Nationstar’s quarterly income rose to over $123 million, somewhat surprising numbers, when compared to the $62.6 million total in the first quarter of 2013 and $36.3 million in the second quarter 2012.
“We generated strong sequential earnings across our entire platform in the second quarter,” said Nationstar CEO Jay Bray. “We successfully boarded the BofA GSE and Ginnie Mae portfolios, completed the acquisition of Greenlight, and continue to make progress on building Solutionstar into a high-margin, fee-based business. Our platforms are strategically positioned to perform in an improving economy, and we continue to see compelling opportunities in the marketplace that will deliver long-term value to our shareholders.”
The company posted a 40 percent increase in overall business, generating over $600 million in revenue, compared to the previous quarter’s $431.1 million. Nationstar acquired servicing rights from BofA, which led to a strong second quarter showing. The servicing rights, referred to as the Greenlight Acquisition, was completed back in early June and reportedly cost the company around $74 million.
“We executed on our strategic plan and delivered another quarter of strong financial results,” said Nationstar’s CFO David Hisey. “Our servicing segment continues to make progress on our previously identified profitability initiatives which will generate increased earnings and higher margins. Our origination segment experienced a strong quarter of profitability due to record volume and our strategic focus on high margin channels. Solutionstar continues to experience revenue growth and is focused on scaling and diversifying its client and revenue base. We remain on track to hit our full year 2013 and 2014 earnings guidance.”
In terms of servicing, Nationstar’s 60-day delinquency rate dropped from 13.8 percent to 11.8 percent, first quarter to second quarter. This indicates that Nationstar is paying closer attention to its portfolio performance, while also helping to preserve homeownership. Origination revenue also saw a spike in terms of percentage, rising an additional 45 percent. Quarterly origination volume from portfolio recapture, wholesale, and builder channels increased over 80 percent to $5.6 billion. Nationstar originated 38 percent of the Home Affordable Refinance Program (HARP), which is around $2.7 billion overall.
All in all, an incredibly positive second quarter for Nationstar, with increases all around from their first quarter numbers. Due in large part to the Greenlight Acquisition, Nationstar has set itself in prime position to continue strong servicing and origination numbers for the remainder of 2013.