Stonegate Mortgage Records Annual Loss
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowIndianapolis-based Stonegate Mortgage Corp. (NYSE: SGM) is reporting a full-year net loss of $30.7 million, compared to net income of $22.6 million in 2013. The company also announced the sale of $3 billion in mortgage service rights to a third party. February 26, 2015
News Release
INDIANAPOLIS, Ind. – Stonegate Mortgage Corporation (“Stonegate Mortgage” or the “Company”) (NYSE:SGM), a specialty finance company that operates as an intermediary focused on providing investment yield opportunities in the residential mortgage market to investors through originating, financing, and servicing U.S. residential mortgage loans, today reported results for the quarter and year ended December 31, 2014.
Jim Cutillo, Chief Executive Officer of Stonegate Mortgage commented, “The decline in interest rates toward the end of the fourth quarter resulted in significant increases in principal payoffs and a negative fair market value adjustment to our mortgage servicing portfolio. Based on industry estimates, our originations segment was able to continue its growth in market share during the quarter by approximately 10 basis points. Our outlook for 2015 continues to be positive as we expect to continue to grow our market share gains and execute on our strategic initiatives, while maintaining a strong balance sheet and liquidity. While the housing market has not recovered at the pace that most economists expected, Stonegate has made investments that we believe will allow us to take advantage of the current conditions and future conditions in the housing finance market.”
Mortgage loan origination volume decreased 5% to $3.369 billion during the fourth quarter of 2014 from $3.537 billion in originations in the third quarter of 2014 and grew 41% from origination volume of $2.382 billion in the fourth quarter of 2013. Full year 2014 mortgage loan origination volume increased 45%, to $12.635 billion from $8.707 billion in 2013.
The Company's servicing portfolio, as measured by unpaid principal balance (“UPB”), ended the fourth quarter of 2014 at $18.3 billion, an increase of 3% from the third quarter of 2014 UPB of $17.7 billion, and up 54% over the fourth quarter of 2013 UPB of $11.9 billion.
Mortgage loan funded volume through the Company's warehouse lines of credit provided to its correspondent and other customers in the Company's Financing segment increased 44% to $472.4 million in the fourth quarter of 2014 from $328.2 million in the third quarter of 2014 and increased 888% from $47.8 million in the fourth quarter of 2013.
Revenues decreased 58% to $26.5 million in the fourth quarter of 2014 from $63.1 million in the third quarter of 2014 and decreased 39% from $43.8 million in the fourth quarter of 2013. Lower interest rates and a flattening in the yield curve resulted in lower GAAP revenue primarily in interest income, payoffs and principal amortization of MSRs and fair market value adjustments. Full year 2014 revenue increased 18% to $185.6 million from $157.9 million in 2013.
Net loss for the fourth quarter of 2014 was $21.4 million, or $0.83 per diluted share, compared to net loss of $1.7 million, or $0.07 per diluted share, in the third quarter of 2014 and net income of $2.1 million, or $0.08 per diluted share in the fourth quarter of 2013. Net loss for the full year 2014 was $30.7 million, or $1.19 per diluted share, compared to net income of $22.6 million, or $1.32 per diluted share for the full year 2013.
January/February 2015 Key Operating Highlights
Total origination volume was $875.8 million during the month of January 2015, down 22% compared with average origination volume of $1,122.9 million per month during the fourth quarter of 2014.
Average mortgage loans locked per business day in January 2015 increased 17% to $79.4 million, compared with average locks per business day of $68.0 million during the fourth quarter of 2014.
Retail locks per day grew 53% in January 2015 to $19.6 million to represent 25% of total lock volume, compared to 19% of total lock volume during the fourth quarter of 2014.
Wholesale locks per day increased in January 2015 to $23.7 million, up 45% compared to $16.4 million during the fourth quarter of 2014. Wholesale locks represented 30% of total lock volume in January, compared to 24% of total lock volume during the fourth quarter of 2014.
On February 20, 2015, the Company entered into a letter of intent to sell approximately $3.0 billion in FNMA and FHLMC MSRs to an unrelated third party. The anticipated closing date of the transaction is March 31, 2015.
About Stonegate Mortgage Corporation
Founded in 2005, Stonegate Mortgage Corporation (NYSE: SGM) is a leading, publicly traded, non-bank mortgage company that originates, finances and services agency and non-agency residential mortgages through its network of retail offices and approved third party originators. Stonegate Mortgage also provides financing through its fully integrated warehouse lending platform, NattyMac. Stonegate Mortgage’s operational excellence, financial strength, dedication to customer service and commitment to technology have positioned the firm as a leading provider in the emerging housing finance market.
Source: Stonegate Mortgage Corp.