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001-35777
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45-3449660
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(Commission
File Number)
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(IRS Employer
Identification No.)
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1345 Avenue of the Americas, 45
th
Floor
New York, New York
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10105
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(Address of principal executive offices)
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(Zip Code)
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¨
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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¨
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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¨
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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(a)
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Financial statements of the businesses acquired
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(1)
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(b)
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Pro forma financial information
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(d)
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Exhibits
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Exhibit
Number
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Description
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99.1
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Unaudited pro forma combined financial information of the Company as of and for the year ended December 31, 2015, and the related notes thereto.
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NEW RESIDENTIAL INVESTMENT CORP.
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(Registrant)
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/s/ Nicola Santoro, Jr.
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Nicola Santoro, Jr.
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Chief Financial Officer
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Exhibit
Number
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Description
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99.1
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Unaudited pro forma combined financial information of the Company as of and for the year ended December 31, 2015, and the related notes thereto.
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Historical New Residential Investment Corp.
As of December 31, 2015
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Historical SpringCastle As of December 31, 2015
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Pro Forma Adjustments As of December 31, 2015
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Pro Forma Combined As of December 31, 2015
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||||||||
Assets
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Investments in:
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||||||||
Excess mortgage servicing rights, at fair value
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$
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1,581,517
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$
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1,581,517
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||||
Excess mortgage servicing rights, equity method investees, at fair value
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217,221
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217,221
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||||||
Servicer advances, at fair value
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7,426,794
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7,426,794
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||||||
Real estate securities, available-for-sale
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2,501,881
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2,501,881
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Residential mortgage loans, held-for-investment
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330,178
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330,178
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Residential mortgage loans, held-for-sale
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776,681
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776,681
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Real estate owned
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50,574
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50,574
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||||||
Consumer loans, held-for-investment
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—
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1,698,130
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386,066
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A
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2,084,196
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Consumer loans, equity method investees
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—
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—
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Cash and cash equivalents
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249,936
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1,066
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(50,231
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)
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A, B
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200,771
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Restricted cash
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94,702
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69,255
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A
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163,957
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Derivative assets
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2,689
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2,689
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Trade receivable
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1,538,481
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1,538,481
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Deferred tax asset, net
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185,311
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185,311
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Other assets
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236,757
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148
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A
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236,905
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|||||
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$
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15,192,722
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$
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1,768,599
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$
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335,835
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$
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17,297,156
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||||||||
Liabilities and Equity
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||||||||
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Liabilities
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Repurchase agreements
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$
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4,043,054
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$
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4,043,054
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Notes and bonds payable
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7,249,568
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1,912,267
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(742
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)
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A, C
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9,161,093
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Trades payable
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725,672
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725,672
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Due to affiliates
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23,785
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529
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(529
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)
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A, C
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23,785
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Dividends payable
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106,017
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106,017
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Accrued expenses and other liabilities
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58,046
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5,111
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6,110
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A, B
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69,267
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12,206,142
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1,917,907
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4,839
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14,128,888
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||||||||
Equity
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Common Stock, $0.01 par value, 2,000,000,000 shares authorized, 230,471,202 issued and outstanding at December 31, 2015
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2,304
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2,304
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Additional paid-in capital
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2,640,893
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2,640,893
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Retained earnings - Gain on Remeasurement
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—
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71,250
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D
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71,250
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Retained earnings
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148,800
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(149,308
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)
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149,308
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E
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148,800
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Accumulated other comprehensive income, net of tax
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3,936
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3,936
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Total New Residential stockholders' equity
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2,795,933
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(149,308
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)
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220,558
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2,867,183
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Noncontrolling interests in equity of consolidated subsidiaries
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190,647
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110,438
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F
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301,085
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Total Equity
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2,986,580
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(149,308
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)
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330,996
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3,168,268
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||||
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$
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15,192,722
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$
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1,768,599
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$
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335,835
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$
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17,297,156
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Historical New Residential Investment Corp. for the Year Ended December 31, 2015
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Historical SpringCastle for the Year Ended December 31, 2015
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Pro Forma Adjustments for the Year Ended December 31, 2015
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Pro Forma Combined for the Year Ended December 31, 2015
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Interest income
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$
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645,072
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$
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455,478
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$
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(91,578
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)
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G
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$
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1,008,972
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Interest expense
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274,013
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87,000
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(1,790
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)
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H
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359,223
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||||
Net Interest Income
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371,059
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368,478
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(89,788
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)
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649,749
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Impairment
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Other-than-temporary impairment (“OTTI”) on securities
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$
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5,788
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$
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—
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$
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—
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$
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5,788
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Valuation and loss provision on loans
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18,596
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67,936
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—
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86,532
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||||
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24,384
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67,936
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—
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92,320
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Net interest income after impairment
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346,675
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300,542
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(89,788
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)
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557,429
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Other Income
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||||||||
Change in fair value of investments in excess mortgage servicing rights
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38,643
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—
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—
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38,643
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Change in fair value of investments in excess mortgage servicing rights, equity method investees
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31,160
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—
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—
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31,160
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Change in fair value of investments in servicer advances
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(57,491
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)
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—
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—
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(57,491
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)
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||||
Earnings from investments in consumer loans, equity method investees
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—
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—
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—
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—
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Gain on consumer loans investment
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43,954
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—
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(43,954
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)
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I
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—
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Gain on settlement of investments, net
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(17,207
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)
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—
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—
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(17,207
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)
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Other income
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2,970
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—
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—
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2,970
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42,029
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—
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(43,954
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)
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(1,925
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)
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Operating Expenses
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General and administrative expenses
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61,862
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—
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7,531
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J
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69,393
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Management fee to affiliate
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33,475
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—
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—
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33,475
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Incentive compensation to affiliate
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16,017
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—
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9,140
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K
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25,157
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Loan servicing expense
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6,469
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52,731
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—
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59,200
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Other expense
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—
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7,531
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(7,531
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)
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J
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—
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||||
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117,823
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60,262
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9,140
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187,225
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Income (Loss) Before Income Taxes
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270,881
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240,280
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(142,882
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)
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|
368,279
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||||
Income tax expense (benefit)
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(11,001
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)
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—
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—
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L
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(11,001
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)
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Net Income (Loss)
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$
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281,882
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$
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240,280
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$
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(142,882
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)
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$
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379,280
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Noncontrolling interests in Income of Consolidated Subsidiaries
|
$
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13,246
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$
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—
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$
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69,979
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M
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$
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83,225
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Net Income (Loss) Attributable to Common Stockholders
|
$
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268,636
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$
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240,280
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$
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(212,861
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)
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$
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296,055
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||||||||
Net Income Per Share of Common Stock
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Basic
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$
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1.34
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$
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1.47
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||||
Diluted
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$
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1.32
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$
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1.46
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||||
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||||||||
Weighted Average Number of Shares of Common Stock Outstanding
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||||||||
Basic
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200,739,809
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200,739,809
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||||||
Diluted
|
202,907,605
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|
202,907,605
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Purchase Price Allocation
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Historical SpringCastle As of December 31, 2015
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|
Fair Value Adjustment
|
||||||
Consumer loans, held-for-investment
|
$
|
2,084.1
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|
|
$
|
1,698.1
|
|
|
$
|
386.0
|
|
Restricted cash
|
69.3
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|
|
69.3
|
|
|
—
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|
|||
Cash and cash equivalents
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1.1
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1.1
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—
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|||
Other assets
|
0.1
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|
0.1
|
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—
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|||
Total assets acquired
|
$
|
2,154.6
|
|
|
$
|
1,768.6
|
|
|
$
|
386.0
|
|
|
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|
||||||
Bonds payable
|
$
|
1,911.5
|
|
|
$
|
1,912.3
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|
|
$
|
(0.8
|
)
|
Accounts payable and accrued expenses
|
5.6
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|
|
5.6
|
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|
—
|
|
|||
Total liabilities assumed
|
$
|
1,917.1
|
|
|
$
|
1,917.9
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|
|
$
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(0.8
|
)
|
|
|
|
|
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|
||||||
Estimated fair value of net assets acquired
|
$
|
237.5
|
|
*
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*
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Represents the aggregate fair value of the Company’s preexisting interest of 30.0%, additional interest acquired on March 31, 2016 of 23.5%, and the noncontrolling interest of 46.5%.
|
•
|
Historical Bonds Payable carrying value of
$1,912.3 million
included $4.7 million of deferred financing costs and original issue discount that were eliminated by the Company’s fair value adjustment to the assumed debt; and,
|
•
|
Due to affiliates of
$0.5 million
has been reclassified to Accounts payable and accrued expenses.
|
•
|
Other expense of
$7.5 million
to General and administrative expenses.
|