Newcastle posts $72 million profit, commits to mortgage investments
Newcastle Investment Corp. ($5.48 0%) 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 ($7.25 0%). 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 ($43.12 0%), 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.
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