Newcastle posts $72 million profit, commits to mortgage investments
Newcastle Investment Corp. (NCT) posted a profit of $72 million, or 68 cents a share, for the first-quarter period.
That is down from a profit of $108 million, or $1.73 a share, a year earlier, the real estate investment trust said Thursday.
The company's core profit includes $30 million of other income related to a $5 million net gain on the settlement of investments, $21 million on the extinguishment of CDO debt, and a $4 million noncash mark-to-market gain tied to interest-rate derivatives in the CDOs.
The real estate investment trust is managed by an affiliate of Fortress Investment Group (FIG). Newcastle invests mostly in real estate securities and loans and excess mortgage servicing rights.
The REIT said in a quarterly update that it's committed to invest $170 million in a deal where it will acquire a 65% interest in excess MSR from Nationstar Mortgage (NSM), which ended up holding more mortgage servicing assets after its acquisition of Aurora Bank.
Newcastle Chairman Wesley Edens said during a conference call that the company is optimistic that it will soon be involved in a major MSR deal with other Fortress subsidiaries, according to Bloomberg. Fortress is the oft-mentioned possible purchaser of assets from Ally Financial mortgage subsidiary Residential Capital.