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Lending

Stonegate Mortgage originations increase 152%

Lender navigates tough year with strategic acquisitions

money flare

Stonegate Mortgage Corporation (SGM) recorded a successful fourth quarter and full year due to several strategic acquisitions that helped boost and round out the company’s profit.

Net income for the fourth quarter 2013 hit $2.1 million, or 8 cents per share, compared to $1.7 million, or 10 cents per share, in the third quarter of 2013 and $3.7 million, or 38 cents per diluted share in 2012.

For the full year, Stonegate reached a net income of $22.6 million, or $1.32 per share, compared to $17.1 million, or $2.26 per share, for the full year 2012.

The company noted that the decrease in EPS during the fourth quarter and full year 2013 was driven primarily by the dilution associated with higher weighted average shares outstanding as a result of its equity offerings during 2013.

"Despite challenging market conditions during the second half of the year, we are pleased with the financial and operational successes we achieved in 2013," said Jim Cutillo, CEO of Stonegate Mortgage.

"We made a number of investments that will position us to be a significant player in the emerging mortgage market, including our Crossline Capital and Nationstar acquisitions, our investments in the NattyMac financing platform and our growing non-agency program.”

In December, Stonegate finalized its purchase of Crossline Capital in a move that effectively expanded its retail channel and grows its geographic area.

"Stonegate is committed to expanding our retail mortgage origination footprint through strategic acquisitions that will enable us to provide services directly to the consumer," Cutillo noted at the time.

And the acquisition expansion does not end there.

Also in December, the lender completed the acquisition of the wholesale lending channel and certain distributed retail assets from Nationstar Mortgage Holdings.

Amid all the acquisitions, Stonegate’s servicing portfolio ended the fourth quarter 2013 at $11.9 billion, an increase of 23% from $9.7 billion in the third quarter 2013, and up 188% over last year’s $4.1 billion.

Mortgage loan origination volume slightly increased 2% to $2.4 billion during the fourth quarter of 2013, up from $2.3 billion in originations in the third quarter of 2013 and 70% higher than $1.4 billion in the fourth quarter of 2012.

In addition, full year 2013 mortgage loan origination volume increased 152%, to $8.7 billion from $3.4 billion in 2012.

“Our Company began 2013 with $55 million of net assets, completed two significant capital raises, and still returned approximately 20% on our capital to investors, representing a significant financial and operational accomplishment,” Cutillo said. “Going forward, we continue to see compelling opportunities to invest capital into attractive assets as well as realize gains on investments made to date."

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