Thank you, and good morning, everyone. I would like to thank you for joining us today for Rithm Capital's fourth quarter and full year 2024 earnings call. Joining me today are Michael Nierenberg, Chairman, CEO of Rithm Capital, Nick Santoro, Chief Financial Officer of Rithm Capital, and Baron Silverstein, President of NewRez. Throughout the call, we are going to reference the earnings supplement that posted this morning to the Rithm Capital website, www.rithmcap.com. If you have not already done so, I encourage you to download the presentation now. I would like to point out that certain statements made today will be forward-looking statements. These statements by their nature are uncertain and may differ materially from actual results. I encourage you to review the disclaimers in our press release and earnings supplement regarding forward-looking statements and to review the risk factors contained in our annual and quarterly reports filed with the SEC. In addition, we will be discussing some non-GAAP financial measures during today's call. Reconciliations of these measures to the most directly comparable GAAP measures can be found in our earnings supplement. With that, I will turn the call over to Michael.

Thanks, Emma. Good morning, everyone. I want to welcome you to our fourth quarter and full year call for Rithm. The company had a great fourth quarter and a great year. What I thought I would do today, which is a little bit different than our typical earnings call, I figured I would take a step back and talk about the Rithm story for a minute. When you look at Rithm, you may ask who are we? We began the company in 2013 while at Fortress to acquire MSRs from banks as Basel III capital rules made them too costly. The company, which started with $1 billion of capital, today has grown to $7.8 billion of permanent capital. Along the way, we grew our asset management business, began building and acquiring operating companies. In 2022, the board acquired the management contract of New Residential from Fortress. And then we began the next leg of our journey, which was to continue building a world-class asset management means for our thought was to go out and raise third-party capital. So if you think about it, while at Fortress all the capital and all the growth of the company was done in the public markets, so to not confuse that story, we built it in the public markets. As we looked at the next leg of our lives, we said, let's go raise private capital. So in August of 2022, we changed our name to Rithm Capital. While we still operate as a REIT, we continue to evaluate the benefits of changing our capital structure. There are still some things to do in order for us to get there. Today, when I look at the firm and we look at the firm, we have what I believe is a complete product offering for…

And good morning to everybody. So I am turning to slide twenty. And NewRez delivered another strong quarter. With fourth quarter pretax income excluding mark to market of approximately $280 million, which is an increase of 12% quarter over quarter and delivering a 20% ROE. We also finished the full year of 2024 with approximately $1 billion in pretax income. And that is up 26% year over year with a 19% ROE. These results though reflect the change in segment reporting, by including MSRs that were previously reported as serviced by others and the MSR hedge, that were reported in the investment portfolio segment. And we believe this change more accurately reflects the economics of Rithm's origination and servicing segment, which is NewRez overall and more closely resembles industry norms across our sector. And overall, we continue to gain momentum these results show the power of our platform. We have $844 billion in total servicing, now the number three servicer, and $59 billion in funded volume for 2024. With the number five originator. Turning to slide twenty-one, you can also see that we remain in growth mode. The last few years really present the effectiveness of our well-balanced platform. By taking advantage of origination opportunities and servicing opportunities regardless of market conditions. Our 2025 strategy is no different. We do not chase market share nor that we have a hope that rates will come down. Remain focused on growing our brand presence and delivering best-in-class customer experience in order to maximize customer retention and recapture. Growing our B2B platforms is also focused on building new partnerships, increasing wallet share, with our existing customer base and also being opportunistic on MSR and platform acquisitions. These initiatives coupled with our operational excellence and improved efficiency through our AI initiatives and our technology…

Thanks. Operator, if we could just turn in, open up the lines for Q&A, that would be great.

If at any time your question has been addressed, the first question comes from Bose George. Please go ahead.

Could you give us any updated thoughts on the potential listing of NewRez in 2025? And then could you also just tie that into your comments, Michael, in your prepared remarks about potential changes in the capital structure at Rithm?

Sure. So I, you know, we are not there yet on listing the company. We are, you know, if you had talked to Nick and the team, we have taken steps to have separate segment reporting where everything is now listed at the mortgage company. So you have a clear view into how that company is doing. I think the big part for us is how do we think about shareholders and not just at the mortgage company level quite frankly, and get the proper multiple for how we know, how we see ourselves in the business. That is one of the reasons why I opened up a little different than I typically do. There are some pieces that need to come into play. One is we need to, if we were going to do that, we want to grow our REIT, you would have a dedicated REIT, you would have a C corp up top, no different than some of the, you know, the best in class asset managers and then we would have our operating companies below. So that is really the path we are on. I will say the M&A pipeline of stuff that we are looking at is extremely robust. Whether that be on the asset management side, and just some of the other things that, you know, manufacturing businesses as I refer to them in our opening remarks. But to tell you today that we are going to list the company, I cannot do that. But we are working on our capital structure, and we hope to have some change in that. You know, we put a lot of thought and talked to, you know, have some good thoughtful board discussions. I am hopeful at some point down the road that we will get there, but we need to grow some scale in the REIT right now.

Okay. That is helpful. Thanks. And this in terms of timeline that suggests that it is probably not a 2025 event, will you sort of build out the other pieces. Is that fair?

No. I mean, I would like to do it in 2024, but that is gone. So I think if we can get it done in 2025, we absolutely will. Because I still believe that our common is fundamentally undervalued.

Okay. Great. And actually, just another quick one. The SPAC, I know you cannot discuss it, but is that would that be part of Sculpture to the extent, you know, that that happens? If it does happen, it will be a Rithm company.

I cannot go into a lot of details, but the way we think about the business if we could create more fee-earning businesses, that flow up to the parent company we are going to do that. And as we think about diversification, there are certain types of vehicles that we could potentially explore.

Okay. Great. Makes sense. Thanks.

Thanks.

The next question comes from Douglas Harter with UBS. Please go ahead.

Thanks. Michael, you talked about, you know, scaling up the REIT in your last answer. You know, just what assets do you find attractive and kind of how would you look to scale up the REIT?

Doug, I think it is more of the same in what we do. If you look at the business, we have allocated a lot of capital. We, you know, we allocate more and more capital to, you know, the mortgage company has a lot of capital. We, you know, obviously, the MSR business has been extremely beneficial to the company and to shareholders. We continue to believe in that asset. As Baron pointed out, I think we have a little under $850 billion and continue to grow the third-party servicing there. When you look at, you know, you have a just give or take, you know, for purposes of this discussion, 4.40 or 4.5 ten-year note, you have mortgages trading 1.20, 1.30 in the agency market. You look at some of the non-QM, assets that we actually produce or you look at the Genesis side that were where we can produce. I think that is where you are going to see growth on the REIT side.

Just along those lines, do you how do you see kind of the investor property loans today, you know, other private label securitizations and you know, kind of what impact, you know, did it Washington discussions around the GSEs have on those opportunities?

When and if that happens, I think that we are going to be so well positioned between our capital base, the OPs that we have in our system, and our mortgage company, which I think is in a class, you know, a world-class mortgage company. So whether they be investor loans, whether, you know, if the agencies went back to the old way where they get privatized, keep in mind, you know, in the old days, G fees were what, 25 basis points or something, give or take that. Right there? You look at where they are, they are 50 basis points today. So there is probably some given. Part of that could be as you think about the reinsurance market, around, you know, how that could possibly work, and I think that could work. But I think we will be extremely well positioned for that and I would like to see it, quite frankly.

And, Michael, just one more if I could. Just on your comments about growing and scaling the REIT, can you do that with your existing capital base, or would you need to raise additional capital to do that?

It depends. It could be a combination of both. You know, keep in mind most REITs tend to operate by themselves. There is not a lot of M&A activity in the REIT space. You know, when I look at our business and think about permanent capital and having a little under $8 billion, that is a good place to be. Away from our so-called asset management arm. So if we could grow that, and then at some point create management fees, I think we are, you know, we are off to the races.

Great. Thank you. Hang stuff.

The next question comes from Kenneth Lee with RBC Capital Markets.

Hey, thanks for taking my question. Good morning. Just one on Sculptor. You talked about some initiatives to grow the credit business. Wonder if I can get a little bit more detail in terms of, you know, what particular initiatives and what are your expectations in terms of fundraising for this year. Thanks. So on the initiatives, it is more of the same. It is lead with performance. Performance is going to bring in more AUM. You know, the team, you know, there is a large capital formation team. Everybody is out on the road and, you know, seeing LPs. When I think about the initiatives to actually grow whether it be credit and some of the other businesses, you know, there are two ways really to do it. Right? You could do some in M&A, but we cannot be the folks that are going to pay 20 or 30 x, you know, on a multiple basis. So it could be some, you know, there are a couple of different platforms out there that we are actually looking at. But I think real performance is going to bring in a lot more capital. If you, you know, if you think about it, you know, the company is a great company, obviously, in the press for a bit, but you know, out on the other side, a year-end change removed. Performance, great everywhere. So, you know, I am excited. We talk, we all talk to a lot of LPs, and I think you are going to, we are going to see a fair amount of capital come in. As you think about how much capital to be raised this year, you know what? We right now, the real estate guys are, I cannot give you specific numbers, but those guys are, you know, those guys are doing well. The credit side is doing well. So we expect a pretty good year. We are not Blackstone or Apollo, unfortunately, but, you know, there is a lot of room for us out there.

Gotcha. Very helpful there. And one follow-up, if I may, just to circle there as well. Any updated outlook around expense base for Sculptor? Is this sort of like still in investment phase there? Just, you know, any kind of color around where expense could trend there? Thanks.

You know, I think it is more BAU, honestly. You know, we can always evaluate expenses, whether it be at Sculptor, whether it be at the mortgage company, whether we be at Rithm. You know, creating synergies obviously across all of our operating platforms will help, and we continue to work on those. So we could have some saves at some point. I think, yeah. I mean, it is just part of our discipline about risk management. Putting up higher earnings for shareholders.

Gotcha. Thank you very much.

Thank you, Ken.

The next question comes from Giuliano Bologna with Compass Point. Please go ahead.

Good morning, Jeff. Congrats on that. General performance. One thing I would be curious about when you think about the kind of growing the REITs. Would there be any, you know, value or, like, ability to push assets into the Rithm Property Trust structure and use that as a public vehicle, or would you want to create, you know, more separate vehicles over time that have slightly different strategies? On the kind of, you know, REIT side of the world.

I think it is both. We prefer not to transfer assets from one REIT to another just to be clear on that. We are looking at a transaction for net, you know, for example, in the commercial real estate sector. Where both Rithm and Rithm Property Trust will likely participate as two separate entities. Because, obviously, the amount of capital in Rithm Property Trust is not large enough than, you know, when we think about risk and the sheer size of doing any one thing, we want to make sure that we are balanced from a risk perspective. It is going to be more where we would like to continue to create more vehicles, want to think about other verticals that we may or may not have been in. You know, I pointed out on the energy, infrastructure side. Couple world-class folks, you know, building a business have third-party capital commitments, trillions needed for that. That is another example of something that will grow. But that will be more on the private fund side.

And this might be, you know, take a little bit of a different angle, but there is, and obviously done a great job sort of making acquisitions on the mortgage company or MSR side. I am curious when you talk about M&A, are there any opportunities around the mortgage company that, you know, originating servicers and or, you know, bulk pools that you do that you might be looking at. Or you focus on them and, you know, elsewhere on the platform first?

No. I, you know, listen, we look at everything. If there is something that is accretive, for the capital and for shareholders, we will have a hard run on it. There are not that many mortgage companies quite frankly that are in our opinion from where we sit that are, I should not say worth it, but, like, we do not need anything else. If there is something that is accretive, you know, obviously, we love the MSR asset. That has been very good to us and our shareholders. We will continue to look at that. You know, we are starting to see some real demand for MSR funds as well. So you may see some of that start going off balance sheet. And then that frees up some capital too. Right. You know, what I would say, Giuliano, we if there is something out there and we have an M&A team, we look at anything and everything. Just need to have the expertise around the house to execute.

That is helpful. And maybe one last one. Yeah. You talked about via Continental for me is C corp conversion. Is that something that you know, you could pursue, you know, in the near term, or is there any kind of, you know, preference to try and something with a mortgage company, partial IPO wise, before you pursue that, or could you pursue a C corp originating sooner?

I think we could do both honestly. It has got to be something that is highly accretive for both shareholders in the company. You know, if you think about that as a REIT, we paid out, I think, since 2021, $5.8 billion in dividends. You know, if you had that capital and you compounded that capital, it is my belief, I think, the stock would be, you know, in the twenties. Or it should be anyway. So we look at all that stuff, all the stuff goes into our calculation, but I think anything is on the table. You know, knowing as we all know each other, if we could do something yesterday, I would prefer to do it yesterday.

That is very helpful. I appreciate it. I will jump back in the queue.

Thanks.

The next question comes from Eric Hagen with BTIG. Please go ahead.

Hi, thanks. Good morning, guys. When we look to the investment portfolio and we strip out the leverage that is associated with the hedging of the MSRs, what is the leverage in that portfolio? How stable do you feel like it is there? And do you feel like there is even some room to apply more leverage if, you know, NewRez were to get spun out at some point?

Most of the balance sheet, what I would say today, is really around two asset classes. MSRs and our hedges in the mortgage company. So if you think about it, whether we have swaps on, whether we have treasuries on, whether we have agency mortgages, that is a big chunk of the overall balance sheet. At the Rithm level, the, you know, the other large part, what I would say in the non-agency space is the Genesis loans. You know, because we finance those with some of our banks or insurance companies who do securitizations. So the short answer is we could increase leverage, I think we will only do that if we think it is prudent. I do not think we need to right now based on the earnings power of where we sit.

Mhmm. Okay. That is helpful. I actually want to ask about Shellpoint because it feels like an increasingly relevant driver of, you know, the earning story at NewRez. I mean, think you mentioned how much you are subservicing them. Maybe you can repeat that. And what was the contribution to earnings from Shellpoint? And do you feel like there are any growth opportunities there even if mortgage rates, like, stay around these levels and new supply is kind of limited?

I mean, look, there continues to be demand on different non-agency products. Right, non-QM, you know, is very, very competitive in the marketplace today for non-QM assets. We continue to be the number one special servicer. So, you know, we continue to see growth. There are opportunities with banks and existing relationships that we take market share based on how they are positioning. So we do look at it as continued growth and, you know, you see that by us adding more loans in the fourth quarter and our pipeline continues to look strong in 2025. So I think you are going to continue to see us, you know, taking market share, you know, especially given a lot of the dislocation you saw last year. In, what I will say, third-party servicing.

Yep. Thank you guys so much. Appreciate it, Nava.

Thanks, Eric.

The next question comes from Jay McCanless with Wedbush. Please go ahead.

Hey, good morning. Thanks for taking my questions. Two for me. The first one, just kind of a general market question for 2025. If you look at the MBA data, mortgage credit availability still sitting at levels around 2012, 2013. Do you guys think just in general, maybe not simply for Rithm, but just in general, do we think mortgage credit availability is going to increase going into this year, or is some of that going to be dependent on what happens with the GSE?

I mean, look, Michael, you know, has talked about this on prior quarters. We have an expectation that, you know, rates are going to stay elevated. So what you are going to continue to see is that consumers obviously are going to, you know, have to deal with the affordability issue of trying to buy a new home. And that is why, you know, we are very much focused on our existing book, you know, but we continue to also see consumers looking to move. So you see that in the amount of inventory and housing inventory that is available for sale continues to basically, what I will say, is pick up. So our expectation is you will probably see a larger purchase market, you know, and we think that home equity loans are going to continue to grow. And, you know, we and cash outs are going to continue to grow. You know, whether or not any of the government, you know, programs, you know, make an adjustment, I do not really think that is going to be, you know, necessarily a 2025 impact, but, you know, at the same time, you know, our belief is, you know, they are very much focused on affordability and I think that, you know, whatever programs that they adjust are going to basically have, you know, that as a focal point as well. So, you know, it is going to be a little bit of a balance. So I think that mortgage credit availability overall is probably going to stay, you know, in its current state.

Sure. Twenty-five. Insurance is a problem, obviously. Yeah. Right? I mean, the cost of home ownership has gone up. The rates up. Insurance is a problem. You just had the LA fire, so.

And that just drives into affordability consideration as well.

Okay. Great. Thank you. And then my second question, you guys talked at the beginning of the call about infrastructure. I guess, with some of the changes that we are seeing in the new administration, how does that affect your desire and potential customer desire to do more investments in that space? And are there any headlines, insights, road map, whatever, however you want to phrase it, anything that we should be watching for to tell us whether or not you guys are going to get more invested in that space?

Great question. It is a little bit early. You know, you heard this morning that the administration wants to ban Deep Sea. I am going to tell you that I am not the expert in this stuff. I have two partners, and we have two partners. Who are likely going to join us. World-class, you know, around this. Everybody is talking about the multi-trillion dollar investment opportunity and the huge needs for capital. And that is how we are going to think about it. I mean, think the world this stuff is going to continue to change. But when I look and, you know, I recently sat in some meetings with some of the extremely large so-called hyperscalers. It is a really, really interesting space. You have got to have the expertise to do it, and you have got to have a lot of capital. Because this to the world is short power. Whether it is AI or something else, the world is short power. And, you know, with our team, and our partners, I am extremely excited about where we could go with this.

Okay. That sounds great. Thanks, guys. Appreciate it.

The next question comes from Matthew Ertner with Jones Trading. Please go ahead.

Hey, good morning guys. Thanks for taking the question. So turning back to NewRez, the funded volume has continued to increase quarter over quarter. You guys have had great growth there. We have seen a lot of competition there and then, you know, kind of within the non-QM and home equity space, you know, there are a lot of other players stepping into the place. Or into the space, you know, how do you continue to drive market share growth there? You know, is it investment in your team? Are you guys growing that out? Can you just speak to that a little bit? Thanks.

It is an investment in the team. It is an investment in our technology. It is an investment in our brand. You know, those are the three key initiatives across the board. Right? We continue to believe there is significant upside, you know, for us on just focusing on our own homeowners. Haven't even really if we felt like, you know, we wanted to get into new customer acquisition, you know, we and we do new customer acquisition on our distributed retail platforms, but, like, on our, you know, on our call centers, it is really just focused internally on our own portfolio and making sure that we are maximizing their. So I would tell you unequivocally are making significant platform investments on all of those initiatives.

Got it. That is helpful. Thank you.

This concludes our question and answer session. I would like to turn the conference back over to Michael Nierenberg for any closing remarks.

Well, thanks for everybody's questions. Really thoughtful this morning. Obviously very excited about where we sit as a business and all of our different business lines and look forward to updating you after Q1. More to come. Have a great day and a great rest of the week.

Thanks, everyone.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.