Financial Performance - The company reported net income available to common equity of $310 million, resulting in diluted quarterly earnings per share of $2.24[9] - Record quarterly revenue reached $703 million, driven by record net interest income (NII) of $617 million[13] - The company's Return on Average Assets (ROAA) was 1.62%, and the Return on Average Common Equity (ROACE) was 15.4% (16.7% Adjusted ROTCE)[13] Balance Sheet and Loan Portfolio - Total average loans increased by 2% quarter-over-quarter, with strong growth in C&I and residential mortgage sectors[12] - Total average deposits also grew by 2% quarter-over-quarter, supported by strong growth from commercial and consumer customers, and a reduction in average deposit cost[12] - Average loans reached $54.3 billion, with C&I loans at $17.4 billion and residential mortgages at $5 billion[18] - Average deposits totaled $63.7 billion, showing year-over-year growth of 9%[14] Asset Quality - Criticized loans decreased by 14 basis points quarter-over-quarter to 2.15%[9] - Nonaccrual loans decreased by 3 basis points quarter-over-quarter to 25 basis points, with nonperforming assets at 22 basis points[12] - Net charge-offs were $15 million, equivalent to 11 basis points annualized[12] - The company bolstered its Allowance for Loan Losses (ALLL) to 1.38%, reflecting changes in the economic outlook[12] Capital and Ratios - The company's Tangible Common Equity (TCE) ratio stood at 10%, and the Common Equity Tier 1 (CET1) ratio was 14.5%[13] - The company repurchased $2 million shares in 2Q25, with $241 million remaining available under the share repurchase authorization[51] Outlook - The company expects full-year 2025 loan growth in the range of 4% to 6% year-over-year and net interest income trending above 7%[53]

Core Viewpoint - Rithm Capital Corp. is expected to report second-quarter 2025 earnings on July 28, 2025, with an estimated earnings of 51 cents per share and revenues of $1.25 billion, reflecting a year-over-year increase in earnings but a slight revenue growth [1][2][6]. Earnings Estimates - The second-quarter earnings estimate has decreased by one cent over the past 60 days, but it still indicates an 8.5% year-over-year increase [2]. - The Zacks Consensus Estimate for quarterly revenues suggests a 1.6% year-over-year rise [2]. - For the full year 2025, the revenue estimate is $4.56 billion, which represents a 12.9% year-over-year decrease [3]. Recent Performance - Rithm Capital has consistently beaten consensus estimates in the last four quarters, with an average surprise of 21.6% [3]. - The company has an Earnings ESP of -2.60% and a Zacks Rank of 3, indicating uncertainty regarding an earnings beat this quarter [4]. Factors Influencing Q2 Results - The diversified platform strength and strategic partnerships are expected to support second-quarter results, with a projected 4.5% year-over-year growth in interest income [5]. - The profitability of the Newrez business is likely to benefit the Origination & Servicing segment, with a projected 27.7% year-over-year increase in net gain on originated residential mortgage loans [7]. Revenue Projections - The consensus estimate for asset management revenues is $100.19 million, down 8.4% year over year [9]. - The consensus estimate for net servicing revenues is $425.3 million, indicating a 1.3% year-over-year decline [9]. - Other revenues are projected to decline by 35.5% year over year [9].

Financial Data and Key Metrics Changes - Earnings per share (EPS) was $0.87 and net income was $33 million, both exceeding Q4 2024 and Q1 2024, significantly above consensus estimates [7] - Customer deposit growth was over 7% annualized, marking the seventh consecutive quarter of growth [7][10] - Net interest margin (NIM) expanded by four basis points to 3.81% due to decreased funding costs [17] Business Line Data and Key Metrics Changes - Total loan growth was $93 million or 4.89% annualized, consistent with previous guidance [10] - Consumer loan growth was $12 million, driven by residential mortgage and home equity [11] - Commercial loan growth exceeded $81 million, primarily from commercial real estate and construction segments [12] Market Data and Key Metrics Changes - The majority of deposit growth came from consumer activities, with significant contributions from money market accounts [11] - The commercial and industrial (C&I) balances declined by $20 million, reflecting reduced borrowings in specific categories [13] Company Strategy and Development Direction - The company is focused on enhancing its deposit franchise, maintaining top quartile profitability, and ensuring high asset quality [6] - There is an emphasis on organic and inorganic growth opportunities, with plans to cross $10 billion in assets in the second half of the year [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate market uncertainties, supported by strong employee engagement and performance recognition [6] - The outlook for loan growth remains positive, with expectations for mid-single-digit growth in the short term [13] Other Important Information - Non-interest income declined by $700,000 due to seasonal factors, but core non-interest income remained stable year-over-year [18] - The total capital ratio increased by 34 basis points, positioning the company well for future growth opportunities [19] Q&A Session Summary Question: Thoughts on deals in the current environment and timing for crossing $10 billion in assets - Management indicated ongoing conversations in the market and anticipated crossing $10 billion in the second half of the year, with preparations for regulatory requirements [27] Question: Insights on spreads in C&I and commercial real estate - Spreads in C&I remained stable, with hesitancy observed among customers due to economic uncertainty, while some regional banks have become more aggressive in commercial real estate [28][29] Question: Impact of tariffs on borrower base and credit trends - Management is actively monitoring the impact of tariffs and has seen stability in criticized and classified loans, indicating a normalization in credit trends [36][37] Question: Expectations for loan yields and securities cash flows - New loan yields were reported in the $6.75 range, with expectations for continued support to the margin from securities and swaps [43][44] Question: Hiring expectations and pipeline growth - The company is focused on recruiting C&I bankers to support pipeline expansion, with a cautious approach to hiring amid macroeconomic uncertainties [53]

Financial Data and Key Metrics Changes - Earnings per share (EPS) was $0.87 and net income was $33 million, both exceeding Q4 2024 and Q1 2024, significantly above consensus estimates [7] - Customer deposit growth was over 7% annualized, marking the seventh consecutive quarter of growth [7][10] - Net interest margin (NIM) expanded by four basis points to 3.81%, with funding costs decreasing [8][17] Business Line Data and Key Metrics Changes - Total loan growth was $93 million or 4.89% annualized, consistent with previous guidance [10] - Consumer loan growth was $12 million, driven by residential mortgage and home equity [11] - Commercial loan growth exceeded $81 million, primarily from commercial real estate and construction segments [12] Market Data and Key Metrics Changes - The majority of deposit growth came from consumer activities, with significant contributions from money market accounts [11] - The commercial and industrial (C&I) balances declined by $20 million, reflecting reduced automobile floor plan borrowings [13] Company Strategy and Development Direction - The company is focused on enhancing its deposit franchise, maintaining top quartile profitability, and ensuring high asset quality [6] - There is an emphasis on organic growth through hiring additional bankers and improving customer engagement [52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate market uncertainties, supported by strong employee engagement and financial performance [6] - The outlook for loan growth remains positive, with expectations for mid-single-digit growth in the short term and high mid-single-digit growth in the latter half of 2025 [13][40] Other Important Information - The allowance for credit losses declined by approximately $2.5 million, ending the quarter at 1.26% of total loans [14] - Non-interest income declined by $700,000 due to seasonally lower customer activity [18] Q&A Session Summary Question: Thoughts on deals in the current environment and timing for crossing $10 billion without a deal - Management indicated ongoing conversations in the market and anticipated crossing $10 billion in the second half of the year, prepared for regulatory requirements [26] Question: Insights on spreads in C&I and CRE - Spreads in the C&I space remained stable, with hesitancy among customers due to economic uncertainty; CRE spreads faced pressure from larger banks becoming more aggressive [27][28] Question: Impact of tariffs on borrower base and credit trends - Management is actively monitoring credit risk related to tariffs and has seen stabilization in criticized and classified loans [36][39] Question: Expectations for loan yields and securities cash flows - New loan yields were around 6.75%, with expectations for continued support to the margin from securities and swaps [42][45] Question: Hiring expectations for the year - The company is focused on recruiting C&I bankers to support pipeline expansion, with a 15% increase in calling officers already achieved [52]

2025 First Quarter Earnings Conference Call April 22, 2025 Forward Looking Statements & Additional Disclosures Some statements in this presentation may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, statements preceded by, followed by or that include the words "will," "believes," "expects," "anticipates," "intends, ...