael NierenbergChairman, President & CEO at Rithm Capital00:38:42Thanks, Eric. Operator00:38:44The next question comes from Jay McCanless with Wedbush. Please go ahead. Giuliano BolognaManaging Director at Compass Point Research & Trading LLC00:38:50Hey, good morning. Thanks for taking Jay McCanlessSVP - Equity Research at Wedbush Securities00:38:52my questions. Two for me. The first one, just kind of a general market question for '25. If you look at the MBA data, mortgage credit availability is still sitting at levels around 2012, '20 '13. Do you guys think just in general, maybe not simply for Rhythm, but just in general, do we think mortgage credit availability is going to increase going into this year or is some of that going to be dependent what happens with the GSE? Baron SilversteinPresident at NewRez LLC00:39:20I mean, look, Michael has talked about this on prior quarters. We have an expectation that rates are going to stay elevated. So, what you're going to continue to see is that consumers obviously are going to have to deal with the affordability issue of trying to buy a new home. And that's why we're very much focused on our existing book, but we continue to also see consumers looking to move. So you see that in the amount of inventory and housing inventory that's available for sale continues to basically what I'll say is tick up. Baron SilversteinPresident at NewRez LLC00:40:05So, our expectation is you'll probably see a larger purchase market. And we think that home equity loans are going to continue to grow and cash outs are going to continue to grow. Whether or not any of the government programs make an adjustment, I don't really think that's going to be necessarily a 25 impact. But at the same time, our belief is the they're very much focused on affordability. And I think that whatever programs that they adjust are going to basically have that as a focal point as well. Baron SilversteinPresident at NewRez LLC00:40:42So, it is going to be a little bit of a balance. So, I think that mortgage credit availability overall is probably going to stay in its current state in 2025. Michael NierenbergChairman, President & CEO at Rithm Capital00:40:50Insurance is a problem obviously. Yes. Right. I mean the cost of homeownership has gone up. You have rates up. Insurance is a problem. Baron SilversteinPresident at NewRez LLC00:40:58You just had the LA fire. So, yes. And that just drives into affordability consideration as well. Jay McCanlessSVP - Equity Research at Wedbush Securities00:41:09Great. Thank you. And then my second question, you guys talked at the beginning of the call about infrastructure finance and doing some investments there. I guess with some of the changes that we're seeing in the new administration, how does that affect your desire and potential customer desire to do more investments in that space? And are there any headlines, insights, roadmap, whatever, however you want to phrase it, anything that we should be watching for to tell us whether or not you guys are going to get more invested in that space? Michael NierenbergChairman, President & CEO at Rithm Capital00:41:45Great question. It's a little bit early. You heard this morning that the administration wants to ban deep sea. I'm going to tell you that I am not the expert in this stuff. I have two partners and we have two partners who are likely going to join us, world class around this. Michael NierenbergChairman, President & CEO at Rithm Capital00:42:04Everybody's talking about the multi trillion dollar investment opportunity and the huge needs for capital. And that's how we're going to think about it. I mean, I think the world this stuff is going to continue to change. But when I look and I recently sat in some meetings with some of the extremely large, so called hyperscalers, it's a really, really interesting space. You got to have the expertise to do it and you got to have a lot of capital because the world is short power. Michael NierenbergChairman, President & CEO at Rithm Capital00:42:35Whether it's AI or something else, the world is short power. And with our team and our partners, I'm extremely excited about where we could go with this. Jay McCanlessSVP - Equity Research at Wedbush Securities00:42:47Okay. That sounds great. Thanks guys. Appreciate it. Operator00:42:52The next question comes from Matthew Erder with Jones Trading. Please go ahead. Matthew ErdnerDirector at Jones Trading00:42:58Hey, good morning guys. Thanks for taking the question. So turning back to NewRez, the funded volume has continued to increase quarter over quarter. You guys have had great growth there. Kind of within the non QM and home equity space, we've seen a lot of competition there and then there's a lot of other players stepping into the place or into the space. How do you continue to drive market share growth there? Matthew ErdnerDirector at Jones Trading00:43:22Is it investment in your team? Are you guys growing that out? Could you just speak to that a little bit? Thanks. Baron SilversteinPresident at NewRez LLC00:43:29It's an investment in the team. It's investment in our technology. It's an investment in our brand. Those are the three key initiatives across the board, right? We continue to believe there's significant upside for us on just focusing on our own homeowners. Baron SilversteinPresident at NewRez LLC00:43:48We haven't even really if we felt like we wanted to get into new customer acquisition. And we do new customer acquisition on our distributed retail platforms, but and but like on our call centers, it's really just focused internally on our own portfolio and making sure that we're maximizing there. So, I would tell you unequivocally, we are making significant platform investments on all of those initiatives. Operator00:44:21This concludes our question and answer session. I would like to turn the conference back over to Michael Nierenberg for any closing remarks. Michael NierenbergChairman, President & CEO at Rithm Capital00:44:32Well, thanks for everybody's questions. Really thoughtful this morning. Obviously, very excited about where we sit as a business and all of our different business lines and look forward to updating you after Q1. More to come. Have a great day and a great rest of the week. Thanks, everyone. Operator00:44:54The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.Read moreParticipantsExecutivesEmma BollaAssociate General CounselMichael NierenbergChairman, President & CEOAnalystsBaron SilversteinPresident at NewRez LLCBose GeorgeManaging Director at Keefe, Bruyette & Woods (KBW)Douglas HarterEquity Research Analyst at UBS GroupKenneth LeeVice President at RBC Capital MarketsGiuliano BolognaManaging Director at Compass Point Research & Trading LLCEric HagenManaging Director at BTIGJay McCanlessSVP - Equity Research at Wedbush SecuritiesMatthew ErdnerDirector at Jones TradingPowered by