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Shares of Tampa-based mortgage origination and servicing firm Walter Investment Management Corp., hovering around its 52-week low in early August, scored a bump in the middle of the month.
The shares, $2.27 on Aug. 4 and $2.28 on Aug 8 (the 52-week low is $2.24) were up more than 50% on Aug. 12, to $3.53. Traded on the NYSE under the symbol WAC, shares closed Aug. 16 up even higher, at $3.65.
The company announced several significant moves in an Aug. 9 earnings release that goosed shares. A big one: It announced a new CEO would join the firm in the fourth quarter — a news nugget that came without the fanfare of a separate media blitz that usually accompanies hires of that stature. The new CEO will be Anthony Renzi, who, according to the earnings release, was most recently the COO, managing director and head of operations for Citi's North America retail bank, commercial bank and CitiMortgage. Renzi, the release adds, has more than 30 years' experience in mortgage banking.
Other moves that likely pleased Walter investors from the second quarter statement include:
It sold at least $30 billion in mortgage servicing rights to a subsidiary of New Residential Investment Corp. for around $231 million;
Firm increased cash and cash equivalents by $118.5 million in the quarter;
Improved liquidity by around $60 million, a result, say company of officials, of advance initiatives;
Generated roughly $75 million in annual savings from efficiency steps, consolidation of IT employees and some layoffs.
Challenges for Walter linger, and the firm's shares remain well below its 52-week high of $18, reached last September.
The company, for example, has had several rough quarters, and the most recent quarter was no exception. The net loss in the quarter was $232.4 million, or $6.49 a share, compared to a net loss of $38.1 million, or $1.01 a share in the quarter that ended June 30, 2015. The company posted $187.5 million in revenues in the quarter, down 54% from $412 million in 2015.
“While second quarter performance showed improvement in some areas as compared to the prior quarter,” Walter Executive Chairman and interim CEO George Awad says in the earnings release, “our results continue to fall short of expectations, driven by both external factors such as the declining interest rate environment as well as internal operational inefficiencies.”
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