Stonegate Reports Solid Q3 Results
Stonegate Mortgage Corporation reported results for the quarter ended September 30, 2013. "Our third quarter results reflect solid business execution during a period of rising interest rates and underscore the strength of our differentiated, vertically integrated and scalable mortgage banking platform," said Jim Cutillo, chief executive officer of Stonegate Mortgage. "Our three lines of business--mortgage originations, mortgage servicing and mortgage financing--complement each other and create a natural hedge against interest rate volatility and business cyclicality, an important factor in our performance. Having completed our IPO, we continue to execute our growth strategy as evidenced by our recently announced acquisitions which will accelerate our geographic expansion, add talented senior executives and enhance our ability to serve a broader range of mortgage brokers and regional banks. We are confident in our ability to integrate these businesses, which will help fuel our growth and create near and long-term shareholder value for our investors." Net income for the third quarter was $1.7 million, or $0.10 per diluted share, compared to $9.1 million, or $0.63 per diluted share, in the second quarter of 2013 and $9.5 million, or $1.00 per diluted share in the third quarter of 2012. Adjusted net income was $6.1 million, or $0.35 per diluted share, for the third quarter 2013, after adjusting for non-cash valuation adjustments, certain other non-cash expense items and ramp-up and other non-routine expenses. Adjusted net income was $8.4 million, or $0.58 per diluted share, for the second quarter of 2013 and $7.0 million, or $0.74 per diluted share, for the third quarter 2012. Revenues decreased 27 percent to $32.3 million in the third quarter of 2013 from $44.3 million in the second quarter of 2013 and were up three percent from $31.4 million in the third quarter of 2012. Adjusted revenues decreased four percent to $37.8 million in the third quarter of 2013 from $39.5 million in the second quarter of 2013 and were up 50 percent from$25.2 million in the third quarter of 2012. Mortgage loan origination volume increased 12 percent, to $2.3 billion during the third quarter of 2013 from $2.1 billion in originations in the second quarter of 2013 and grew 123 percent from origination volume of $1.1 billion in the third quarter of 2012. The company's servicing portfolio, as measured by unpaid principal balance (UPB), ended the third quarter 2013 at $9.7 billion, an increase of 28 percent from second quarter 2013 ending UPB of $7.6 billion, and up 229 percent over the third quarter 2012 ending UPB of $2.9 billion.