Walter Investment Management Corp. (NYSE: WAC) saw earnings soar to $143 million or $3.75 per diluted share during the quarter ended June 30, up from $0.4 million or $0.01 per diluted share in the same period last year.
Citing earnings growth among both its mortgage servicing and originations business segments as well as its reverse mortgage business, the company’s earnings beat analysts’ estimates and led its share price to increase following the announcement.
“Walter Investment continues to execute solidly against its strategic plan, producing strong operational and financial results across our major segments in the second quarter,” said Mark O’Brien, Walter Investment’s chairman and CEO. “Our core Servicing segment continued to deliver solid growth in profits and exceptional operational performance from both existing and recently acquired portfolios of new business. The Originations segment delivered robust production for the quarter generating significant earnings at strong margins, capitalizing on the HARP origination opportunities embedded in our portfolios.”
Among the company’s highlighted performance measures is its reverse mortgage division, which generated revenue of $9.2 billion for the quarter and continues to grow following its acquisitions of Reverse Mortgage Solutions and Security One Lending in 2012 and 2013, respectively. Most recently, Walter entered into an agreement with Urban Financial Group that will give it a stake in yet another reverse mortgage lender.
During the quarter, Walter generated 22% of its reverse originations through its retail channel and 78% through correspondent and wholesale channels, the company said; HMBS issuance was more than $800 million during the same time period.
Walter continues to see long term potential for its reverse business, the company said in an earnings presentation Thursday, though it anticipates slightly lower margins due to product mix change.
Written by Elizabeth Ecker