Rithm Capital Corp. (NYSE:RITM) Q4 2022 Earnings Conference Call February 8, 2023 8:00 AM ET

Company Participants

Phil Sivin - Chief Legal Officer

Michael Nierenberg - Chairman, Chief Executive Officer & President

Nick Santoro - Chief Financial Officer

Baron Silverstein - President, NewRez

Conference Call Participants

Bose George - KBW

Doug Harter - Credit Suisse

Eric Hagen - BTIG

Kevin Barker - Piper Sandler

Stephen Laws - Raymond James

Trevor Cranston - JMP Securities

Giuliano Bologna - Compass Point

Bose George - KBW

Operator

Good day, and welcome to the Rithm Capital Fourth Quarter and Full Year 2022 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Phil Sivin. Please go ahead.

Phil Sivin

Thank you, and good morning, everyone. I'd like to thank you for joining us today for Rithm Capital's fourth quarter and full year 2022 earnings call. Joining me today are Michael Nierenberg, Chairman, CEO and President of Rithm; and Nick Santoro, Chief Financial Officer of Rithm Capital.

Throughout the call, we are going to reference the earnings supplement that was posted to the Rithm Capital website, www.rithmcap.com this morning. If you've not already done so, I'd encourage you to download the presentation now.

I'd like to point out that certain statements today will be forward-looking statements. These statements, by their nature, are uncertain and may differ materially from actual results. I encourage you to review the disclaimers in our press release and earnings supplements regarding forward-looking statements and review the risk factors contained in our annual and quarterly reports filed with the SEC.

In addition, we will be discussing some non-GAAP financial measures during today's call. Reconciliation of these measures to the most directly comparable GAAP measures can be found in our earnings supplement.

And with that, I will turn the call over to Mike.

Michael Nierenberg

Thanks, Phil. Good morning, everyone, and thanks for dialing in. 2022 was a transformational year for us in many ways. First, on the market, our broad experience in financial services investing served our shareholders well as we navigated some of the more difficult fixed income markets we've seen in a few years.

With the Federal Reserve raising rates seven times for a total of 425 basis points, the mortgage basis widening between 70 and 100 basis points, high yield index wider by almost 200 basis points and investment grade bond spreads wider by at least 25 basis points, capital markets essentially shut down during different periods. We managed to grow our book value by 5% during 2022, generated a GAAP return on equity of 15%, 11% on our core business and an economic return of 14%.