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Section 1: 8-K (NATIONSTAR MORTGAGE HOLDINGS INC. 8-K)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):
June 9, 2016

NATIONSTAR MORTGAGE HOLDINGS INC.
(Exact name of registrant as specified in its charter)
     
Delaware
001-35449
45-2156869
(State of Incorporation)
(Commission File Number)
(I.R.S. Employer
Identification Number)
     
8950 Cypress Waters Boulevard
Coppell, TX 75019
(Address of principal executive offices)

(469) 549-2000
(Registrant's telephone number, including area code)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[     ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[     ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[     ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[     ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
__________________
 


Item 7.01 Regulation FD Disclosure.
Nationstar Mortgage Holdings Inc. ("Nationstar") has announced that Jay Bray, Nationstar's President & Chief Executive Officer, and Robert Stiles, Nationstar's Chief Financial Officer, will be engaging in certain investor meetings on Thursday, June 9, 2016. Nationstar intends to use the presentation filed as Exhibit 99.1 to this Form 8-K during such meetings.
The information furnished pursuant to this Item 7.01 shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor will such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number
 
Description
   
99.1
 
Citigroup Investor Conference, June 2016




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
             
       
Nationstar Mortgage Holdings Inc.
             
Date: June 9, 2016
     
By:
 
/s/ Robert D. Stiles
           
Robert D. Stiles
           
Chief Financial Officer


 

EXHIBIT INDEX


Exhibit
Number
 
Description
   
99.1
 
Citigroup Investor Conference, June 2016

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Section 2: EX-99.1 (EXHIBIT 99.1)

 
 
 CITIGROUP INVESTOR CONFERENCE  June 2016 
 

 
 This presentation contains summarized information concerning Nationstar Mortgage Holdings Inc. (the “Company”) and the Company’s business, operations, financial performance and trends. No representation is made that the information in this presentation is complete. For additional financial, statistical and business related information, as well as information regarding business and segment trends, see the Company’s most recent Annual Report on Form 10-K (“Form 10-K”) and Quarterly Reports on Form 10-Q (“Form 10-Qs) filed with the U.S. Securities and Exchange Commission (the “SEC”), as well as the Company’s other reports filed with the SEC from time to time. Such reports are or will be available in the Shareholder Relations section of the Company’s website (www.nationstarmtg.com) and the SEC’s website (www.sec.gov).Forward Looking StatementsAny statements in this presentation that are not historical or current facts are forward looking statements. These forward looking statements include, but are not limited to, statements regarding: Servicing profitability and portfolio composition, Originations opportunities and Xome’s estimated Adjusted Pretax Income. Forward looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward looking statements. Certain of these risks and uncertainties are described in the “Business” and “Risk Factors” sections of our Form 10-K and other required documents as filed with the SEC, which are available at the SEC’s website (www.sec.gov). Nationstar undertakes no obligation to publicly update or revise any forward looking statements or any other information contained herein, and the statements made in this presentation are current as of the date of this presentation only.Non-GAAP measures This presentation contains certain references to non-GAAP measures. Please refer to the Appendix and Endnotes for more information on non-GAAP measures.   Important Information  INVESTOR SUPPLEMENT  
 

 
 Servicing: 4th largest servicer, largest non-bank servicer(1)Originations: Integrated platform focused on customer retentionXome: Residential real estate services, principally auction, title and technology  Nationstar Today  Operations  Best Positioned  Strong Capital Position  Preferred industry partner, evidenced by strong pipelineTop rated servicer, including FNMA 5 STAR ratingDiversified servicing/subservicing portfolio  Exceed industry capital requirements with significant cushion for expansionRetired over $410 million of unsecured debt since 2014Subservicing wins continue to strengthen balance sheet ratios  Value Creation  Expected ROE improvement driven by subservicing and margin improvementsRepurchased $101 million of shares since authorization in December 2015(2)Repurchase shares when trading at a significant discount to book value  INVESTOR SUPPLEMENT   (1) Inside Mortgage Finance as of Q1’16(2) As of June 6, 2016 
 

 
 UPB to board beginning in Q3:$55 billion subservicing$2 billion of PLS$130 billion pipeline update(2):$79 billion in contract negotiations ($50 billion of subservicing)$18 billion progressed to next round of discussions$33 billion still under discussion  Servicing  Subservicing = higher margin, higher ROEPortfolio performance evidenced by reduced delinquenciesInvestments in technologies (e.g., website, IVR, mobile apps)Investments in customer experience reulting in lower complaintsRemain committed to exceeding 5.0 bps on average in 2016(1)  INVESTOR SUPPLEMENT   $18M cost out Q2’15-Q1’16  Driving operating profitability  bps  Diversified & growing servicing book  Portfolio Composition  Adjusted Pretax Income (bps)(3)  Estimates of future Unpaid Principal Balance and profitability are forward looking and based on a number of factors outside our control. Results could differ materially. The active pipeline of potential servicing transactions referenced above are identified opportunities and not currently serviced by the Company and there can be no assurance that these potential servicing transactions will ultimately be consummated, or will remain the same size.Please refer to Appendix and Endnotes for information on non-GAAP numbers and reconciliation. 
 

 
Abilityto enhance customer experience and increase customer retentionIncreases value of MSR holdingsCounter cyclical to servicing business with respect to interest rate movementsSolid, stable earnings since Q1 2014 Originations Significant opportunity to recapture PLS and purchase transactions remainExpanding streamline and other products to minimize impact of HARP expirationAbility to drive fulfillment costs lower Well positioned given current interest rate environment INVESTOR SUPPLEMENT Benefits of integrated platform Recapture is the most efficient replacement of MSR portfolio runoff Additional opportunities Recapture % $mm Pretax Income Q2’15 Pretax Income of $54mm has been adjusted to exclude non-recurring expenses of $4mm. Please refer to Endnotes for information on Adjusted Pretax Income for Q2’15.

 
   Q1 pipeline of over 7,800 assets as of Q1Continue to work with GSE and other third party clientsContinue to invest in retail, B2C opportunities  XomeSM  INVESTOR SUPPLEMENT   Property disposition  National, centralized title providerMore than 60% of revenues from third party clients Continue to gain market share  Title operations  Launched Xome and Xome.com mobile apps in 2015Signed agreement to white-label Xome and search componentsEnhancing workflow, valuation and auction platforms – licensable to third parties  Technology platform    3rd Party Business Percentage  Pretax Income  Pretax income estimates are forward looking and based on a number of factors outside our control. Results could differ materially.   $mm  (2) 

 
 Significantly exceed regulatory capital standardsMaintaining excess liquidity in current environmentSubservicing enhances ability to de-lever and/or repurchase shares  Capital Position and Stockholder Value  INVESTOR SUPPLEMENT   Significant room for growth  $410 million of unsecured debt retired since 2014– fortifying balance sheet$101 million of shares repurchased at significant discount to tangible book value60% of capacity remaining under share repurchase program  Returning value to shareholders    Q1’16    FHFA Minimum    Cushion  Tangible Net Worth  $1,457    $908    $549  Tangible Net Worth / Assets(1)  13%    6%    7%  Liquidity(2)  $644    $83    561  (1) Calculated in accordance with FHFA’s capital and liquidity standards. As of April 2015, Nationstar was granted waivers to exclude the Generations Reverse assets ($4.9B as of Q1’16) from the calculation of Tangible Net Worth / Assets.(2) Liquidity includes cash, cash equivalents and available capacity to immediately borrow agency servicer advance facilities in which unencumbered collateral is available to pledge and marketable securities  Cushion on Liquidity Requirements  $mm  Corporate Debt Balance  $mm 

 
 Why Mr. Cooper?Promises a simpler, more personal relationship with our customersAligns the company behind spirit of customer advocacyEliminates confusion between Nationstar and GreenlightWhat is Mr. Cooper about?Creating the most customer-focused company in the industryChallenging convention and status quo... i.e., viewing regulatory matters as opportunities, not hurdlesHow will we invest?Technology enhancements that improve our CSRs ability to assist customers and that allow customers to help themselvesStreamline loan origination and servicing processesRevamp customer interactions (e.g., IVR, mailings, web, glass house)When?Dependent upon licensing, but expected to be late summer to our existing 2.5 million customers  Becoming the Benchmark for Customer Service  INVESTOR SUPPLEMENT  
 

 Increases customer retention and improves value of MSR assetSecures position as preferred industry partnerEnhances brand loyalty and increases compliments versus complaintsIncreases profitability   Enhanced customer satisfaction…  INVESTOR SUPPLEMENT   Sources: CFPB and Inside Mortgage Finance. 
 

 
 Endnotes  Adjusted Pretax Income (“Adjusted Pretax Income” or “PTI”) (Servicing) This disclaimer applies to every usage of Adjusted Pretax Income in this presentation. Adjusted Pretax Income is a metric that is used by management to provide a better depiction of the results of servicing operations by excluding changes in fair value of the MSR and non-recurring expenses. Adjusted Pretax Income (“Adjusted Pretax Income” or “PTI”) (Originations) This disclaimer applies to every usage of Adjusted Pretax Income in this presentation. Adjusted Pretax Income is a metric that is used by management to provide a better depiction of the results of originations operations by excluding non-recurring expenses. Servicing profitability Servicing profitability is a metric used by management to estimate earnings from the servicing segment. Servicing profitability begins with adjusted earnings and adjusts for financing structure payments.  10 
 

 
 Appendix: Servicing Operational P&L (in bps)  $ in mm, unless otherwise noted  Q1’15    Q2’15    Q3’15    Q4’15    Q1’16  Operating Revenue  38.9    41.3    41.9     41.0    39.9   Labor costs(1)  6.2    6.2    6.2     6.1    6.8   Direct corporate allocation  4.1    4.0    4.0     4.5    4.4   Other direct expenses(1)  8.7    10.1    9.9     7.9    7.4  Total Expenses  18.9    20.3    20.1     18.6    18.6   Other (income) / expense  1.5    0.3    0.1     0.3    (0.2)  Adj. operating income b/f amortization  18.4    20.8    21.8     22.1    21.5   MSR amortization  (11.2)    (13.6)    (13.1)    (11.9)    (11.5)   Excess spread accretion  3.3    4.6    4.8     4.6    4.9  Total amortization(2)  (7.9)    (8.9)    (8.2)    (7.2)    (6.6)  Adjusted operating income  10.5    11.8    13.5     14.9    14.9   MSR financing liability payments  3.6    3.2    3.0     2.8    2.8   Excess spread payments – principal  4.2    4.2    4.7     4.8    4.8   Excess spread payments – interest / other  2.0    2.1    2.2     2.3    2.3  Total financing structure payments  9.8    9.5    10.0     9.8    9.9  Adjusted Pretax income  0.7    2.3    3.6     5.1    5.0   Excess Spread / Financing MTM  0.0    (4.4)    6.4    (5.9)    0.3   MSR MTM  (11.4)    12.7    (21.5)    12.6    (26.1)  Total MTM adjustments  (11.4)    8.3    (15.2)    6.6    (25.8)  Non-recurring expenses  --    (0.9)    (1.1)    ---    (0.4)  GAAP Pretax Income  (10.6)    9.7    (12.7)    11.7    (21.2)  Average UPB ($B)  $385.6    $394.9    $399.9    $403.1    $392.0    Excludes severance and other non-recurring itemsPreviously, the release of mortgage servicing liabilities related to GNMA buy-outs was reflected in the Operating P&L as a reduction of amortization totaling $16mm in Q1’16 and $10mm in Q4’15, respectively. These items have been reclassified, for presentation purposes, to the Operating Revenue line item in all periods.    11 
 

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