Rithm earnings for the third quarter of 2026 showed earnings available for distribution falling to $0.55 per diluted share from $0.60 in the previous quarter, while GAAP profit rose sharply. Results released on October 23 for the quarter ended September 30 also showed stronger operating income at Newrez despite a 19% quarterly decline in funded mortgage production.
Key Takeaways
- Earnings available for distribution remained above the $0.25 common dividend despite declining from the second quarter.
- Newrez increased operating income as mortgage production fell, but management expects further near-term volume and margin pressure.
- Asset management AUM held near $61 billion, while projected Newrez technology savings are expected to begin in 2027.
Table of Contents
- Rithm earnings separate GAAP gains from distributable income
- Newrez earns more on lower mortgage production
- Fundraising adds capital, but AUM remains steady
- Genesis lending and office leasing broaden the results
- Conclusion
Rithm earnings separate GAAP gains from distributable income
Rithm’s third-quarter financial results put GAAP net income attributable to common stockholders at $217.1 million, compared with $20.2 million in the second quarter. Earnings available for distribution, or EAD, moved in the opposite direction, declining to $315.3 million from $338.9 million.
The distinction matters because EAD is a non-GAAP measure that excludes selected valuation changes, depreciation, deferred taxes and other items. It is not a substitute for GAAP income or operating cash flow. The increase in GAAP profit therefore did not represent a matching improvement in the company’s distributable earnings measure.
The common dividend was unchanged at $0.25 per share. Rithm said the quarter marked its 28th consecutive quarter with EAD exceeding dividends paid, although that history does not establish future payouts.
| Item | Details |
|---|---|
| GAAP diluted EPS | Q3 2026: $0.38; Q2 2026: $0.04 |
| EAD per diluted share | Q3 2026: $0.55; Q2 2026: $0.60 |
| Common dividend per share | Q3 2026: $0.25; Q2 2026: $0.25 |
| Book value per common share | $12.51 at September 30, 2026 |
Newrez earns more on lower mortgage production
Newrez generated $329.7 million in pretax operating income, excluding mortgage servicing rights mark-to-market changes and other non-operating items, up from $307.6 million in the second quarter. Its annualized operating return on equity, also a non-GAAP measure, was 24%.
Funded mortgage production totaled $12.9 billion, down 19% quarter over quarter and 21% year over year. Management said wholesale competition remained intense and expected further margin pressure in the fourth quarter. On the earnings call, it estimated that production would fall close to 25% between September and October.
The servicing business provides a counterweight to weaker originations. Newrez ended September with $878.9 billion in servicing unpaid principal balance, including $282.8 billion serviced for third parties. Management said it would prioritize origination margins rather than chase market share.
CEO Michael Nierenberg also outlined approximately $125 million in potential annualized savings from technology and artificial intelligence investments at Newrez. He expects savings to begin during 2027 and continue through 2028; these are projected benefits, not savings already realized in the reported quarter.
Fundraising adds capital, but AUM remains steady
Rithm’s asset management platform, including Sculptor and Crestline, had approximately $61 billion in assets under management at September 30, broadly unchanged from the previous quarter. Gross new capital and fund commitment inflows were $569 million during the quarter, bringing the year-to-date total to $2.9 billion.
Fresh commitments and a flat quarter-end AUM figure measure different things: gross inflows are not the same as net asset growth. Rithm’s AUM definition also includes uncalled commitments and some assets that do not generate management fees.
Nierenberg identified wealth-distribution relationships, capital solutions and asset-based finance products as areas for expansion. Management’s target of $75 billion to $80 billion in AUM by 2028 remains an objective rather than a completed increase.
Genesis lending and office leasing broaden the results
Genesis originated $1.5 billion of residential transition loans during the quarter, up 25% year over year. Year-to-date production reached $5 billion, exceeding its full-year 2025 total. Nierenberg guided to approximately $6 billion to $6.5 billion of production for 2026 while emphasizing credit quality.
Elecor signed 320,000 square feet of new leases in the quarter, taking year-to-date leasing activity to approximately 1 million square feet. Rents across that activity were 22% higher than on 2025 transactions. The business also completed a joint venture for 1301 Avenue of the Americas, retaining a significant interest and continuing to operate the property.
Conclusion
The next reporting period will show how Newrez’s servicing income holds up against weaker mortgage production and competitive margins. The projected technology savings have a later timetable, beginning in 2027, rather than providing an immediate fourth-quarter offset.
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