Walter Investment Management Corp. (WAC) reported GAAP net income for the first quarter of 2013 of $27.7 million, or $0.73 per share, up from $5.1 million, or $0.17 per share, in the first quarter of 2012. The latest-quarter results reflected strong earnings growth in the servicing segment from recent portfolio additions, and included significant increases in incentive, performance and ancillary fees. The latest-quarter results also included solid earnings contributions from the Reverse Mortgage and Originations segments.
Core earnings for the first quarter jumped to $56.5 million or $1.50 per share, from last year's $20.6 million or $0.71 per share in the prior year quarter.
Total expense increased to $280.8 million in the first quarter of 2013 from $149.3 million in the first quarter of 2012. The year-over-year increase reflected additional operating and overhead costs, including salaries and benefits and general and administrative expenses, associated with growth in the serviced portfolio.
The additions of the Reverse Mortgage and Originations segments added approximately $32.5 million and $39.4 million to expenses, respectively. Expenses also reflected $11.2 million in higher legal, due diligence and other costs associated with increased corporate and business development activities, as well as a $3.7 million increase in the accrual for anticipated earn-outs to be paid in association with recent acquisitions.
Total revenue for the first quarter was $291.8 million, as compared to $152.8 million in the year-ago period. The year-over-year increase in revenue reflects a $61.3 million increase in net servicing revenue and fees and an increase of $78.4 million of net gain on sales of loans.
Analysts polled by Thomson Reuters expected the company to report earnings of $0.47 per share on revenues of $262.77 million for the quarter. Analysts' estimates typically exclude special items.
The company reaffirmed its previously provided AEBITDA range for 2013 of $650 - 725 million. Using the mid-point of the AEBITDA range, the company's previously provided estimates for depreciation and amortization, and the company's current capital structure, this translates into estimated after tax core earnings per share of approximately $5.06 for 2013. Analysts expect the company to report earnings of $4.65 per share for fiscal 2013.
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