Rithm Capital reports third-quarter net income of $217.1 million, up from $20.2 million

Rithm Capital Corp. (RITM) reported third-quarter 2026 GAAP net income of $217.1 million, or $0.38 per diluted common share, up from $20.2 million, or $0.04 per share, in the second quarter.

The company said in a press release furnished with an 8-K filing on Friday. The release covers the quarter ended Sept. 30, 2026.

Here's how the company did:

• GAAP net income per diluted share: $0.38 vs. $0.04 in the second quarter
• Earnings available for distribution per diluted share: $0.55 vs. $0.60 in the second quarter
• Total revenue: $1.76 billion vs. $1.28 billion in the second quarter
• GAAP net income: $217.1 million vs. $20.2 million in the second quarter

Earnings available for distribution, a non-GAAP measure, is the company's operating earnings measure. It excludes items such as certain realized and unrealized gains and losses, changes in valuation inputs for mortgage servicing rights (MSRs), and deferred taxes.

The company's reconciliation adds back $254.7 million of deferred taxes. It also removes $269.8 million of net realized and unrealized gains, including MSR valuation changes.

Income before income taxes was $519.1 million, compared with $86.9 million in the second quarter. Income tax expense was $257.8 million, up from $19.0 million.

Total revenue reached $1.76 billion, compared with $1.28 billion in the second quarter. Servicing revenue, net was $716.6 million, up from $221.8 million.

The change in fair value of MSRs and MSR financing receivables, net of economic hedges, was a gain of $121.3 million. The second quarter recorded a loss of $392.9 million on the same line.

Compensation and benefits fell to $382.4 million from $410.5 million. General, administrative and operating expenses rose to $320.9 million from $307.3 million.

Interest expense and warehouse line fees rose to $480.8 million from $464.1 million in the second quarter.

The common dividend was $0.25 per share, the same as in the second quarter, totaling $139.6 million. Book value per common share was $12.51, based on 558,407,031 common shares outstanding at Sept. 30.

Asset management revenue fell to $107.3 million from $142.2 million in the second quarter. Incentive fees dropped to $14.4 million from $51.7 million, while management fees rose to $93.0 million from $90.5 million.

The asset management segment posted a pre-tax loss of $68.8 million, compared with pre-tax income of $14.0 million in the second quarter.

Rithm Asset Management had approximately $61 billion of assets under management as of Sept. 30, consistent with the end of the second quarter. Gross new capital and fund commitment inflows were $569 million in the third quarter, bringing the year-to-date total to $2.9 billion.

The company revised its assets under management calculation effective July 1, 2026, to include assets subject to real estate asset management services and exclude certain other assets. Prior periods were conformed, with no impact on reported assets under management.

The Origination and Servicing segment reported pre-tax income of $604.8 million, up from $113.1 million in the second quarter.

Newrez LLC, the mortgage origination and servicing platform, posted pre-tax operating income of $329.7 million. That figure excludes mortgage servicing rights mark-to-market gains of $275.2 million, net of hedges, and other non-operating items.

The second-quarter comparison of $307.6 million excluded mark-to-market losses and other non-operating items of $194.5 million.

Newrez generated a 24% annualized operating return on equity in the third quarter, on $5.5 billion of average ending segment equity. Origination funded production volume was $12.9 billion, down 19% from the second quarter and down 21% from a year earlier. Total servicing unpaid principal balance reached $878.9 billion, including $282.8 billion of third-party servicing.

Genesis Capital LLC, the residential transitional lending platform, recorded $1.5 billion of residential transition loan originations in the third quarter, up 25% from a year earlier. The number of new sponsors funded rose 74% from a year earlier, to 125.

The company completed its inaugural $375 million securitization backed entirely by multifamily residential transition loans. The residential transitional lending segment posted pre-tax income of $24.3 million, down from $37.0 million in the second quarter.

Elecor Properties, the owner and operator of Class A office properties in New York City and San Francisco, increased year-to-date leasing to 1.0 million square feet. Rents across the portfolio were 22% higher than in fiscal 2025.

The company closed a joint venture for ownership of 1301 Avenue of the Americas. It will continue to hold an interest in the asset and operate the building on the venture's behalf. It also closed a $515 million refinancing of 31 West 52nd Street, using a commercial mortgage-backed securitization and two tranches of mezzanine financing.

In the investment portfolio, the company purchased $1.6 billion in unpaid principal balance of non-qualified mortgage loans in the third quarter, sourced from Newrez and third-party originators. It sponsored and completed two non-qualified mortgage securitizations totaling $975 million in unpaid principal balance.

The company acquired $521 million of home improvement loans under its existing forward flow agreement with Upgrade, Inc., bringing purchases through quarter-end to $1.5 billion. It amended that agreement to allow for the purchase of an additional $1.2 billion in unpaid principal balance. It also completed a $306 million securitization of home improvement loans. The investment portfolio segment posted pre-tax income of $24.1 million, down from $31.5 million in the second quarter.

CEO Michael Nierenberg said: “Rithm’s strong third quarter results reflect disciplined execution across every part of our platform.” He added that the company continued to scale its asset management business and was entering the fourth quarter “with significant momentum and opportunity ahead for our shareholders, clients, and partners.”

The company scheduled a conference call for Friday morning to review the results. The release did not include a forecast for the fourth quarter or the full year.