Rithm Capital (NYSE: RITM) grows Q1 2026 earnings and expands CRE, asset management
Filing Impact
Filing Sentiment
Form Type
10-Q
Rithm Capital Corp. reports solid results for the three months ended March 31, 2026, with net income attributable to common stockholders of $67.8 million, or $0.12 per diluted share, compared with $0.07 a year earlier. Total revenue rose to $1.38 billion, driven by servicing, interest income, loan sale gains, asset management fees and sharply higher rental revenue following recent acquisitions.
Assets were $53.4 billion and stockholders’ equity $9.14 billion as of March 31, 2026. The company paid common dividends of $0.25 per share and expanded preferred equity, while maintaining REIT status and operating across origination and servicing, transitional lending, asset management, investment portfolios and commercial real estate.
Positive
- Stronger profitability and EPS: Net income attributable to common stockholders rose to $67.8 million and diluted EPS to $0.12 for the quarter, up from $36.5 million and $0.07 a year earlier, reflecting improved earnings across the platform.
- Expanded, diversified platform: Completion and integration of Crestline and Paramount/Elecor add fee-based asset management revenue and commercial real estate rental income, enlarging Rithm’s presence in credit, insurance-related investments and Class A office properties.
Negative
- None.
Insights
Rithm shows higher earnings, larger platform and stable dividends.
Rithm Capital delivered higher scale and profitability, with total revenue of $1.38 billion and net income attributable to common stockholders of $67.8 million for the quarter ended March 31, 2026. EPS improved to $0.12 while maintaining a $0.25 common dividend.
The balance sheet remains sizable at $53.4 billion of assets and $9.14 billion of total equity. Mortgage servicing rights of $10.86 billion, commercial real estate of $5.15 billion, and consumer and residential loan portfolios provide diversified income streams, albeit with exposure to credit, rate and real estate market risks.
Recent acquisitions of Crestline and Paramount/Elecor broaden asset management and Class A office exposure, adding fee revenue and rental income but also integration and CRE-cycle risk. Investors may focus on segment profitability, MSR fair value sensitivity and commercial office performance in subsequent quarters as more post‑acquisition data is reported.
Key Figures
Total revenue: $1,380,236,000
Net income attributable to Rithm Capital Corp.: $102,678,000
Net income attributable to common stockholders: $67,831,000
+5 more
8 metrics
Total revenue
$1,380,236,000
Three months ended March 31, 2026
Net income attributable to Rithm Capital Corp.
$102,678,000
Three months ended March 31, 2026
Net income attributable to common stockholders
$67,831,000
Three months ended March 31, 2026
Diluted EPS
$0.12 per share
Three months ended March 31, 2026
Total assets
$53,374,544,000
As of March 31, 2026
Total stockholders’ equity
$9,144,157,000
As of March 31, 2026
MSRs and MSR financing receivables
$10,859,933,000
Carrying value as of March 31, 2026
Commercial real estate, net
$5,149,491,000
Carrying value as of March 31, 2026
Key Terms
mortgage servicing rights ("MSRs"), variable interest entities ("VIEs"), real estate investment trust ("REIT"), residential mortgage-backed securities ("RMBS"), +2 more
6 terms
mortgage servicing rights ("MSRs") financial
"Mortgage servicing rights and mortgage servicing rights financing receivables, at fair value"
variable interest entities ("VIEs") financial
"The Company's consolidated balance sheets include assets and liabilities of consolidated variable interest entities"
real estate investment trust ("REIT") financial
"currently operates as an internally managed real estate investment trust ("REIT")"
A real estate investment trust (REIT) is a company that owns and operates income-producing property—such as apartments, offices, shopping centers, or warehouses—but is structured so people can buy shares in it like a stock. For investors it matters because a REIT turns physical real estate into an easy way to earn regular cash payouts from rent and property profits, while providing liquidity and diversification similar to owning a slice of many buildings rather than one whole property.
residential mortgage-backed securities ("RMBS") financial
"Newrez securitizes loans into residential mortgage-backed securities ("RMBS") through the Agencies"
asset management revenue financial
"Asset management revenue | 106,587 | 87,672"
goodwill financial
"The Company recognized goodwill of approximately $182,811 primarily driven by the assembled workforce acquired"
Goodwill is the extra value a buyer pays for a company above the measurable worth of its buildings, inventory and other tangible items, reflecting things like brand reputation, customer loyalty and expected future profits. Think of paying more for a café because of its famous name and regulars rather than its furniture alone. It matters to investors because changes in goodwill — for example a write-down if expected benefits don’t materialize — can reduce reported earnings and signal that past acquisitions aren’t delivering as hoped.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2026
or
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________to________________
Commission File Number: 001-35777
| (Exact name of registrant as specified in its charter) | ||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||||||||
| (Registrant’s telephone number, including area code) | |||||
None
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class: | Trading Symbol(s) | Name of each exchange on which registered: | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | |||||||||||||
Smaller reporting company | Emerging growth company | ||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Common stock, $0.01 par value per share: 558,306,597 shares outstanding as of May 1, 2026.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS AND RISK FACTORS SUMMARY
This report contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which statements involve substantial risks and uncertainties. Such forward-looking statements relate to and are based on, among other things, the operating performance of our investments, the stability of our earnings, our financing needs, certain assumptions, future expectations, future plans and strategies, projections of results of operations, cash flows or financial condition, the size and/or attractiveness of market opportunities, the residential and commercial real estate (“CRE”) markets and general economic conditions or other forward-looking information. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “may,” “will,” “plan,” “should,” “potential,” “intend,” “expect,” “endeavor,” “seek,” “anticipate,” “estimate,” “overestimate,” “underestimate,” “believe,” “could,” “project,” “predict,” “continue” or other similar words or expressions. Our ability to predict results or the actual outcome of future plans or strategies is inherently limited. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results, activities and performance could differ materially from those set forth in the forward-looking statements. These forward-looking statements involve risks, uncertainties and other factors that may cause our actual results in future periods to differ materially from forecasted results.
Our ability to implement our business strategy is subject to numerous risks, and the following summarizes the principal risks that may materially adversely affect our business, financial condition, results of operations and cash flows. The following should be read in conjunction with the more complete discussion of risk factors we face, which are set forth under Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “2025 Form 10-K”). These risks and factors include, among others:
•our ability to successfully execute our business strategy and manage complex operational risks across multiple businesses and asset classes;
•the valuation of certain of our assets and investments requires significant judgment and is based on various assumptions;
•the illiquidity of certain of our investments, which could impede our ability to adjust our portfolio in response to changes in economic and other conditions or to realize the value at which such investments are carried if we are required to dispose of them;
•risks related to the geographic distribution of the collateral underlying Newrez LLC (“Newrez”) and Genesis Capital LLC (“Genesis”) loans, as well as other investments, including, but not limited to, environmental risks;
•risks related to our use of, or choice to not use, leverage, match funding and/or hedging strategies;
•the impact of economic, market and political conditions, both nationally and internationally, including, but not limited to, the impact of geopolitical tensions or conflicts, including the conflict in Iran, wars, tariffs, ongoing inflation, government shutdowns, increased market volatility and governmental intervention in the mortgage and credit markets;
•counterparty concentration risk, including, but not limited to, reliance upon a single third-party software-as-a-service provider in our mortgage servicing operations and counterparty concentration in certain of our financing partners and subservicers;
•competition within the finance, real estate and asset management industries;
•risks related to our origination and servicing operations, including, but not limited to, operational risks; class action lawsuits; deficiencies and delays in servicing and foreclosure practices; delays in or failure to receive regulatory approval; ability to modify, resell or refinance early buyout loans; ability to recover servicer advances; ability to maintain minimum servicer ratings; increases in loan delinquencies and foreclosures; and prepayment risk;
•risks associated with residential mortgage loans, including subprime mortgage loans, home equity lines of credit (“HELOCs”) and consumer loans, including prepayment, foreclosure and default risks, and the impact of risks associated with deficiencies in servicing and foreclosure practices, may have on the value of our mortgage servicing rights (“MSRs”), excess mortgage servicing rights (“Excess MSRs”), servicer advance investments, residential mortgage-backed securities (“RMBS”), residential mortgage loans, HELOCs and consumer loan portfolios;
•risks related to our use of new underwriting programs involving digital assets;
•risks associated with our Genesis business, including, but not limited to, borrower risk, risks related to short-term loans and balloon payments, risks related to construction loans and “fix-and-flip” loans, concentration risk and the greater risk of loss as compared to conventional mortgage loans;
•risks related to our asset management business, including, but not limited to, redemption risk, market risk, historical return-related risk, risks related to investment professionals, leverage risk, diligence risk, liquidity risk, risks related to the liquidation of the funds and loss of management fees, valuation risk, risks related to minority investments, foreign investment risk, regulatory risk, risks related to hedging, risks related to conflicts of interest and risk management and investment strategy risks;
•risks related to our management of Rithm Property Trust Inc. (“Rithm Property Trust”) and Rithm Perpetual Life Residential Trust (“R-HOME”);
•risks related to our recent acquisitions of Crestline Management, L.P. (“Crestline”) and Paramount Group, Inc. (“Paramount” or “Elecor”), including, but not limited to, integration risk and the increased exposure to risks in the CRE industry;
•risks associated with our sponsorship of and investment in Rithm Acquisition Corp., a special purpose acquisition company;
•risks related to the fact that we do not have legal title to the MSRs underlying our Excess MSRs or certain of our servicer advance investments;
•risks related to securitization of any loans originated and/or serviced by our subsidiaries;
•the higher default risk associated with our consumer loan portfolio;
•risks associated with our single-family rental (“SFR”) business, including, but not limited to, risks related to adverse economic, regulatory or environmental conditions, the wind-down of our SFR portfolio or other events;
•interest rate fluctuations and changes in credit spreads;
•risk of a prolonged economic slowdown, a lengthy or severe recession, sustained inflationary pressures or declining real estate values, any of which could harm our business;
•our ability to maintain our exclusion from registration under the Investment Company Act of 1940 and limits on our operations from maintaining such exclusion;
•our ability to comply with extensive and often changing federal, state and local governmental regulation on our operations and our subsidiaries, including, but not limited to, our origination and servicing business and our entities registered with the Securities and Exchange Commission (“SEC”), including our registered investment advisors;
•our exposure to federal and state regulatory matters and other litigation, which may adversely impact us;
•our ability to obtain and maintain required licenses to purchase, hold, enforce or sell residential mortgage loans and/or MSRs;
•risks related to the legislative and regulatory environment, including, but not limited to, uncertainty regarding the federal conservatorship of Federal National Mortgage Association (“Fannie Mae”) and Federal Home Loan Mortgage Corporation (“Freddie Mac,” and together with Fannie Mae, “GSEs”), risk retention regulations, legislation permitting modifications to the terms of outstanding loans, potential legislation impacting the SFR industry and the impact of uncertainty surrounding regulatory oversight in the current federal administration;
•the risk that private litigation could result in significant legal and other liabilities and reputational harm;
•risks associated with our indebtedness, including, but not limited to, our senior unsecured notes, related restrictive covenants and non-recourse long-term financing structures;
•our ability to obtain and maintain financing in connection with our servicer advances and interests in MSRs;
•our ability to maintain our qualification as a real estate investment trust (“REIT”) for United States (“U.S.”) federal income tax purposes and limits on our operations from maintaining REIT status;
•our ability to pay distributions on our common stock;
•dilution experienced by our existing stockholders as a result of the conversion of the preferred stock into shares of common stock or the vesting of performance stock units and restricted stock units or other compensatory securities;
•our ability to appropriately manage or address conflicts of interest;
•increased focus on sustainability issues, including, but not limited to, climate change and related regulations, which may adversely affect our business and damage our reputation;
•our development and use of artificial intelligence technology, which could lead to legal or regulatory actions, harm our reputation, or have a significant negative impact on our business;
•the risk of cybersecurity incidents and technology disruptions or failures; and
•the impact from any future acquisitions, and our ability to successfully integrate the acquired company and realize the expected benefits.
We also direct readers to other risks and uncertainties referenced under Part I, Item 1A. “Risk Factors” in the 2025 Form 10-K. We caution that you should not place undue reliance on any of our forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise from time to time, and it is impossible for us to predict those events or how they may affect us. Except as required by law, we are under no obligation (and expressly disclaim any obligation) to update or alter any forward-looking statement, whether written or oral, that we may make from time to time, whether as a result of new information, future events or otherwise.
SPECIAL NOTE REGARDING EXHIBITS
In reviewing the agreements included as exhibits to this Quarterly Report on Form 10-Q, please remember they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about Rithm Capital Corp. (together with its consolidated subsidiaries, the “Company,” “Rithm Capital” or “we,” “our” and “us”) or the other parties to the agreements. The agreements contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:
•should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements proved to be inaccurate;
•have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;
•may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and
•were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.
Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about the Company may be found elsewhere in this Quarterly Report on Form 10-Q and the Company’s other public filings, which are available without charge through the SEC’s website at http://www.sec.gov.
The Company acknowledges that, notwithstanding the inclusion of the foregoing cautionary statements, it is responsible for considering whether additional specific disclosures of material information regarding material contractual provisions are required to make the statements in this report not misleading.
| RITHM CAPITAL CORP. | |||||||||||
| FORM 10-Q | |||||||||||
INDEX | |||||||||||
| PAGE | |||||||||||
Part 1. Financial Information | |||||||||||
Item 1. Financial Statements (Unaudited) | 1 | ||||||||||
Consolidated Balance Sheets | 1 | ||||||||||
Consolidated Statements of Operations | 2 | ||||||||||
Consolidated Statements of Comprehensive Income | 3 | ||||||||||
Consolidated Statements of Changes in Stockholders' Equity | 4 | ||||||||||
Consolidated Statements of Cash Flows | 6 | ||||||||||
Notes to Consolidated Financial Statements | 8 | ||||||||||
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | 85 | ||||||||||
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 123 | ||||||||||
Item 4. Controls and Procedures | 126 | ||||||||||
Part II. Other Information | |||||||||||
Item 1. Legal Proceedings | 127 | ||||||||||
Item 1A. Risk Factors | 127 | ||||||||||
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 127 | ||||||||||
Item 3. Defaults Upon Senior Securities | 127 | ||||||||||
Item 4. Mine Safety Disclosures | 127 | ||||||||||
Item 5. Other Information | 127 | ||||||||||
Item 6. Exhibits | 128 | ||||||||||
Signatures | 129 | ||||||||||
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
| CONSOLIDATED BALANCE SHEETS | ||
| (dollars in thousands, except share and per share data) | ||
March 31, 2026 (Unaudited) | December 31, 2025 | ||||||||||
| Assets | |||||||||||
| Mortgage servicing rights and mortgage servicing rights financing receivables, at fair value | $ | $ | |||||||||
Government and government-backed securities (includes $ | |||||||||||
Residential mortgage loans (includes $ | |||||||||||
Consumer loans held-for-investment, at fair value(A) | |||||||||||
Residential transition loans, at fair value | |||||||||||
| Residential mortgage loans subject to repurchase | |||||||||||
Real estate, net(A) | |||||||||||
| Insurance company investments, at fair value | |||||||||||
Cash, cash equivalents and restricted cash(A) | |||||||||||
| Servicer advances receivable | |||||||||||
Other assets (includes $ | |||||||||||
Assets of Consolidated Entities(A): | |||||||||||
| Investments, at fair value and other assets | |||||||||||
| Total Assets | $ | $ | |||||||||
| Liabilities and Equity | |||||||||||
| Liabilities | |||||||||||
Secured financing agreements(A) | $ | $ | |||||||||
Secured notes and bonds payable (includes $ | |||||||||||
| Residential mortgage loan repurchase liability | |||||||||||
| Unsecured notes, net of issuance costs | |||||||||||
| Interest sensitive insurance contract liabilities | |||||||||||
| Dividends payable | |||||||||||
Accrued expenses and other liabilities (includes $ | |||||||||||
Liabilities of Consolidated Entities(A): | |||||||||||
| Notes payable, at fair value and other liabilities | |||||||||||
| Total Liabilities | |||||||||||
Commitments and Contingencies (Note 25) | |||||||||||
Redeemable Non-controlling Interests of Consolidated Subsidiaries (Note 22) | |||||||||||
| Stockholders’ Equity | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Accumulated other comprehensive income | |||||||||||
| Stockholders’ Equity in Rithm Capital Corp. | |||||||||||
| Non-controlling interests in equity of consolidated subsidiaries | |||||||||||
| Total Stockholders’ Equity | |||||||||||
| Total Liabilities and Equity | $ | $ | |||||||||
(A)The Company's consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIEs”), including funds and collateralized financing entities (“CFEs”) that are presented separately within assets and liabilities of consolidated entities. VIE assets can only be used to settle obligations and liabilities of the VIEs. VIE creditors do not have recourse to Rithm Capital Corp. As of March 31, 2026 and December 31, 2025, total assets of such consolidated VIEs were $10.9 billion and $10.7 billion, respectively, and total liabilities of such consolidated VIEs were $8.2
See notes to consolidated financial statements.
1
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||
| (dollars in thousands, except share and per share data) | ||
| Three Months Ended March 31, | |||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||
| Servicing fee revenue, net and interest income from MSRs and MSR financing receivables | $ | $ | |||||||||||||||||||||||||||
Change in fair value of MSRs and MSR financing receivables, net of economic hedges (includes realization of cash flows of $( | ( | ( | |||||||||||||||||||||||||||
| Servicing revenue, net | |||||||||||||||||||||||||||||
| Interest income | |||||||||||||||||||||||||||||
| Gain on originated residential mortgage loans, held-for-sale, net | |||||||||||||||||||||||||||||
| Asset management revenue | |||||||||||||||||||||||||||||
| Rental revenue | |||||||||||||||||||||||||||||
| Other revenue | |||||||||||||||||||||||||||||
| Expenses | |||||||||||||||||||||||||||||
| Interest expense and warehouse line fees | |||||||||||||||||||||||||||||
| General, administrative and operating | |||||||||||||||||||||||||||||
| Compensation and benefits | |||||||||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||||||||
| Other Income (Loss) | |||||||||||||||||||||||||||||
| Realized and unrealized losses, net | ( | ( | |||||||||||||||||||||||||||
| Other income, net | |||||||||||||||||||||||||||||
| Income before Income Taxes | |||||||||||||||||||||||||||||
| Income tax expense (benefit) | ( | ||||||||||||||||||||||||||||
| Net Income | |||||||||||||||||||||||||||||
| Non-controlling interests in income (loss) of consolidated subsidiaries | ( | ||||||||||||||||||||||||||||
| Redeemable non-controlling interests in income of consolidated subsidiaries | |||||||||||||||||||||||||||||
| Net Income Attributable to Rithm Capital Corp. | |||||||||||||||||||||||||||||
| Change in redemption value of redeemable non-controlling interests | |||||||||||||||||||||||||||||
| Dividends on preferred stock | |||||||||||||||||||||||||||||
| Net Income Attributable to Common Stockholders | $ | $ | |||||||||||||||||||||||||||
| Net Income per Share of Common Stock | |||||||||||||||||||||||||||||
| Basic | $ | $ | |||||||||||||||||||||||||||
| Diluted | $ | $ | |||||||||||||||||||||||||||
| Weighted Average Number of Shares of Common Stock Outstanding | |||||||||||||||||||||||||||||
| Basic | |||||||||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||||||||
| Dividends Declared per Share of Common Stock | $ | $ | |||||||||||||||||||||||||||
See notes to consolidated financial statements.
2
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) | ||
| (dollars in thousands) | ||
| Three Months Ended March 31, | |||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||
| Net Income | $ | $ | |||||||||||||||||||||||||||
| Other Comprehensive Income: | |||||||||||||||||||||||||||||
| Unrealized gain on available-for-sale securities, net of tax | |||||||||||||||||||||||||||||
| Cumulative translation adjustment, net of tax | |||||||||||||||||||||||||||||
| Comprehensive Income | |||||||||||||||||||||||||||||
| Comprehensive income (loss) attributable to non-controlling interests | ( | ||||||||||||||||||||||||||||
| Comprehensive income attributable to redeemable non-controlling interests | |||||||||||||||||||||||||||||
| Comprehensive Income Attributable to Rithm Capital Corp. | $ | $ | |||||||||||||||||||||||||||
See notes to consolidated financial statements.
3
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED) | ||
FOR THE THREE MONTHS ENDED MARCH 31, 2026 | ||
| (dollars in thousands, except share data) | ||
| Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Stockholders’ Equity in Rithm Capital Corp. | Non-controlling Interests in Equity of Consolidated Subsidiaries | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends declared on common stock | — | — | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends declared on preferred stock | — | — | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Capital contributions | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Capital distributions | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other capital activity | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of preferred stock | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Director share grants and stock-based compensation | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Comprehensive Income (Loss): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unrealized gain on available-for-sale securities, net of tax | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cumulative translation adjustment, net of tax | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total comprehensive income (loss) | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
4
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED), CONTINUED | ||
FOR THE THREE MONTHS ENDED MARCH 31, 2025 | ||
| (dollars in thousands, except share data) | ||
| Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Stockholders’ Equity in Rithm Capital Corp. | Non-controlling Interests in Equity of Consolidated Subsidiaries | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends declared on common stock | — | — | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends declared on preferred stock | — | — | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Capital contributions | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Capital distributions | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock repurchase | ( | ( | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Director share grants and stock-based compensation | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair value of SPAC warrants at issuance | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Change in redemption value of redeemable non-controlling interests | — | — | — | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Comprehensive Income: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income, excluding amounts attributable to redeemable non-controlling interests | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unrealized gain on available-for-sale securities, net of tax | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cumulative translation adjustment, net of tax | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total comprehensive income, excluding amounts attributable to redeemable non-controlling interests | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
See notes to consolidated financial statements.
5
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | ||
| (dollars in thousands) | ||
| Three Months Ended March 31, | ||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||
| Cash Flows From Operating Activities | ||||||||||||||||||||
| Net income | $ | $ | ||||||||||||||||||
| Adjustments to reconcile net income to net cash flows from operating activities: | ||||||||||||||||||||
| Change in fair value of investments, net | ( | |||||||||||||||||||
| Change in fair value of secured notes and bonds payable | ||||||||||||||||||||
| Gain on settlement of investments, net | ( | ( | ||||||||||||||||||
| Gain on sale of originated residential mortgage loans, held-for-sale, net | ( | ( | ||||||||||||||||||
| Gain on transfer of loans to real estate owned (“REO”) | ( | ( | ||||||||||||||||||
| Accretion and other amortization | ( | |||||||||||||||||||
| Provision for (reversal of) credit losses on securities, loans and REO | ( | |||||||||||||||||||
| Non-cash portions of servicing revenue, net | ||||||||||||||||||||
| Deferred tax provision | ( | |||||||||||||||||||
| Mortgage loans originated and purchased for sale, net of fees | ( | ( | ||||||||||||||||||
| Sales proceeds and loan repayment proceeds for residential mortgage loans, held-for-sale | ||||||||||||||||||||
| Sales proceeds and loan repayment proceeds of consolidated entities | ||||||||||||||||||||
| Interest received from servicer advance investments, RMBS, loans and other | ||||||||||||||||||||
| Premiums collected on insurance contract liabilities | ||||||||||||||||||||
| Benefits paid on insurance contract liabilities | ( | |||||||||||||||||||
| Principal repayments and sales proceeds of investments of consolidated entities | ||||||||||||||||||||
| Loan originations and investment purchases of consolidated entities | ( | ( | ||||||||||||||||||
| Changes in: | ||||||||||||||||||||
| Servicer advances receivable | ||||||||||||||||||||
| Other assets | ( | ( | ||||||||||||||||||
| Accrued expenses and other liabilities | ( | ( | ||||||||||||||||||
| Net cash provided by operating activities | ||||||||||||||||||||
6
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED), CONTINUED | ||
| (dollars in thousands) | ||
| Three Months Ended March 31, | ||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||
| Cash Flows From Investing Activities | ||||||||||||||||||||
| Purchase of servicer advance investments | ( | ( | ||||||||||||||||||
| Purchase of government-backed and other securities | ( | |||||||||||||||||||
| Proceeds from sale of government-backed and other securities | ||||||||||||||||||||
| Purchase of Treasury securities | ( | |||||||||||||||||||
| Reverse repurchase agreements entered and repurchase agreements closed | ( | |||||||||||||||||||
| Reverse repurchase agreements closed and repurchase agreements entered | ||||||||||||||||||||
| Maturity of Treasury securities | ||||||||||||||||||||
| Purchase of SFR properties, MSRs and other assets | ( | ( | ||||||||||||||||||
Purchase of residential transition loans | ( | |||||||||||||||||||
Origination of residential transition loans | ( | ( | ||||||||||||||||||
| Purchase of consumer loans | ( | |||||||||||||||||||
| Draws on revolving consumer loans | ( | ( | ||||||||||||||||||
| Purchase of commercial real estate | ( | |||||||||||||||||||
| Purchase of insurance company investments, at fair value | ( | |||||||||||||||||||
| Net settlement of derivatives and hedges | ( | |||||||||||||||||||
| Return of investments in Excess MSRs | ||||||||||||||||||||
| Return of investments in equity method investees | ||||||||||||||||||||
| Principal repayments from servicer advance investments | ||||||||||||||||||||
| Principal repayments from government, government-backed and other securities | ||||||||||||||||||||
| Principal repayments from residential mortgage loans | ||||||||||||||||||||
| Principal repayments from consumer loans | ||||||||||||||||||||
Principal repayments and sales proceeds of residential transition loans | ||||||||||||||||||||
| Principal repayments and sales proceeds of insurance company investments, at fair value | ||||||||||||||||||||
| Principal repayments and sales proceeds of investments of consolidated entities | ||||||||||||||||||||
| Settlement of sale of MSRs and MSR financing receivables | ( | |||||||||||||||||||
| Proceeds from sale of REO | ||||||||||||||||||||
| Net cash used in investing activities | ( | ( | ||||||||||||||||||
7
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED), CONTINUED | ||
| (dollars in thousands) | ||
| Three Months Ended March 31, | ||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||
| Cash Flows From Financing Activities | ||||||||||||||||||||
| Repayments of secured financing agreements | ( | ( | ||||||||||||||||||
| Repayments of warehouse credit facilities | ( | ( | ||||||||||||||||||
| Net settlement of margin deposits under repurchase agreements and derivatives | ||||||||||||||||||||
| Repayments of secured notes and bonds payable | ( | ( | ||||||||||||||||||
| Deferred financing fees | ( | ( | ||||||||||||||||||
| Dividends paid on common and preferred stock | ( | ( | ||||||||||||||||||
| Borrowings under secured financing agreements | ||||||||||||||||||||
| Borrowings under warehouse credit facilities | ||||||||||||||||||||
| Borrowings under residential transition loans financing | ||||||||||||||||||||
| Borrowings under notes receivable financing | ||||||||||||||||||||
| Borrowings under secured notes and bonds payable | ||||||||||||||||||||
| Proceeds from issuance of debt obligations of consolidated entities | ||||||||||||||||||||
| Repayments of debt obligations of consolidated entities | ( | ( | ||||||||||||||||||
| Issuance of common stock | ||||||||||||||||||||
| Issuance of preferred stock | ||||||||||||||||||||
| Repurchase of preferred stock | ( | |||||||||||||||||||
| Net proceeds from issuance of Class A Units of SPAC | ||||||||||||||||||||
| Contributions from non-controlling and redeemable non-controlling interests | ||||||||||||||||||||
| Distributions to non-controlling and redeemable non-controlling interests | ( | ( | ||||||||||||||||||
| Other capital activity | ||||||||||||||||||||
| Net cash provided by financing activities | ||||||||||||||||||||
| Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | ( | |||||||||||||||||||
Cash, Cash Equivalents and Restricted Cash, Beginning of Period (Note 12) | ||||||||||||||||||||
Cash, Cash Equivalents and Restricted Cash, End of Period (Note 12) | $ | $ | ||||||||||||||||||
| Supplemental Disclosure of Cash Flow Information | ||||||||||||||||||||
| Cash paid during the period for interest | $ | $ | ||||||||||||||||||
| Cash paid during the period for income taxes, net of refunds | ||||||||||||||||||||
| Supplemental Schedule of Non-Cash Investing and Financing Activities | ||||||||||||||||||||
| Dividends declared but not paid on common and preferred stock | ||||||||||||||||||||
| Transfer from residential mortgage loans to REO and other assets | ||||||||||||||||||||
| Real estate securities retained from loan securitizations | ||||||||||||||||||||
| Residential mortgage loans subject to repurchase | ||||||||||||||||||||
| Liabilities related to deconsolidated CFEs | ||||||||||||||||||||
See notes to consolidated financial statements.
8
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
1. BUSINESS AND ORGANIZATION
Rithm Capital Corp. (together with its consolidated subsidiaries, “Rithm Capital” or the “Company”) is a global alternative asset manager focused on real estate, credit and financial services. Rithm Capital is a Delaware corporation and currently operates as an internally managed real estate investment trust (“REIT”).
Rithm Capital seeks to generate long-term value for its investors by leveraging its investment expertise and operating capabilities to identify, acquire, manage and enhance the value of real estate-related and other financial assets. The Company operates an integrated platform, spanning asset-based finance, residential and commercial real estate lending, commercial real estate ownership and investment, mortgage servicing rights (“MSRs”), and structured credit, that combines operating companies, investment portfolios and asset management capabilities across the residential mortgage, real estate and credit markets. Headquartered in New York City, Rithm Capital has a global presence with offices in London, Hong Kong, Tokyo, Toronto and Abu Dhabi.
As of March 31, 2026, Rithm Capital conducted its business through the following segments: (i) Origination and Servicing, (ii) Residential Transitional Lending, (iii) Asset Management, (iv) Investment Portfolio and (v) Commercial Real Estate.
The Company’s Origination and Servicing segment operates through its wholly owned subsidiaries, Newrez LLC (“Newrez”) and New Residential Mortgage LLC (“NRM”). The Company’s residential mortgage origination business sources and originates loans through four channels: Direct to Consumer, Retail/Joint Venture, Wholesale and Correspondent.
The Company’s servicing platform complements its origination business and provides performing and special servicing capabilities to its subsidiaries and third-party clients. NRM and Newrez are licensed or otherwise eligible to service residential mortgage loans in all states within the United States of America (“U.S.”) and the District of Columbia. NRM and Newrez are also approved to service mortgage loans on behalf of investors, including Federal National Mortgage Association (“Fannie Mae”) and Federal Home Loan Mortgage Corporation (“Freddie Mac,” and together with Fannie Mae, the “GSEs”), and in the case of Newrez, Government National Mortgage Association (“Ginnie Mae,” collectively with the GSEs, the “Agencies” and each of Fannie Mae, Freddie Mac and Ginnie Mae, an “Agency”). Newrez is also eligible to perform servicing on behalf of other servicers as a subservicer.
Newrez sells substantially all of the mortgage loans it originates into the secondary market. Newrez securitizes loans into residential mortgage-backed securities (“RMBS”) through the Agencies. Loans that do not conform to the guidelines of the Agencies, the Federal Housing Administration (“FHA”), the U.S. Department of Agriculture or the Department of Veterans Affairs (for loans securitized with Ginnie Mae) are sold to private investors and mortgage conduits. Newrez generally retains the right to service the underlying residential mortgage loans sold and/or securitized by Newrez. NRM and Newrez are required to conduct aspects of their operations in accordance with applicable policies and guidelines of such Agencies. In addition, to origination and servicing activities, this segment includes operations conducted through wholly owned subsidiaries that provide mortgage- and real estate-related services, including Guardian Asset Management, a provider of field services and property management services, eStreet Appraisal Management LLC, a provider of appraisal services, and Avenue 365 Lender Services, LLC, a provider of title and settlement services.
The Company’s Residential Transitional Lending segment primarily operates through its wholly owned subsidiary, Genesis Capital LLC (“Genesis”), a residential transitional lender. Genesis originates and manages a portfolio of short-term, business-purpose mortgage loans used by experienced developers of and investors in residential real estate, including multifamily residential properties, to finance transitional projects, including construction, renovation and bridge financings.
The Company’s Asset Management segment conducts its activities primarily through Rithm Asset Management LLC and its wholly owned subsidiaries, including Sculptor Capital Management, Inc. (“Sculptor”), Crestline Management, L.P. and certain of its affiliates (collectively, “Crestline”) and Rithm Capital Advisors LLC (“RCA”). RCM GA Manager LLC (“RCM Manager” and, together with RCA, the “Rithm Advisers”) manages Rithm Property Trust Inc. (“Rithm Property Trust”) and Rithm Perpetual Life Residential Trust (“R-HOME”) pursuant to management and/or advisory agreements. Through Sculptor, Crestline and the Rithm Advisers, the Company provides asset management services and investment products through commingled funds, separate accounts and other alternative investment vehicles, generating primarily fee-based revenues.
9
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
The Company’s Investment Portfolio segment includes investments in real estate-related assets and operating businesses across the residential mortgage and real estate lifecycle. These investments primarily consist of residential mortgage loans, single-family rental (“SFR”) properties, consumer loans, non-Agency securities, excess mortgage servicing rights (“Excess MSRs”) and servicer advance investments, which are held on the Company’s consolidated balance sheets and generate income primarily through interest income, rental revenue and other investment portfolio revenues.
The Company’s Commercial Real Estate segment includes the ownership, operation and management of a portfolio of commercial real estate (“CRE”) assets, primarily Class A office properties located in New York City and San Francisco. The segment reflects the Company’s expansion into CRE equity ownership and operations, including the acquisition of Paramount Group, Inc. and certain of its affiliates (“Paramount” or “Elecor”) in December 2025. The Company manages these assets as part of its broader CRE platform, generating revenues primarily from rental revenue and other property-related revenues. In April 2026, the Company announced the rebranding of the Paramount platform to Elecor Properties.
Rithm Capital has elected and intends to qualify to be taxed as a REIT for U.S. federal income tax purposes. As such, Rithm Capital will generally not be subject to U.S. federal corporate income tax on that portion of its net income that is distributed to stockholders if it distributes at least 90% of its REIT taxable income to its stockholders by prescribed dates and complies with various other requirements. See Note 2 and Note 24 for additional information regarding Rithm Capital’s taxable REIT subsidiaries (“TRSs”).
2. BASIS OF PRESENTATION
Reclassifications — Certain prior period amounts in Rithm Capital’s consolidated financial statements and respective notes have been reclassified to be consistent with the current period presentation. In particular, the Company reclassified gains and losses related to certain derivatives and government and government-backed securities economically hedging MSRs that were previously reported within realized and unrealized gains (losses), net, to the change in fair value of MSRs and MSR financing receivables, net of economic hedges line item on the consolidated statements of operations. Such reclassifications had no impact on net income, total assets, total liabilities, stockholders’ equity or cash position.
10
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
Risks and Uncertainties — In the normal course of its business, Rithm Capital primarily encounters two significant types of economic risk: credit risk and market risk. Credit risk is the risk of default on Rithm Capital’s investments that results from a borrower’s or counterparty’s inability or unwillingness to make contractually required payments. Market risk reflects changes in the value of investments due to changes in prepayment rates, interest rates, spreads or other market factors, including risks that impact the value of the collateral underlying Rithm Capital’s investments. Taking into consideration these risks along with estimated prepayments, financings, collateral values, payment histories and other information, Rithm Capital believes that the carrying values of its investments are reasonable. Furthermore, for each of the periods presented, a significant portion of Rithm Capital’s assets are dependent on its servicers’ and subservicers’ abilities to perform their servicing obligations with respect to the residential mortgage loans underlying Rithm Capital’s Excess MSRs, MSRs, MSR financing receivables, servicer advance investments, RMBS issued by either public trusts or private label securitization (“PLS”) entities and loans. If a servicer or subservicer is terminated, Rithm Capital’s right to receive its portion of the cash flows related to interests in servicing related assets may also be terminated. The Company is also subject to significant tax risks. If the Company were to fail to qualify as a REIT in any taxable year, the Company would be subject to U.S. federal corporate income tax (including any applicable alternative minimum tax), which could be material. Unless entitled to relief under certain statutory provisions, the Company would also be disqualified from treatment as a REIT for the four taxable years following the year during which qualification is lost.
Use of Estimates — The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts in the consolidated financial statements and accompanying notes. Management believes that estimates utilized in preparation of the consolidated financial statements are reasonable. The most critical estimates include those related to fair value measurements of the Company’s assets and liabilities and the determination of whether or not to consolidate a VIE or a voting interest entity (“VOE”). Actual results could differ from those estimates and such differences could be material.
For the complete listing of the significant accounting policies, see Note 2 to the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Recent Accounting Pronouncements
Recently Adopted Accounting Standards
In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurements of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient to measure credit losses for current accounts receivable and current contract assets under FASB Accounting Standards Codification 606 - Revenues from Contracts with Customers. The practical expedient assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. The Company adopted this ASU on January 1, 2026 on a prospective basis and the adoption did not have a material impact on the Company’s consolidated financial statements.
Recently Issued Accounting Standards Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220-40), and in January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. This standard requires public companies to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The new standard, as clarified by ASU 2025-01, is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this ASU on its consolidated financial statements.
11
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity, which clarifies the guidance for identifying the accounting acquirer in business combinations effected primarily by exchanging equity interests when the legal acquiree is a VIE that meets the definition of a business. This ASU is effective for the Company on January 1, 2027, with early adoption permitted and is applied prospectively to acquisitions after the adoption date. The Company is currently evaluating the impact of the adoption of this ASU on its consolidated financial statements.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies interim disclosure requirements and the applicability of Topic 270. This ASU is effective for the Company on January 1, 2028, with early adoption permitted. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements.
3. BUSINESS COMBINATIONS AND ASSET ACQUISITIONS
Acquisition of Paramount Group, Inc.
The Company completed the acquisition of Elecor (f/k/a Paramount Group) on December 19, 2025 pursuant to the Agreement and Plan of Merger (including the schedules and exhibits thereto) (the “Elecor Acquisition”) for total consideration of approximately $1.8 billion, which includes transaction costs that were capitalized as part of the asset acquisition. The transaction was accounted for as an asset acquisition, whereby the total purchase price was allocated to the assets acquired and liabilities assumed based on their relative fair values on a pro-rata basis. No goodwill was recognized in connection with the acquisition.
Acquisition of Crestline Management, L.P.
The Company completed the acquisition of Crestline on December 1, 2025 pursuant to the Purchase and Sale Agreement (the “Crestline Acquisition”) as part of its strategy to expand its asset management capabilities by integrating Crestline’s private credit, fund liquidity and insurance and reinsurance strategies with the Company’s existing real estate and credit platforms. The Company accounted for this transaction using the acquisition method which requires, among other things, that the assets acquired and liabilities assumed be recognized at fair value as of the acquisition date.
Purchase Price Allocation
The following table summarizes the allocation of the total consideration paid to acquire the assets and assume the liabilities related to the Crestline Acquisition:
12
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
| Total Consideration | $ | |||||||
| Assets: | ||||||||
| Cash and cash equivalents | ||||||||
| Restricted cash | ||||||||
| Insurance company investments, at fair value | ||||||||
| Intangible assets | ||||||||
| Other assets | ||||||||
| Total Assets Acquired | ||||||||
| Liabilities: | ||||||||
| Interest sensitive insurance contract liabilities | ||||||||
| Accrued expenses and other liabilities | ||||||||
| Total Liabilities Assumed | ||||||||
| Net Assets | ||||||||
| Goodwill | $ | |||||||
The Company acquired 100 % of the outstanding equity interests of Crestline and certain affiliated companies for cash consideration of $324.7 million. The Company recognized goodwill of approximately $182.8 million primarily driven by the assembled workforce acquired in the Crestline Acquisition. Purchased goodwill is expected to be deductible for income tax purposes over 15 years. Rithm Capital will assess goodwill for impairment annually during the fourth quarter and in interim periods in case of events or circumstances that make it more likely than not that an impairment may have occurred.
The estimate of fair value of assets and liabilities required the use of significant assumptions and estimates. Critical estimates included, but were not limited to, future expected cash flows, including projected revenues and expenses, and the applicable discount rates. These estimates were based on assumptions that management believes to be reasonable; however, actual results may differ materially from these estimates. The Company’s assessment of fair value of assets acquired and liabilities assumed in connection with the Crestline Acquisition remains preliminary as of March 31, 2026 and is based on information that was available to management at the time the consolidated financial statements were prepared. Those estimates and assumptions are subject to change as management obtains additional information related to those estimates during the applicable measurement period. The measurement period will not exceed one year from the acquisition date of December 1, 2025. The most significant items for which the purchase price allocation remains open include intangible assets, other assets, deferred tax assets, other liabilities and goodwill. Measurement period adjustments, if any, will be recognized in the period in which they are determined, with a corresponding adjustment to goodwill. The final acquisition accounting adjustments, including those resulting from conforming Crestline’s accounting policies to those of the Company’s, could differ materially.
Intangible assets acquired consist of customer relationships, management contracts, trade names, insurance licenses and value of businesses acquired (“VOBA”). Rithm Capital amortizes finite-lived intangible assets on a straight-line basis over their respective useful lives. The following table presents the details of identifiable intangible assets acquired and the respective estimated useful lives:
| Estimated Useful Life (Years) | Amount | ||||||||||
| Customer relationships | $ | ||||||||||
| Management contracts | |||||||||||
| Trade names | |||||||||||
| VOBA | (A) | ||||||||||
| Insurance licenses | Indefinite | ||||||||||
| Total Identifiable Intangible Assets | $ | ||||||||||
(A)VOBA, an actuarial intangible asset arising from the Crestline Acquisition, is amortized on a basis consistent with the related policyholder liabilities over the remaining life of each contract.
13
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
Unaudited Supplemental Pro Forma Financial Information
The following table presents unaudited pro forma combined revenues and income before income taxes for the three months ended March 31, 2025, prepared as if the Crestline Acquisition had been consummated on January 1, 2024:
| Three Months Ended | ||||||||||||||||||||
| Pro Forma | March 31, 2025 | |||||||||||||||||||
| Revenues | $ | |||||||||||||||||||
| Income before income taxes | ||||||||||||||||||||
The unaudited supplemental pro forma financial information reflects, among other things, financing adjustments, amortization of intangibles and transaction costs. The unaudited supplemental pro forma financial information has not been adjusted to reflect all conforming accounting policies. The unaudited supplemental pro forma financial information does not include any anticipated synergies or other anticipated benefits of the Crestline Acquisition and, accordingly, the unaudited supplemental pro forma financial information is not necessarily indicative of either future results of operations or results that might have been achieved had the Crestline Acquisition occurred on January 1, 2024.
4. SEGMENT REPORTING
Rithm Capital conducts its business and generates substantially all of its revenues primarily in the U.S. through operating segments that have been aggregated into the following reportable segments : (i) Origination and Servicing, (ii) Residential Transitional Lending, (iii) Asset Management, (iv) Investment Portfolio and (v) Commercial Real Estate. Activities that are not directly attributable or not allocated to any of the reportable segments are reported under Corporate as a reconciling item to the Company’s consolidated financial statements. The activities within Corporate primarily consist of general, administrative and operating expenses, corporate cash and related interest income, the Senior Unsecured Notes (as defined in Note 17) and related interest expense and restricted cash and redeemable non-controlling interest related to Class A ordinary shares of Rithm Acquisition Corp., a special purpose acquisition company (the “SPAC”),which is consolidated by the Company.
During the first quarter of 2026, the Company reevaluated and revised the composition of its reportable segments based on changes in the financial information regularly provided to the Company’s chief operating decision maker (“CODM”) for purposes of assessing performance and allocating resources. CRE activities previously reflected within the Asset Management segment are now reflected within a new Commercial Real Estate segment. Prior-period segment information has been recast to conform to the current-period presentation.
The structure of the reportable segments is differentiated by the nature of the Company’s business activities, which is consistent with the reporting structure of the Company’s internal organization, as well as by the financial information used by the Company’s CODM to make decisions regarding the Company’s business, including resource allocation and performance assessment. The Company’s CODM is the Chief Executive Officer.
The Origination and Servicing segment generates revenue through servicing fee revenue, interest income and gain on originated and sold residential mortgage loans. The Residential Transitional Lending segment generates revenue through interest income related to the origination and management of a portfolio of short-term mortgage loans to fund the construction and development of, or investment in, residential properties. The Asset Management segment generates revenue primarily through management and incentive fees based primarily on assets under management (“AUM”) and performance of funds and accounts managed by the Company. The Investment Portfolio segment generates revenue from certain real estate securities, SFR properties, residential mortgage loans, consumer loans and certain ancillary and equity method investments primarily in the form of interest income and other investment portfolio revenues. The Commercial Real Estate segment generates revenue from rental revenue and real estate-related fee income from CRE properties owned and managed by the Company.
Income before income taxes is the measure of segment profit and loss that is determined in accordance with the measurement principles used in measuring the corresponding amounts in the consolidated financial statements and used by the CODM to evaluate segment results. It is also one of the factors considered in determining capital allocation among the segments, assessing performance for each segment and determining compensation for certain employees.
14
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
The following tables summarize segment financial information, including the Corporate category explained above, which in total reconciles to the same data for Rithm Capital on a consolidated basis:
| Origination and Servicing | Residential Transitional Lending | Asset Management | Investment Portfolio | Commercial Real Estate | Corporate Category | Total | ||||||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, 2026 | ||||||||||||||||||||||||||||||||||||||||||||
| Servicing fee revenue, net and interest income from MSRs and MSR financing receivables | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Change in fair value of MSRs and MSR financing receivables, net of economic hedges (includes realization of cash flows of $( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Servicing revenue, net | ||||||||||||||||||||||||||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||||||||||||||||||||
| Gain on originated residential mortgage loans, held-for-sale, net | ||||||||||||||||||||||||||||||||||||||||||||
| Asset management revenue | ||||||||||||||||||||||||||||||||||||||||||||
| Rental revenue | ||||||||||||||||||||||||||||||||||||||||||||
| Other revenue | ||||||||||||||||||||||||||||||||||||||||||||
| Total Revenue | ||||||||||||||||||||||||||||||||||||||||||||
| Interest expense and warehouse line fees | ||||||||||||||||||||||||||||||||||||||||||||
Other segment expenses(A) | ||||||||||||||||||||||||||||||||||||||||||||
| Compensation and benefits | ||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||||||||||||||||||||
| Total Operating Expenses | ||||||||||||||||||||||||||||||||||||||||||||
| Realized and unrealized gains (losses), net | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Other income, net | ||||||||||||||||||||||||||||||||||||||||||||
| Total Other Income (Loss) | ( | |||||||||||||||||||||||||||||||||||||||||||
| Income (Loss) before Income Taxes | $ | $ | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||
(A)The Origination and Servicing segment’s other segment expenses primarily include expenses related to legal and professional services, loan origination and servicing, information technology and property and maintenance. The Residential Transitional Lending segment’s other segment expenses primarily include expenses related to loan origination. The Asset Management segment’s other segment expenses primarily include expenses related to legal and professional services, information technology, occupancy and insurance business. The Investment Portfolio segment’s other segment expenses primarily include expenses related to legal and professional services, loan servicing and SFR property and maintenance. The Commercial Real Estate segment’s other segment expenses primarily include property operating expenses.
15
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
| Origination and Servicing | Residential Transitional Lending | Asset Management | Investment Portfolio | Commercial Real Estate | Corporate Category | Total | ||||||||||||||||||||||||||||||||||||||
| March 31, 2026 | ||||||||||||||||||||||||||||||||||||||||||||
Investments(A) | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Cash and cash equivalents(A) | ||||||||||||||||||||||||||||||||||||||||||||
Restricted cash(A) | ||||||||||||||||||||||||||||||||||||||||||||
Other assets(A) | ||||||||||||||||||||||||||||||||||||||||||||
| Goodwill | ||||||||||||||||||||||||||||||||||||||||||||
Assets of consolidated entities(A) | ||||||||||||||||||||||||||||||||||||||||||||
| Total Assets | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Debt(A) | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Other liabilities(A) | ||||||||||||||||||||||||||||||||||||||||||||
Liabilities of consolidated entities(A) | ||||||||||||||||||||||||||||||||||||||||||||
| Total Liabilities | ||||||||||||||||||||||||||||||||||||||||||||
| Redeemable Non-controlling Interests of Consolidated Subsidiaries | ||||||||||||||||||||||||||||||||||||||||||||
| Total Stockholders’ Equity | ( | |||||||||||||||||||||||||||||||||||||||||||
| Non-controlling interests in equity of consolidated subsidiaries | ||||||||||||||||||||||||||||||||||||||||||||
| Stockholders’ Equity in Rithm Capital Corp. | $ | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
| Investments in Equity Method Investees | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||
Total Assets(A) | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
(A)The Company's consolidated balance sheets include assets and liabilities of consolidated VIEs, including funds and CFEs that are presented separately within assets and liabilities of consolidated entities. VIE assets can only be used to settle obligations and liabilities of the VIEs. VIE creditors do not have recourse to Rithm Capital Corp.
16
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
| Origination and Servicing | Residential Transitional Lending | Asset Management | Investment Portfolio | Commercial Real Estate | Corporate Category | Total | ||||||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| Servicing fee revenue, net and interest income from MSRs and MSR financing receivables | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Change in fair value of MSRs and MSR financing receivables, net of economic hedges (includes realization of cash flows of $( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Servicing revenue, net | ||||||||||||||||||||||||||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||||||||||||||||||||
| Gain on originated residential mortgage loans, held-for-sale, net | ||||||||||||||||||||||||||||||||||||||||||||
| Asset management revenue | ||||||||||||||||||||||||||||||||||||||||||||
| Rental revenue | ||||||||||||||||||||||||||||||||||||||||||||
| Other revenue | ||||||||||||||||||||||||||||||||||||||||||||
| Total Revenue | ||||||||||||||||||||||||||||||||||||||||||||
| Interest expense and warehouse line fees | ||||||||||||||||||||||||||||||||||||||||||||
Other segment expenses(A) | ||||||||||||||||||||||||||||||||||||||||||||
| Compensation and benefits | ||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||||||||||||||||||||
| Total Operating Expenses | ||||||||||||||||||||||||||||||||||||||||||||
| Realized and unrealized gains (losses), net | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Other income (loss), net | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Total Other Income (Loss) | ( | |||||||||||||||||||||||||||||||||||||||||||
| Income (Loss) before Income Taxes | $ | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||
(A)The Origination and Servicing segment’s other segment expenses primarily include expenses related to loan origination and servicing, information technology, occupancy and legal and professional services. The Residential Transitional Lending segment’s other segment expenses primarily include expenses related to loan origination, occupancy and information technology. The Asset Management segment’s other segment expenses primarily include expenses related to legal and professional services, information technology and occupancy. The Investment Portfolio segment’s other segment expenses primarily include expenses related to loan servicing and SFR property and maintenance.
17
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
5. MORTGAGE SERVICING RIGHTS AND MSR FINANCING RECEIVABLES
The following table summarizes activity related to MSRs and MSR financing receivables:
| Balance at December 31, 2025 | $ | |||||||
| Acquisitions | ||||||||
Originations(A) | ||||||||
| Sales | ||||||||
| Change in Fair Value due to: | ||||||||
Realization of cash flows(B) | ( | |||||||
| Change in valuation inputs and assumptions | ||||||||
| Balance at March 31, 2026 | $ | |||||||
(A)Represents MSRs retained on the sale of originated residential mortgage loans. Includes $46.8 million of MSRs capitalized through co-issue with third parties for the three months ended March 31, 2026.
(B)Based on the paydown of the underlying residential mortgage loans.
The following table summarizes components of servicing revenue, net:
| Three Months Ended March 31, | |||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||
| Servicing fee revenue, net and interest income from MSRs and MSR financing receivables | $ | $ | |||||||||||||||||||||||||||
| Ancillary and other fees | |||||||||||||||||||||||||||||
| Servicing fee revenue, net and fees | |||||||||||||||||||||||||||||
| Change in Fair Value due to: | |||||||||||||||||||||||||||||
Realization of cash flows(A) | ( | ( | |||||||||||||||||||||||||||
Change in valuation inputs and assumptions, net of realized gains (losses)(B) | ( | ||||||||||||||||||||||||||||
| Gains (losses) on MSR economic hedges | ( | ||||||||||||||||||||||||||||
| Servicing Revenue, Net | $ | $ | |||||||||||||||||||||||||||
(A)Net of realization of cash flows related to MSR financing liability of $1.1 million and $1.2 million for the three months ended March 31, 2026 and 2025, respectively.
(B)Net of change in valuation inputs and assumptions related to MSR financing liability of $(4.1 ) million and $(4.8 ) million for the three months ended March 31, 2026 and 2025, respectively.
The following table summarizes MSRs and MSR financing receivables by type as of March 31, 2026 and December 31, 2025:
| Unpaid Principal Balance (“UPB”) of Underlying Mortgages | Weighted Average Life (Years)(A) | Carrying Value(B) | |||||||||||||||
| March 31, 2026 | |||||||||||||||||
| GSE | $ | $ | |||||||||||||||
| Non-Agency | |||||||||||||||||
| Ginnie Mae | |||||||||||||||||
| Total / Weighted Average | $ | $ | |||||||||||||||
| December 31, 2025 | |||||||||||||||||
| GSE | $ | $ | |||||||||||||||
| Non-Agency | |||||||||||||||||
| Ginnie Mae | |||||||||||||||||
| Total / Weighted Average | $ | $ | |||||||||||||||
(A)Represents the weighted average expected timing of the receipt of expected cash flows for this investment.
(B)Represents the fair value for this investment. As of March 31, 2026 and December 31, 2025, weighted average discount rates of 8.1 % (range of 7.6 % – 10.3 %) and 8.4 % (range of 8.0 % - 10.3 %), respectively, were used to value Rithm Capital’s MSRs and MSR financing receivables.
18
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
Residential Mortgage Loans Subject to Repurchase
Rithm Capital, through Newrez, is an approved issuer of Ginnie Mae mortgage-backed securities (“MBS”) and originates and securitizes government-insured residential mortgage loans. As the issuer of the Ginnie Mae guaranteed securitizations, Rithm Capital has the unilateral right to repurchase loans from the securitizations when they are delinquent for more than 90 days. Loans in forbearance that are three or more consecutive payments delinquent are included as delinquent loans permitted to be repurchased. As a result, once the delinquency criteria have been met and regardless of whether the repurchase option has been exercised, the Company recognizes delinquent loans as if they had been repurchased with a corresponding liability. As of March 31, 2026 and December 31, 2025, Rithm Capital reflected approximately $4.4 billion and $4.0 billion, respectively, in residential mortgage loans subject to repurchase and residential mortgage loan repurchase liability on its consolidated balance sheets. Rithm Capital may re-pool repurchased loans into new Ginnie Mae securitizations upon re-performance of the loan or otherwise sell to third-party investors. The Company does not change the accounting for MSRs related to previously sold loans upon re-recognizing loans eligible for repurchase. Rather, upon repurchase of a loan, the MSR is written off. As of March 31, 2026 and December 31, 2025, Rithm Capital held approximately $0.6 billion and $0.5 billion, respectively, of such repurchased loans, which are classified as held-for-sale (“HFS”) and are presented within residential mortgage loans on the consolidated balance sheets.
Onity MSR Financing Receivable Transactions
Onity Group Inc. (formerly known as Ocwen Financial Corporation), together with certain affiliates, and subsequently PHH Mortgage Corporation (“PHH”), entered into agreements with the Company to sell MSR-related assets, including certain rights to MSRs and other related assets. As of March 31, 2026, approximately $8.2 billion of underlying loan UPB associated with these sales has not received required consents and/or certain other conditions to transfer have not been met. The economics of the MSR-related assets are transferred through an interim arrangement until all required consents are obtained and other transfer conditions are satisfied. Accordingly, these amounts are presented as MSR financing receivables within mortgage servicing rights and MSR financing receivables, at fair value on the consolidated balance sheets.
Geographic Distributions
The table below summarizes the geographic distribution of the residential mortgage loans underlying the MSRs and MSR financing receivables:
| Percentage of Total Outstanding Unpaid Principal Amount | ||||||||||||||
| State Concentration | March 31, 2026 | December 31, 2025 | ||||||||||||
| California | % | % | ||||||||||||
| Florida | % | % | ||||||||||||
| Texas | % | % | ||||||||||||
| New York | % | % | ||||||||||||
| Washington | % | % | ||||||||||||
| New Jersey | % | % | ||||||||||||
| Virginia | % | % | ||||||||||||
| Maryland | % | % | ||||||||||||
| Georgia | % | % | ||||||||||||
| Illinois | % | % | ||||||||||||
| Other U.S. | % | % | ||||||||||||
| % | % | |||||||||||||
Geographic concentrations of investments expose Rithm Capital to the risk of economic downturns within the relevant states. Any such downturn in a state where Rithm Capital holds significant investments could affect the underlying borrower’s ability to make mortgage payments and therefore could have a meaningful, negative impact on the MSRs.
19
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
Residential Mortgage Loan Servicing and Subservicing
Newrez performs servicing of residential mortgage loans for unaffiliated parties under servicing agreements. The servicing agreements do not meet the criteria to be recognized as a servicing right asset and, therefore, are not recognized in the consolidated balance sheets. The UPB of residential mortgage loans serviced for others as of March 31, 2026 and December 31, 2025 was $242.6 billion and $242.8 billion, respectively. Rithm Capital earned servicing revenue of $87.0 million and $76.0 million for the three months ended March 31, 2026 and 2025, respectively, related to unaffiliated serviced loans presented within servicing revenue, net in the consolidated statements of operations.
In relation to certain owned MSRs, Rithm Capital engages unaffiliated licensed mortgage servicers as subservicers to perform the operational servicing duties, including recapture activities, in exchange for a subservicing fee, which is recognized as subservicing expense and presented in general, administrative and operating in the consolidated statements of operations. As of March 31, 2026, PHH and Valon Mortgage, Inc. subserviced 5.0 % and 3.6 % of owned MSRs, respectively, with the remaining 91.4 % of owned MSRs serviced by Newrez (Note 1).
Servicer Advances Receivable
In connection with Rithm Capital’s ownership of MSRs, the Company assumes the obligation to serve as a liquidity provider to initially fund servicer advances on the underlying pool of mortgages it services (Note 25). These servicer advances are recorded when advanced and are included in servicer advances receivable on the consolidated balance sheets.
The table below summarizes the type of advances included in the servicer advances receivable:
| March 31, 2026 | December 31, 2025 | |||||||||||||
| Principal and interest advances | $ | $ | ||||||||||||
| Escrow advances (taxes and insurance advances) | ||||||||||||||
| Foreclosure advances | ||||||||||||||
Gross advance balance(A)(B)(C) | ||||||||||||||
| Reserves, impairment, unamortized discount, net of recovery accruals | ( | ( | ||||||||||||
| Total Servicer Advances Receivable | $ | $ | ||||||||||||
(A)Includes $616.9 million and $738.7 million as of March 31, 2026 and December 31, 2025 of servicer advances receivable related to GSE MSRs, respectively, recoverable either from the borrower or the Agencies.
(B)Includes $557.4 million and $576.7 million as of March 31, 2026 and December 31, 2025 of servicer advances receivable related to Ginnie Mae MSRs, respectively, recoverable from either the borrower or Ginnie Mae.
(C)Expected losses for advances associated with loans in the MSR portfolio are considered in the MSR fair value through a non-reimbursable advance loss assumption.
Rithm Capital’s servicer advances receivable related to non-Agency MSRs generally have the highest reimbursement priority pursuant to the underlying servicing agreements (i.e., rank “top of the waterfall”), and Rithm Capital is generally entitled to repayment from the respective loan or REO liquidation proceeds before any interest or principal is paid on the notes issued by the trust. In most cases, advances in excess of the respective loan or REO liquidation proceeds may be recovered from pool-level proceeds. Furthermore, to the extent that advances are not recoverable by Rithm Capital as a result of the subservicer’s failure to comply with applicable requirements in the relevant servicing agreements, Rithm Capital has a contractual right to be reimbursed by the subservicer. For advances on loans that have been liquidated, sold, paid in full, modified or delinquent, the Company provisioned $123.7 million, or 4.1 %, and $121.5 million, or 3.8 %, for expected non-recovery of advances as of March 31, 2026 and December 31, 2025, respectively.
The following table summarizes servicer advances provision activity during the period:
| Balance at December 31, 2025 | $ | |||||||
| Provision | ||||||||
| Write-offs | ( | |||||||
| Balance at March 31, 2026 | $ | |||||||
20
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
6. GOVERNMENT AND GOVERNMENT-BACKED SECURITIES
Government and government-backed securities include Agency securities issued by the GSEs or Ginnie Mae and Treasury securities. The following table summarizes Agency and Treasury securities classified as available-for-sale (“AFS”) or designated at fair value under the FVO election:
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Outstanding Face Amount | Gross Unrealized | Number of Securities | Weighted Average | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gains | Losses | Carrying Value(A) | Coupon | Yield | Life (Years)(B) | Carrying Value(A) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Securities Designated as AFS: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Agency(C)(D) | $ | $ | $ | $ | % | % | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Securities Designated at FVO: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Agency(C) | ( | % | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total / Weighted Average | $ | $ | $ | ( | $ | % | % | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
(A)Carrying value is equal to the fair value for all securities. See Note 18 regarding the fair value measurements.
(B)Based on the timing of expected principal reduction on the underlying assets.
(C)All fixed-rate as of March 31, 2026 and December 31, 2025.
(D)Expected loss is realized through allowance for credit losses.
The following table summarizes Treasury securities classified as held-to-maturity (“HTM”):
| Weighted Average | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Outstanding Face Amount | Amortized Cost / Carrying Value | Fair Value(A) | Unrecognized Gains (Losses) | Number of Securities | Yield | Life (Years) | ||||||||||||||||||||||||||||||||||||||||||||
| Treasury Securities Designated as HTM: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| March 31, 2026 | $ | $ | $ | $ | % | |||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2025 | ( | % | ||||||||||||||||||||||||||||||||||||||||||||||||
(A)See Note 18 regarding the fair value measurements.
The following table summarizes purchases and sales of Agency and Treasury securities:
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Treasury | Agency | Treasury(A) | Agency | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Purchases: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Face | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Purchase price | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sales: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Face | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortized cost | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sale price | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gain (loss) on sale | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(A)Excludes Treasury short sales. Refer to Note 16 for information regarding short sales.
As of March 31, 2026, Rithm Capital had no unsettled government and government-backed securities trades.
See Note 17 regarding the financing of government and government-backed securities.
21
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
7. RESIDENTIAL MORTGAGE LOANS
Rithm Capital accumulates its residential mortgage loan portfolio through originations, bulk acquisitions and the execution of call rights. Substantially all of the residential mortgage loan portfolio is serviced by Newrez.
Loans are accounted for based on Rithm Capital’s strategy and management’s intent and on whether the loan was credit-impaired at the date of acquisition. As of March 31, 2026, Rithm Capital accounts for loans based on the following categories:
•Loans held-for-investment (“HFI”), at fair value
•Loans HFS, at lower of cost or fair value
•Loans HFS, at fair value
•Investments of consolidated CFEs represent mortgage loans held by certain mortgage securitization trusts where Rithm Capital is determined to be a primary beneficiary and, as a result, consolidates such trusts. The assets are measured based on the fair value of the more observable liabilities of such trusts under the CFE election. The obligations and liabilities of CFEs may only be satisfied with the assets of the respective consolidated CFEs, and creditors of the CFE do not have recourse to Rithm Capital Corp.
The following table summarizes residential mortgage loans outstanding by loan type:
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||
| Outstanding Face Amount | Carrying Value | Loan Count | Weighted Average Yield | Weighted Average Life (Years)(A) | Carrying Value | |||||||||||||||||||||||||||||||||
Investments of consolidated CFEs(B) | $ | $ | % | $ | ||||||||||||||||||||||||||||||||||
| Residential mortgage loans, HFI, at fair value | $ | $ | % | $ | ||||||||||||||||||||||||||||||||||
| Residential Mortgage Loans, HFS: | ||||||||||||||||||||||||||||||||||||||
| Acquired performing loans | % | |||||||||||||||||||||||||||||||||||||
Acquired non-performing loans(C) | % | |||||||||||||||||||||||||||||||||||||
| Residential mortgage loans, HFS | % | |||||||||||||||||||||||||||||||||||||
| Residential Mortgage Loans, HFS, at Fair Value: | ||||||||||||||||||||||||||||||||||||||
Acquired performing loans(D) | % | |||||||||||||||||||||||||||||||||||||
Acquired non-performing loans(C)(E) | % | |||||||||||||||||||||||||||||||||||||
| Originated loans | % | |||||||||||||||||||||||||||||||||||||
| Residential mortgage loans, HFS, at fair value | % | |||||||||||||||||||||||||||||||||||||
| Total Residential Mortgage Loans | $ | $ | $ | |||||||||||||||||||||||||||||||||||
(A)For loans classified as Level 3 in the fair value hierarchy, the weighted average life is based on the expected timing of the receipt of cash flows. For loans classified as Level 2 in the fair value hierarchy, the weighted average life is based on the contractual term of the loan.
(B)Residential mortgage loans of consolidated CFEs are classified as Level 2 in the fair value hierarchy and valued based on the fair value of the more observable financial liabilities under the CFE election.
(C)Loans are generally placed on non-accrual status when principal or interest is 90 days or more past due.
(D)Includes $216.8 million UPB of Ginnie Mae early buyout options.
(E)Includes $414.2 million UPB of Ginnie Mae early buyout options on accrual status as recovery of contractual cash flows are guaranteed by the FHA as of March 31, 2026.
See Note 17 regarding the financing of residential mortgage loans.
The following table summarizes the past due status and difference between the aggregate UPB and the aggregate carrying value of residential mortgage loans on the consolidated balance sheets:
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||
| Days Past Due | UPB | Carrying Value | Carrying Value Over (Under) UPB | UPB | Carrying Value | Carrying Value Over (Under) UPB | ||||||||||||||||||||||||||||||||
| Current | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| 90+ | ( | ( | ||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||
22
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
The following table summarizes the activity of residential mortgage loans on the consolidated balance sheets:
| Loans HFI, at Fair Value | Loans HFS, at Lower of Cost or Fair Value | Loans HFS, at Fair Value | Total | ||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | $ | |||||||||||||||||||
| Originations | |||||||||||||||||||||||
| Sales | ( | ( | |||||||||||||||||||||
| Purchases/additional fundings | |||||||||||||||||||||||
| Proceeds from repayments | ( | ( | ( | ( | |||||||||||||||||||
Net transfer of loans to/from other assets(A) | ( | ( | ( | ||||||||||||||||||||
| Transfer of loans to REO | ( | ( | ( | ( | |||||||||||||||||||
| Valuation (provision) reversal on loans | ( | ( | |||||||||||||||||||||
| Fair Value Adjustments due to: | |||||||||||||||||||||||
| Changes in instrument-specific credit risk | ( | ( | ( | ||||||||||||||||||||
| Other factors | ( | ( | ( | ||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | $ | |||||||||||||||||||
Gain on Originated Residential Mortgage Loans, HFS, Net
Newrez originates conventional, government-insured and non-conforming residential mortgage loans for sale and securitization. In connection with the sale or securitization of loans to the GSEs or mortgage investors, Rithm Capital recognizes gain on sale within gain on originated residential mortgage loans, HFS, net in the consolidated statements of operations. See Note 19 for further details on Rithm Capital’s continuing involvement in residential mortgage loan securitizations.
The following table summarizes the components of gain on originated residential mortgage loans, HFS, net:
| Three Months Ended March 31, | ||||||||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||||||||
Loss on residential mortgage loans originated and sold, net(A) | $ | ( | $ | ( | ||||||||||||||||||||||||||||
Gain (loss) on settlement of residential mortgage loan origination derivative instruments(B) | ( | |||||||||||||||||||||||||||||||
MSRs retained on transfer of residential mortgage loans(C) | ||||||||||||||||||||||||||||||||
Other(D) | ||||||||||||||||||||||||||||||||
| Realized gain on sale of originated residential mortgage loans, net | ||||||||||||||||||||||||||||||||
| Change in fair value of residential mortgage loans | ( | |||||||||||||||||||||||||||||||
Change in fair value of interest rate lock commitments (Note 16) | ( | |||||||||||||||||||||||||||||||
Change in fair value of derivative instruments (Note 16) | ( | |||||||||||||||||||||||||||||||
| Gain on Originated Residential Mortgage Loans, HFS, Net | $ | $ | ||||||||||||||||||||||||||||||
(A)Includes residential mortgage loan origination fees of $208.9 million and $197.6 million in the three months ended March 31, 2026 and 2025, respectively. Includes gain on residential mortgage loan securitizations accounted for as sales of $41.8 million and $15.4 million for the three months ended March 31, 2026 and 2025, respectively.
(B)Represents settlement of forward securities delivery commitments utilized as an economic hedge for mortgage loans not included within forward loan sale commitments.
(C)Represents the initial fair value of the capitalized MSRs upon loan sales with servicing retained.
(D)Includes fees for services associated with the residential mortgage loan origination process.
8. CONSUMER LOANS
Rithm Capital’s consumer loan portfolio consists of (i) consumer loans acquired from Upgrade, Inc. (the “Upgrade loans” or “Upgrade”), (ii) consumer loans acquired from Goldman Sachs Bank USA (the “Marcus loans” or “Marcus”) and (iii) consumer loans acquired from SpringCastle (the “SpringCastle loans” or “SpringCastle”).
23
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
The Upgrade portfolio includes fixed-rate consumer home improvement loans; the Marcus portfolio includes unsecured fixed-rate closed-end installment loans; and the SpringCastle portfolio includes open-end personal unsecured loans and personal homeowner loans. The Upgrade loans are serviced by Upgrade, the Marcus loans are serviced by Systems and Services Technologies, Inc. and the Company’s internal loan servicing business at Newrez, and the SpringCastle loans are serviced by OneMain Holdings Inc.
Pursuant to the forward flow agreement with Upgrade, entered into by the Company on July 31, 2025 (the “Effective Date”), Rithm Capital will purchase $1.0 billion UPB of consumer home improvement loans over the period from the Effective Date through the expiry on October 31, 2026. As of March 31, 2026, the Company has purchased $667.3 million UPB of loans under this agreement. Each individual purchase is at Rithm Capital’s discretion, prices are negotiated on a best efforts basis, and the Company’s obligation to acquire the loans is subject to certain conditions.
The Company has invested in SpringCastle loans with an aggregate of $128.6 million of unfunded and available revolving credit privileges as of March 31, 2026. However, under the terms of these loans, requests for draws may be denied and unfunded availability may be terminated at the Company’s discretion.
The following table summarizes characteristics of the consumer loan portfolio classified as HFI and measured at fair value under the fair value option election:
| UPB | Carrying Value | Weighted Average Coupon | Weighted Average Expected Life (Years) | ||||||||||||||||||||
| March 31, 2026 | |||||||||||||||||||||||
| SpringCastle | $ | $ | % | ||||||||||||||||||||
| Marcus | % | ||||||||||||||||||||||
| Upgrade | % | ||||||||||||||||||||||
| Total Consumer Loans | $ | $ | % | ||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
| SpringCastle | $ | $ | % | ||||||||||||||||||||
| Marcus | % | ||||||||||||||||||||||
| Upgrade | % | ||||||||||||||||||||||
| Total Consumer Loans | $ | $ | % | ||||||||||||||||||||
See Note 17 regarding the financing of consumer loans.
24
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
The following table summarizes the past due status and difference between the aggregate UPB and the aggregate carrying value of consumer loans:
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||
| Days Past Due | UPB | Carrying Value(A) | Carrying Value Over (Under) UPB | UPB | Carrying Value(A) | Carrying Value Over (Under) UPB | ||||||||||||||||||||||||||||||||
| SpringCastle: | ||||||||||||||||||||||||||||||||||||||
| Current | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| 90+ | ( | |||||||||||||||||||||||||||||||||||||
| Total SpringCastle | ||||||||||||||||||||||||||||||||||||||
| Marcus: | ||||||||||||||||||||||||||||||||||||||
| Current | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| 90+ | ( | ( | ||||||||||||||||||||||||||||||||||||
| Total Marcus | ( | ( | ||||||||||||||||||||||||||||||||||||
| Upgrade: | ||||||||||||||||||||||||||||||||||||||
| Current | $ | $ | $ | ( | $ | $ | $ | ( | ||||||||||||||||||||||||||||||
| 90+ | ( | ( | ||||||||||||||||||||||||||||||||||||
| Total Upgrade | ( | ( | ||||||||||||||||||||||||||||||||||||
| $ | $ | $ | ( | $ | $ | $ | ( | |||||||||||||||||||||||||||||||
(A)Consumer loans are carried at fair value. See Note 18 regarding fair value measurements.
The following table summarizes the activity for consumer loans for the period:
| Balance at December 31, 2025 | $ | |||||||
Additional fundings(A) | ||||||||
| Purchases | ||||||||
| Proceeds from repayments | ( | |||||||
| Accretion of loan discount and premium amortization, net | ||||||||
| Fair Value Adjustments due to: | ||||||||
| Changes in instrument-specific credit risk | ( | |||||||
| Other factors | ||||||||
| Balance at March 31, 2026 | $ | |||||||
(A)Represents draws on consumer loans with revolving privileges.
9. REAL ESTATE, NET
The following table presents the composition of real estate, net:
| March 31, 2026 | December 31, 2025 | |||||||||||||
| Commercial real estate | $ | $ | ||||||||||||
| Single-family rental properties | ||||||||||||||
| REO | ||||||||||||||
| Real Estate, Net | $ | $ | ||||||||||||
Commercial Real Estate
The Company owns and operates a portfolio of high-quality, Class A office properties in New York City and San Francisco, which are managed as part of the Company’s broader real estate platform. CRE properties are classified as HFI carried at cost less accumulated depreciation and any impairment and presented within real estate, net on the consolidated balance sheets.
25
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
The following table summarizes the net carrying value of CRE:
Depreciable Life (Years)(A) | March 31, 2026 | December 31, 2025 | |||||||||||||||
| Commercial Real Estate Tangible Assets: | |||||||||||||||||
| Land | N/A | $ | $ | ||||||||||||||
| Buildings and improvements | |||||||||||||||||
| Total commercial real estate tangible assets, at cost | |||||||||||||||||
| Accumulated depreciation | ( | ( | |||||||||||||||
| Total commercial real estate tangible assets, net | |||||||||||||||||
| Commercial Real Estate Intangible Assets: | |||||||||||||||||
| In-place leases | |||||||||||||||||
| Above-market leases | |||||||||||||||||
| Total commercial real estate intangible assets, gross | |||||||||||||||||
| In-place leases accumulated amortization | ( | ( | |||||||||||||||
| Above-market leases | ( | ( | |||||||||||||||
| Total accumulated amortization | ( | ( | |||||||||||||||
| Total commercial real estate intangible assets, net | |||||||||||||||||
| Commercial Real Estate, Net | $ | $ | |||||||||||||||
(A)The estimated useful lives of CRE intangible assets represents the weighted-average useful life.
Depreciation expense of CRE was $31.1 million for the three months ended March 31, 2026 and is presented in depreciation and amortization in the consolidated statements of operations. Amortization expense of lease intangible assets was $39.1 million for the three months ended March 31, 2026 and is presented in depreciation and amortization in the consolidated statements of operations, except as it relates to the amortization of above-market leases, which is included in rental revenue in the consolidated statements of operations.
The following table summarizes the activity for the period related to the net carrying value of CRE:
| Commercial Real Estate Tangible Assets | Commercial Real Estate Intangible Assets | Total Commercial Real Estate, Net | ||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | |||||||||||||||||
| Acquisitions and capital improvements | ||||||||||||||||||||
| Other | ||||||||||||||||||||
| Depreciation and amortization expense | ( | ( | ( | |||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | |||||||||||||||||
The Company leases office, retail and storage space to tenants, primarily under non-cancellable operating leases which generally have terms ranging from five to fifteen years . Most of the Company’s leases provide tenants with extension options at either fixed or market rates. A few of the Company’s leases provide tenants with options to terminate early, but such options generally impose an economic penalty on the tenant upon exercising.
26
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
The following table summarizes rental revenue and other variable revenue based on the specific lease terms presented in rental revenue on the consolidated statements of operations for the period:
| Three Months Ended March 31, | |||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||
| Rental revenue | $ | $ | |||||||||||||||||||||||||||
| Other variable revenue | |||||||||||||||||||||||||||||
| Total | $ | $ | |||||||||||||||||||||||||||
The following table summarizes the future minimum rental revenue under existing leases on CRE properties as of March 31, 2026:
| April 1 through December 31, 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| 2031 and thereafter | ||||||||
| Total | $ | |||||||
The following table summarizes the expected future amortization expense for lease intangible assets as of March 31, 2026:
| Year Ending | Amortization Expense | |||||||
| April 1 through December 31, 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| 2031 and thereafter | ||||||||
| $ | ||||||||
In connection with the Elecor Acquisition, the Company recognized intangible liabilities related to below-market leases, which are presented in accrued expenses and other liabilities in the consolidated balance sheets. See Note 14 for further details.
Single-Family Rental Properties
The Company manages a geographically diversified portfolio of high-quality SFR properties. The Company owns SFR properties classified as both HFI and HFS. SFR properties HFI are carried at cost less accumulated depreciation and impairment. SFR properties HFS are managed for near term sale and disposition and are measured at the lower of carrying value or fair value less estimated cost to sell and are not subject to depreciation. SFR properties HFI and HFS are presented within real estate, net on the consolidated balance sheets.
The following table summarizes the net carrying value of investments in SFR properties:
| March 31, 2026 | December 31, 2025 | ||||||||||
| Land | $ | $ | |||||||||
| Building | |||||||||||
| Capital improvements | |||||||||||
| Total gross investment in SFR properties | |||||||||||
| Accumulated depreciation | ( | ( | |||||||||
| Investment in SFR Properties, Net | $ | $ | |||||||||
Depreciation expense was $7.2 million and $7.4 million for the three months ended March 31, 2026 and 2025, respectively, and is presented in depreciation and amortization in the consolidated statements of operations.
27
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
The following table summarizes the activity for the period related to the net carrying value of investments in SFR properties:
| SFR Properties HFI | SFR Properties HFS | Total | ||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | |||||||||||||||||
| Acquisitions and capital improvements | ||||||||||||||||||||
| Transfers to (from) HFS/HFI | ( | |||||||||||||||||||
| Dispositions | ( | ( | ||||||||||||||||||
| Depreciation expense | ( | ( | ||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | |||||||||||||||||
Rithm Capital generally rents its SFR properties under non-cancelable lease agreements with a term of one to two years .
The following table summarizes rental revenue and other variable revenue presented in rental revenue and other income (loss), net, respectively, on the consolidated statements of operations based on the specific lease terms for the period:
| Three Months Ended March 31, | |||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||
| Rental revenue | $ | $ | |||||||||||||||||||||||||||
| Other variable revenue | |||||||||||||||||||||||||||||
| Total | $ | $ | |||||||||||||||||||||||||||
The following table summarizes the future minimum rental revenue under existing leases on SFR properties as of March 31, 2026:
| April 1 through December 31, 2026 | $ | |||||||
2027 and thereafter | ||||||||
| Total | $ | |||||||
The following table summarizes SFR portfolio activity for the period by number of properties:
| SFR Properties HFI | SFR Properties HFS | Total | ||||||||||||||||||
| Balance at December 31, 2025 | ||||||||||||||||||||
| Acquisition of SFR properties | ||||||||||||||||||||
| Transfer to (from) HFS/HFI | ( | |||||||||||||||||||
| Disposition of SFR properties | ( | ( | ||||||||||||||||||
| Balance at March 31, 2026 | ||||||||||||||||||||
See Note 17 regarding the financing of SFR properties.
10. RESIDENTIAL TRANSITION LOANS
The Company, through its wholly owned subsidiary, Genesis, specializes in originating and managing a portfolio of primarily short-term mortgage loans to fund the construction and development of, or investment in, residential properties.
28
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
The following table summarizes residential transition loans (“RTLs”), at fair value and RTLs held by consolidated entities by loan type:
Residential Transition Loans - Carrying Value(A) | Residential Transition Loans of Consolidated Entities - Carrying Value(A) | Total Carrying Value | % of Portfolio | Loan Count | % of Portfolio | Weighted Average Yield | Weighted Average Original Life (Months) | Weighted Average Committed Loan Balance to Value(B) | ||||||||||||||||||||||||||||||||||||||||||||||||
| March 31, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Construction | $ | $ | $ | % | % | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Bridge | % | % | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Renovation | % | % | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | % | % | % | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Construction | $ | $ | $ | % | % | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Bridge | % | % | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Renovation | % | % | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | % | % | % | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||
(A)RTLs are carried at fair value under the FVO election. Certain RTLs of consolidated entities, classified as CFEs, are valued based on the more observable financial liabilities of consolidated CFEs and are classified as Level 3. See Note 18 regarding fair value measurements.
(B)Weighted by commitment loan-to-value (“LTV”) for bridge loans, loan-to-cost and loan-to-after-repair-value for construction and renovation loans.
The following table summarizes the activity of loans included in residential transition loans, at fair value on the consolidated balance sheets:
| Balance at December 31, 2025 | $ | |||||||
| Purchases | ||||||||
| Initial loan advances | ||||||||
| Construction holdbacks and draws | ||||||||
| Repayments and sales | ( | |||||||
| Transfer of loans to REO | ( | |||||||
| Transfers to assets of consolidated entities | ( | |||||||
| Fair Value Adjustments due to: | ||||||||
| Changes in instrument-specific credit risk | ( | |||||||
| Other factors | ||||||||
| Balance at March 31, 2026 | $ | |||||||
The Company is subject to credit risk in connection with its investments in mortgage loans, including RTLs. The two primary components of credit risk are default risk, which is the risk that a borrower fails to make scheduled principal and interest payments, and severity risk, which is the risk of loss upon a borrower’s default on a mortgage loan or other secured or unsecured loan. Severity risk includes the risk of loss of value of the property or other asset, if any, securing the loan, as well as the risk of loss associated with taking over the property or other asset, if any, including foreclosure costs.
The following table summarizes the past due status and difference between the aggregate UPB and the aggregate carrying value of loans included in residential transition loans, at fair value on the consolidated balance sheets:
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||
| Days Past Due | UPB | Carrying Value | Carrying Value Over (Under) UPB | UPB | Carrying Value | Carrying Value Over (Under) UPB | ||||||||||||||||||||||||||||||||
| Current | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| 90+ | ( | ( | ||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
29
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
11. INSURANCE
Insurance company investments, at fair value
The following table presents the composition of insurance company investments, at fair value:
| March 31, 2026 | December 31, 2025 | |||||||||||||
| Securities | $ | $ | ||||||||||||
| Commercial mortgage loans | ||||||||||||||
| Private credit | ||||||||||||||
| Insurance Company Investments, at Fair Value | $ | $ | ||||||||||||
The following table summarizes the securities held by the insurance company at fair value:
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding Face Amount(C) | Gross Unrealized | Carrying Value(A) | Number of Securities | Weighted Average | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gains | Losses | Coupon | Yield | Life (Years)(B) | Carrying Value(A) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Securities Measured at FVO: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Asset-backed and mortgage-backed securities | $ | $ | $ | ( | $ | % | % | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate debt | ( | % | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Government and Agency securities | ( | % | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | ( | % | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total / Weighted Average | $ | $ | $ | ( | $ | % | % | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
(A)Carrying value is equal to the fair value for all securities. See Note 18 regarding the fair value measurements.
(B)Based on the timing of expected principal reduction on the underlying assets.
(C)Includes interest only securities for which no principal payment is expected.
The following table summarizes the commercial mortgage loans and private credit held by the insurance company at fair value:
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||
| Outstanding Face Amount | Carrying Value | Loan Count | Weighted Average Yield | Weighted Average Life (Years)(A) | Carrying Value | |||||||||||||||||||||||||||||||||
| Commercial mortgage loans, HFI, at fair value | $ | $ | % | $ | ||||||||||||||||||||||||||||||||||
| Private credit, at fair value | % | |||||||||||||||||||||||||||||||||||||
30
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
The following table summarizes the past due status and difference between the aggregate UPB and aggregate carrying value of commercial mortgage loans, HFI, at fair value on the consolidated balance sheets:
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||
| Days Past Due | UPB | Carrying Value | Carrying Value Over (Under) UPB | UPB | Carrying Value | Carrying Value Over (Under) UPB | ||||||||||||||||||||||||||||||||
| Current | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| 90+ | ( | ( | ||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||||||
The following table summarizes the activity of commercial mortgage loans, HFI, at fair value and private credit, at fair value for the period presented:
| Commercial Mortgage Loans, HFI, at Fair Value | Private Credit, at Fair Value | ||||||||||
Balance at December 31, 2025 | $ | $ | |||||||||
| Purchases | |||||||||||
| Paydowns | ( | ( | |||||||||
Other(A) | ( | ||||||||||
| Fair Value Adjustments due to: | |||||||||||
Other factors(B) | |||||||||||
Balance at March 31, 2026 | $ | $ | |||||||||
(A)Includes interest reserve used, payment-in-kind interest, foreign exchange (“FX”) adjustments and accretion.
(B)There were no fair value adjustments due to changes in instrument-specific credit risk in the current period.
Interest sensitive insurance contract liabilities
Interest sensitive insurance contract liabilities primarily include fixed indexed annuities (“FIAs”) and deferred annuities, including multi-year guaranteed annuities. The Company, through its wholly owned subsidiary, Crestline Life and Insurance Annuity Company (“CL Life”), also issues single premium immediate annuities, which provide fixed benefit payments commencing shortly after contract issuance.
The following represents a rollforward of the policyholder account balance by product within interest sensitive insurance contract liabilities. Where explicit policyholder account balances do not exist, the disaggregated rollforward represents the recorded reserve.
| Fixed Indexed Annuities | Deferred Annuities | |||||||||||||
| Balance as of December 31, 2025 | $ | $ | ||||||||||||
| Deposits | ||||||||||||||
| Policy charges | ||||||||||||||
| Surrenders and withdrawals | ( | ( | ||||||||||||
| Benefit payments | ( | ( | ||||||||||||
| Interest credited | ||||||||||||||
Balance as of March 31, 2026 | $ | $ | ||||||||||||
| Weighted average crediting rate | % | % | ||||||||||||
| Net amount at risk | $ | $ | ||||||||||||
| Cash surrender value | ||||||||||||||
31
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
The following is a reconciliation of interest sensitive insurance contract liabilities to the consolidated balance sheets:
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||
| Fixed indexed annuities | $ | $ | ||||||||||||||||||
| Deferred annuities | ||||||||||||||||||||
Other(A) | ||||||||||||||||||||
| Interest Sensitive Insurance Contract Liabilities | $ | $ | ||||||||||||||||||
(A)Primarily includes single premium immediate annuities.
The following presents policyholder account balances related to deferred annuity contracts by the applicable guaranteed minimum crediting rate and by range of the difference between rates being credited to policyholders and the respective guaranteed minimums:
| March 31, 2026 | ||||||||||||||||||||||||||||||||||||||||||||
| At Guaranteed Minimum | 1 Basis Point to 300 Basis Points Above Guaranteed Minimum | 301 Basis Points to 400 Basis Points Above Guaranteed Minimum | 401 Basis Points to 500 Basis Points Above Guaranteed Minimum | 501 Basis Points to 600 Basis Points Above Guaranteed Minimum | Greater than 600 Basis Points Above Guaranteed Minimum | Total | ||||||||||||||||||||||||||||||||||||||
| 1.0% | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| At Guaranteed Minimum | 1 Basis Point to 300 Basis Points Above Guaranteed Minimum | 301 Basis Points to 400 Basis Points Above Guaranteed Minimum | 401 Basis Points to 500 Basis Points Above Guaranteed Minimum | 501 Basis Points to 600 Basis Points Above Guaranteed Minimum | Greater than 600 Basis Points Above Guaranteed Minimum | Total | ||||||||||||||||||||||||||||||||||||||
| 1.0% | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Reinsurance Recoverable
The Company entered into a funds withheld coinsurance and modified coinsurance agreement with a special purpose reinsurer ceding 90% of its annuity business. Under the arrangement, the Company established a segregated account from the general investment portfolio in which the investments supporting the ceded obligations are maintained. The Company retains legal ownership of the investments supporting the ceded reserves and withholds investments equal to the ceded reserves. The reinsurer has a contractual claim on the funds withheld and is credited with investment returns in accordance with the terms of the agreement. Gross reinsurance recoverable and funds withheld obligations are recorded as a single net deposit position and are presented within other assets or accrued expenses and other liabilities, as applicable (Note 13).
12. CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Rithm Capital considers all highly liquid short-term investments with maturities of 90 days or less when purchased to be cash equivalents. Substantially all amounts on deposit with major financial institutions exceed federally insured deposit limits.
Restricted cash consists of cash collateral pledges related to secured financing and securitizations, amounts restricted or escrowed under loan agreements for debt service, real estate taxes, property insurance and capital improvements, security deposits held on behalf of tenants, lease obligations and cash proceeds held in a trust account from the initial public offering (“IPO”) of the SPAC that can only be used for purposes of completing an initial business combination or redemption of the SPAC’s Class A ordinary shares as set forth in the SPAC trust agreement.
32
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported on the Company’s consolidated balance sheets to the total of the same amounts presented in the consolidated statements of cash flows:
| March 31, 2026 | December 31, 2025 | ||||||||||
Cash and cash equivalents | $ | $ | |||||||||
| Restricted Cash: | |||||||||||
| Restricted cash | |||||||||||
Restricted cash of consolidated entities(A) | |||||||||||
| Total restricted cash | |||||||||||
| Total Cash, Cash Equivalents and Restricted Cash | $ | $ | |||||||||
The following table summarizes restricted cash balances by reporting segment including corporate category:
| March 31, 2026 | December 31, 2025 | ||||||||||
Investment Portfolio(A) | $ | $ | |||||||||
| Origination and Servicing | |||||||||||
Residential Transitional Lending(A) | |||||||||||
Asset Management(A) | |||||||||||
| Commercial Real Estate | |||||||||||
Corporate Category(B) | |||||||||||
| Total Restricted Cash | $ | $ | |||||||||
(A)Includes restricted cash related to consolidated entities presented within investments, at fair value and other assets on the consolidated balance sheets.
(B)Restricted cash in the corporate category primarily relates to cash held in a trust account related to the Company’s consolidated SPAC.
33
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
13. OTHER ASSETS AND LIABILITIES
Other assets and accrued expenses and other liabilities — other assets and accrued expenses and other liabilities on the consolidated balance sheets consist of the following:
| Other Assets | Accrued Expenses and Other Liabilities | ||||||||||||||||||||||||||||
| March 31, 2026 | December 31, 2025 | March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||||||
| Collateralized loan obligations (“CLOs”), at fair value | $ | $ | Accounts payable | $ | $ | ||||||||||||||||||||||||
Derivative and hedging assets (Note 16) | Accrued compensation and benefits | ||||||||||||||||||||||||||||
| Deferred tax asset | Net deferred tax liability | ||||||||||||||||||||||||||||
| Due from related parties | Derivative and hedging liabilities (Note 16) | ||||||||||||||||||||||||||||
Equity investments(A) | Due to affiliates | ||||||||||||||||||||||||||||
Excess MSRs, at fair value | Escheat payable | ||||||||||||||||||||||||||||
Goodwill (Note 14) | MSR financing liability, at fair value | ||||||||||||||||||||||||||||
| Income and fees receivable | Interest payable | ||||||||||||||||||||||||||||
Intangible assets, net (Note 14) | Intangible liabilities, net (Note 14) | ||||||||||||||||||||||||||||
Loans receivable, at fair value(B) | Lease liability (Note 15) | ||||||||||||||||||||||||||||
Margin receivable, net(C) | Notes receivable financing liability(E) | ||||||||||||||||||||||||||||
| Non-Agency securities, at fair value | Open trades payable | ||||||||||||||||||||||||||||
Notes receivable, at fair value(D) | RTL financing liability, at fair value | ||||||||||||||||||||||||||||
Operating lease ROU assets (Note 15) | Unearned income and fees | ||||||||||||||||||||||||||||
| Other receivables | Deposit liability(F) | ||||||||||||||||||||||||||||
| Prepaid expenses | Other liabilities | ||||||||||||||||||||||||||||
| Principal and interest receivable | $ | $ | |||||||||||||||||||||||||||
| Property and equipment | |||||||||||||||||||||||||||||
Servicer advance investments, at fair value | |||||||||||||||||||||||||||||
| Servicing fee receivables | |||||||||||||||||||||||||||||
| Warrants, at fair value | |||||||||||||||||||||||||||||
| Other assets | |||||||||||||||||||||||||||||
| $ | $ | ||||||||||||||||||||||||||||
(A)Includes equity investments in (i) certain real estate joint ventures and redevelopment projects, (ii) various real estate services operating companies, (iii) funds managed by the Company, (iv) the Credit Risk Transfer LLC (as defined in Note 18) that holds exposure in residential mortgage loan warehouse lines (measured at fair value under the FVO election), (v) Rithm Property Trust common and preferred securities, (vi) Newrez Joint Ventures (as defined in Note 19) and (vii) Adoor Property Management LLC (“APM”).
(B)The Company’s loans receivable are measured at fair value under the FVO election.
(C)Represents collateral posted as a result of changes in the fair value of Rithm Capital’s (i) government and government-backed securities securing its secured financing agreements and (ii) derivative instruments.
(D)Represents notes receivable secured by commercial properties. The notes are measured at fair value under the FVO election.
(E)Includes a secured borrowing with an UPB of $371.4 million resulting from a transaction that did not qualify for sale accounting under ASC 860, for which the Company has elected the FVO.
(F)The Company entered into a funds withheld coinsurance and modified coinsurance agreement with a special purpose reinsurer ceding 90% of its annuity business. Amounts due to and from the reinsurer, including deposit-accounted reinsurance balances and funds-withheld obligations, are recorded on a net basis and a single net deposit position is presented within other assets or other liabilities, as applicable. As of March 31, 2026, the gross reinsurance recoverable asset and funds-withheld obligations were $916.9 million and $954.1 million, respectively, and are presented as a net deposit liability in the table above. As of December 31, 2025, the gross reinsurance recoverable asset and funds-withheld obligations were $826.0 million and $860.8 million, respectively, and are presented as a net deposit liability in the table above.
34
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
Notes and Loans Receivable — The following table summarizes the activity for the period for notes and loans receivable:
| Notes Receivable | Loans Receivable | Total | |||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | ||||||||||||||
| Fundings | |||||||||||||||||
| Payment in kind | |||||||||||||||||
| Fair Value Adjustments due to: | |||||||||||||||||
Other factors(A) | |||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | ||||||||||||||
(A)There were no fair value adjustments due to changes in instrument-specific credit risk in the current period.
The following table summarizes the past due status and difference between the aggregate UPB and the aggregate carrying value of notes and loans receivable:
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||
| Days Past Due | UPB | Carrying Value(A) | Carrying Value Under UPB | UPB | Carrying Value(A) | Carrying Value Under UPB | ||||||||||||||||||||||||||||||||
| Current | $ | $ | $ | ( | $ | $ | $ | ( | ||||||||||||||||||||||||||||||
| 90+ | ( | ( | ||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | ( | $ | $ | $ | ( | ||||||||||||||||||||||||||||||
(A)Notes and loans receivable are carried at fair value. See Note 18 regarding fair value measurements.
14. GOODWILL AND INTANGIBLE ASSETS
As a result of acquisitions, the Company recognized intangible assets in the form of management contracts, customer relationships, purchased technology, trademarks and trade names, licenses and VOBA. The Company also recognized goodwill on certain acquisitions. Goodwill and intangible assets are presented within other assets on the consolidated balance sheets, except for in-place lease and above-market lease intangible assets, which are presented within real estate, net on the consolidated balance sheets.
The following table summarizes the carrying value of goodwill by reportable segment:
| Origination and Servicing | Residential Transitional Lending | Asset Management | Total | |||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | $ | ||||||||||||||||||||||
| Impairment loss | ||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | $ | ||||||||||||||||||||||
35
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
Intangible Assets
The following table summarizes the acquired identifiable intangible assets:
| Estimated Useful Lives (Years) | March 31, 2026 | December 31, 2025 | |||||||||||||||
| Gross Intangible Assets: | |||||||||||||||||
| Management contracts | $ | $ | |||||||||||||||
| Customer relationships | |||||||||||||||||
| Purchased technology | |||||||||||||||||
Trademarks / Trade names(A) | |||||||||||||||||
VOBA(B) | (B) | ||||||||||||||||
| Licenses | Indefinite | ||||||||||||||||
| Accumulated Amortization: | |||||||||||||||||
| Management contracts | |||||||||||||||||
| Customer relationships | |||||||||||||||||
| Purchased technology | |||||||||||||||||
| Trademarks / Trade names | |||||||||||||||||
| VOBA | |||||||||||||||||
| Intangible Assets, Net: | |||||||||||||||||
| Management contracts | |||||||||||||||||
| Customer relationships | |||||||||||||||||
| Purchased technology | |||||||||||||||||
Trademarks / Trade names(A) | |||||||||||||||||
VOBA(B) | |||||||||||||||||
| Licenses | |||||||||||||||||
| Intangible Assets, Net | $ | $ | |||||||||||||||
(A)Includes indefinite-lived intangible assets of $1.9
(B)VOBA, an actuarial intangible asset arising from the Crestline Acquisition, is amortized on a basis consistent with the related policyholder liabilities over the remaining life of each contract.
The Company did no
The following table summarizes the amortization expense recorded by the Company related to the intangible assets included in the table above. Amortization expense related to intangible assets is included in general, administrative and operating in the consolidated statements of operations.
| Three Months Ended March 31, | ||||||||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||||||||
| Amortization expense | $ | $ | ||||||||||||||||||||||||||||||
The following table summarizes the expected future amortization expense for intangible assets as of March 31, 2026:
| Year Ending | Amortization Expense | |||||||
| April 1 through December 31, 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| 2031 and thereafter | ||||||||
| $ | ||||||||
36
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
Intangible Liabilities
The following table summarizes the acquired identifiable intangible liabilities recognized as a result of the Elecor Acquisition, which are presented within accrued expenses and other liabilities in the consolidated balance sheets:
| Weighted-Average Useful Lives (Years) | March 31, 2026 | December 31, 2025 | |||||||||||||||
| Below-market leases | $ | $ | |||||||||||||||
| Accumulated amortization | |||||||||||||||||
| Intangible Liabilities, Net | $ | $ | |||||||||||||||
The following table summarizes the amortization expense recorded by the Company related to its intangible liabilities. Amortization related to below-market leases is recognized in rental revenue in the consolidated statements of operations.
| Three Months Ended March 31, | ||||||||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||||||||
| Amortization expense | $ | $ | ||||||||||||||||||||||||||||||
The following table summarizes the expected future amortization for intangible liabilities as of March 31, 2026:
| Year Ending | Amortization | |||||||
| April 1 through December 31, 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| 2031 and thereafter | ||||||||
| $ | ||||||||
In connection with the Elecor Acquisition, the Company recognized intangible assets related to in-place leases and above-market leases, which are presented in real estate, net in the consolidated balance sheets. See Note 9 for further details.
15. LEASES
Rithm Capital, through its wholly owned subsidiaries, has non-cancelable operating leases on office space and data centers expiring through 2035, and a non-cancelable operating ground lease expiring in 2075. Rent expense, net of sublease income, totaled $8.6 million and $7.3 million for the three months ended March 31, 2026 and 2025, respectively. The Company has leases that include renewal options and escalation clauses. The terms of the leases do not impose any financial restrictions or covenants.
Operating lease right-of-use (“ROU”) assets represent the right to use an underlying assets for the lease term and lease liabilities represent obligations to make lease payments arising from the leases. In addition, the Company has finance leases for computer hardware. As of March 31, 2026, the Company has pledged collateral related to its lease obligations of $7.6 million, which is presented as part of restricted cash on the consolidated balance sheets. Operating lease ROU assets and lease liabilities are presented as part of other assets and accrued expenses and other liabilities, respectively, on the consolidated balance sheets (Note 13).
37
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
The table below summarizes the future commitments under the non-cancelable leases:
| Year Ending | Operating Leases | Finance Leases | Total | |||||||||||||||||
| April 1 through December 31, 2026 | $ | $ | $ | |||||||||||||||||
| 2027 | ||||||||||||||||||||
| 2028 | ||||||||||||||||||||
| 2029 | ||||||||||||||||||||
| 2030 | ||||||||||||||||||||
| 2031 and thereafter | ||||||||||||||||||||
| Total remaining undiscounted lease payments | ||||||||||||||||||||
| Less: imputed interest | ||||||||||||||||||||
| Total Remaining Discounted Lease Payments | $ | $ | $ | |||||||||||||||||
The future commitments under the non-cancelable leases have not been reduced by the sublease rentals of $23.7 million due in the future periods.
Other information related to leases is summarized below:
| March 31, 2026 | December 31, 2025 | ||||||||||
| Weighted Average Remaining Lease Term (Years): | |||||||||||
| Operating leases | |||||||||||
| Finance leases | |||||||||||
| Weighted Average Discount Rate: | |||||||||||
| Operating leases | % | % | |||||||||
| Finance leases | % | % | |||||||||
| Three Months Ended March 31, | ||||||||||||||||||||
| Supplemental Information | 2026 | 2025 | ||||||||||||||||||
| Cash Paid for Amounts Included in the Measurement of Lease Liabilities: | ||||||||||||||||||||
| Operating cash flows - operating leases | $ | $ | ||||||||||||||||||
| Operating cash flows - finance leases | ||||||||||||||||||||
| Finance cash flows - finance leases | ||||||||||||||||||||
| Supplemental Non-Cash Information on Lease Liabilities Arising from Obtaining ROU Assets: | ||||||||||||||||||||
| ROU assets obtained in exchange for new operating lease liabilities | $ | $ | ||||||||||||||||||
16. DERIVATIVES AND HEDGING
The Company enters into economic hedges including interest rate swaps, to-be-announced forward contract positions (“TBAs”) and futures to hedge a portion of its interest rate risk exposure. Interest rate risk is sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations, as well as other factors. Rithm Capital’s credit risk with respect to economic hedges is the risk of default on Rithm Capital’s investments that results from a borrower’s or counterparty’s inability or unwillingness to make contractually required payments.
The Company may at times hold TBAs in order to mitigate Rithm Capital’s interest rate risk on certain specified MBS and MSRs. Amounts or obligations owed by or to Rithm Capital are subject to the right of set-off with the counterparty. As part of executing these trades, Rithm Capital may enter into agreements with its counterparties that govern the transactions for the purchases or sales made, including margin maintenance, payment and transfer, events of default, settlements and various other provisions. Changes in the value of economic hedges designed to protect against MBS and MSR fair value fluctuations, or hedging gains and losses, are reflected in the tables below.
38
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
As of March 31, 2026, the Company also held interest rate lock commitments (“IRLCs”), which represent a commitment to a particular interest rate provided the borrower is able to close the loan within a specified period, and forward loan sale and securities delivery commitments, which represent a commitment to sell specific residential mortgage loans at prices which are fixed as of the forward commitment date. Rithm Capital enters into forward loan sale and securities delivery commitments in order to hedge the exposure related to IRLCs and residential mortgage loans that are not covered by residential mortgage loan sale commitments.
Derivatives and other economic hedging instruments are recorded at fair value and presented in other assets or accrued expenses and other liabilities on the consolidated balance sheets, as follows:
| March 31, 2026 | December 31, 2025 | |||||||||||||
| Derivative and Hedging Assets: | ||||||||||||||
Interest rate swaps and futures(A) | $ | $ | ||||||||||||
| IRLCs | ||||||||||||||
| TBAs | ||||||||||||||
Embedded derivatives(B) | ||||||||||||||
| Foreign exchange forwards | ||||||||||||||
Other commitments(C) | ||||||||||||||
| $ | $ | |||||||||||||
| Derivative and Hedging Liabilities: | ||||||||||||||
| IRLCs | $ | $ | ||||||||||||
| TBAs | ||||||||||||||
Other commitments(D) | ||||||||||||||
| Stock options | ||||||||||||||
| Foreign exchange forwards | ||||||||||||||
Embedded derivatives(B) | ||||||||||||||
| $ | $ | |||||||||||||
(A)Net of $179.8 million and $34.7 million of related variation margin accounts as of March 31, 2026 and December 31, 2025, respectively.
(B)Embedded derivatives include (i) modified coinsurance and funds withheld arrangement that require the Company to pay the total return on the assets supporting the funds withheld liability and (ii) index linked crediting features embedded in the FIAs or reinsurance deposit asset.
(C)Refers to a reinsurance agreement, between CL Life and New Reinsurance Company Ltd., to economically hedge the equity option features embedded in the FIA products.
(D)Relates to (i) an agreement, classified as a derivative, with an affiliate, which could result in the Company’s subsidiary being required to make a payment under certain circumstances dependent upon amounts realized from an investment of the affiliate, subject to a maximum amount of $25.5 million and (ii) a consolidated joint venture with a third party to invest in an affiliated fund that is subject to a redemption right after a certain period and is separately accounted for as a derivative.
The following table summarizes notional amounts related to derivatives and other hedging instruments:
| March 31, 2026 | December 31, 2025 | ||||||||||
Interest rate swaps(A) | $ | $ | |||||||||
Interest rate futures(B) | |||||||||||
| IRLCs | |||||||||||
TBAs(C) | |||||||||||
| Other commitments | |||||||||||
Embedded derivatives(D) | |||||||||||
| Foreign exchange forwards | |||||||||||
(A)Includes $0.1 billion notional of pay fixed of 3.4 %/pay Secured Overnight Financing Rate (“SOFR”) with a weighted average maturity of 36 months, as of March 31, 2026. Includes $2.2 billion notional of receive fixed of 3.4 %/pay SOFR with a weighted average maturity of 15 months as of December 31, 2025.
(B)Represents $20.4 billion notional of Eris SOFR swap futures with weighted average maturities of 46 months that replicate cash flows of receive fixed/pay SOFR interest rate swaps as of March 31, 2026. Represents a $14.5 billion notional Eris SOFR swap future with weighted average maturity of 44 months that replicates cash flows of receive fixed/pay SOFR interest rate swaps as of December 31, 2025.
(C)Represents the notional amount of Agency RMBS classified as derivatives.
(D)Represents $962.5 million associated with ceded reserves, $34.0 million associated with FIA contracts and $954.1 million associated with funds withheld arrangements as of March 31, 2026. Represents $865.8 million associated with ceded reserves, $26.4 million associated with FIA contracts and $860.8 million associated with funds withheld arrangements as of December 31, 2025.
39
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
The following table summarizes gain (loss) on derivatives and other hedging instruments and the related presentation on the consolidated statements of operations:
| Three Months Ended March 31, | |||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||
| Servicing Revenue, Net: | |||||||||||||||||||||||||||||
| TBAs | $ | ( | $ | ||||||||||||||||||||||||||
| Interest rate swaps | ( | ( | |||||||||||||||||||||||||||
| Interest rate futures | ( | ||||||||||||||||||||||||||||
| ( | |||||||||||||||||||||||||||||
Gain (Loss) on Originated Residential Mortgage Loans, HFS, Net(A): | |||||||||||||||||||||||||||||
| IRLCs | ( | ||||||||||||||||||||||||||||
| TBAs | ( | ||||||||||||||||||||||||||||
| ( | |||||||||||||||||||||||||||||
Realized and Unrealized Gains (Losses), Net(B): | |||||||||||||||||||||||||||||
| Interest rate swaps | ( | ||||||||||||||||||||||||||||
| Stock options | ( | ||||||||||||||||||||||||||||
Embedded derivatives(C) | ( | ||||||||||||||||||||||||||||
| Foreign exchange forwards | ( | ( | |||||||||||||||||||||||||||
| ( | |||||||||||||||||||||||||||||
| Total Gain (Loss) | $ | ( | $ | ||||||||||||||||||||||||||
(A)Represents unrealized gain (loss).
(B)Excludes $41.3 million loss and $12.8 million gain for the three months ended March 31, 2026 and 2025, respectively, reflected as gain (loss) on settlement of residential mortgage loan origination derivative instruments presented within gain on originated residential mortgage loans, HFS, net (Note 7) in the consolidated statements of operations.
40
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
17. DEBT OBLIGATIONS
The following table summarizes secured financing agreements, secured notes, bonds payable and notes payable and other liabilities of consolidated entities:
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Collateral | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Obligations/Collateral(C) | Outstanding Face Amount | Carrying Value(A) | Final Stated Maturity(B) | Weighted Average Funding Cost | Weighted Average Life (Years) | Outstanding Face | Amortized Cost Basis | Carrying Value | Weighted Average Life (Years) | Carrying Value(A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Secured Financing Agreements: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warehouse credit facilities - residential mortgage loans(D) | $ | $ | Apr-26 to Mar-28 | % | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warehouse credit facilities - RTLs(E) | Jul-26 to Mar-28 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Government and government-backed securities(G) | Apr-26 to Dec-26 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-Agency securities(D) | Apr-26 to Oct-27 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jupiter(F) | Dec-26 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Excess MSRs(E) | Sep-26 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CLOs(E) | Jan-30 to Jul-39 | % | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real estate(E) | May-26 to Mar-28 | % | N/A | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total secured financing agreements | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Secured Notes and Bonds Payable: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MSRs(H) | Jul-26 to Nov-31 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Servicer advance investments(I) | Oct-27 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Servicer advances(I) | May-26 to Jun-29 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer loans(J) | Oct-26 to Sep-37 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real estate(K) | Jun-26 to Aug-30 | % | N/A | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RTLs(L) | Jul-26 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other investments(E) | Feb-30 | % | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CLOs(E) | Jul-30 | % | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total secured notes and bonds payable | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Payable and Secured Financing of Consolidated Entities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated funds(M) | Aug-27 to Jan-38 | % | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgage loans | Mar-41 to Feb-56 | % | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RTLs | Mar-39 to Sep-39 | % | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total notes payable and secured financing of consolidated entities | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total / Weighted Average | $ | $ | % | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(A)Net of deferred financing costs.
(B)Debt obligations with a stated maturity through the date of issuance of the consolidated financial statements were refinanced, extended or repaid.
(C)Associated with accrued interest payable of approximately $90.6 million and $119.4 million as of March 31, 2026 and December 31, 2025, respectively.
(D)Based on SOFR interest rates. Includes repurchase agreements and related collateral on non-Agency securities retained through consolidated securitizations.
(E)All SOFR- or Euro Interbank Offered Rate (EURIBOR)-based floating interest rates.
(F)Refers to a repurchase agreement with an interest equal to the sum of (i) a floating rate equal to SOFR and (ii) a margin of 2.8 %.
(G)Repurchase agreements are based on a fixed-rate. Collateral carrying value includes margin deposits.
(H)Includes $5.7 billion of MSR notes with an interest equal to the sum of (i) a floating rate index equal to SOFR and (ii) a margin ranging from 2.5 % to 3.8 %; and $1.3 billion of MSR notes with fixed interest rates ranging 3.1 % to 7.4 %. The outstanding face amount of the collateral represents the UPB of the residential mortgage loans underlying the MSRs and MSR financing receivables securing these notes.
(I)Includes $1.5 billion of debt with an interest rate equal to the sum of (i) a floating rate index equal to SOFR and (ii) a margin ranging from 1.5 % to 2.8 %; and $1.0 billion of debt with fixed interest rates ranging from 3.9 % to 5.3 %. Collateral includes servicer advance investments, as well as servicer advances receivable related to the MSRs and MSR financing receivables owned by NRM and Newrez.
(J)Includes (i) SpringCastle debt, which is primarily composed of the following classes of asset-backed notes held by third parties: $97.8 million UPB of Class A notes with a coupon of 2.0 % and $53.0 million UPB of Class B notes with a coupon of 2.7 %, (ii) $100.1 million of debt collateralized by the Marcus loans with an interest rate of SOFR plus a margin of 2.4 % and (iii) $450.3 million of debt collateralized by the Upgrade loans with an interest rate of SOFR plus a margin of 1.6 %.
(K)Includes $4.6 billion of fixed rate notes which bear interest ranging from 3.0 % to 6.7 %.
(L)Includes a fixed rate note which bears interest of 5.8 %.
(M)Includes notes payable of consolidated CLOs and of a structured alternative investment solution. Weighted average rate is the effective rate for the senior notes with stated coupon rates. The subordinate notes with UPB of $32.0 million do not have a stated rate of interest. Weighted average life of a structured alternative investment solution is based on expected maturity.
41
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
General
Certain of the debt obligations included above are obligations of Rithm Capital’s consolidated subsidiaries, which own the related collateral. In some cases, such collateral is not available to other creditors of Rithm Capital Corp. The obligations and liabilities of VIEs may only be satisfied with the assets of the respective consolidated VIEs, and creditors of the VIE do not have recourse to Rithm Capital Corp.
As of March 31, 2026, Rithm Capital has margin exposure on $13.9 billion of secured financing agreements. To the extent that the value of the collateral underlying these secured financing agreements declines below the collateral margin trigger, Rithm Capital may be required to post margin, which could significantly impact its liquidity.
The following table summarizes activities related to the carrying value of secured debt obligations for the period:
Servicer Advances and Excess MSRs(A) | MSRs | Government and Government-Backed and Other Securities | Residential Mortgage Loans | Consumer Loans | Real Estate, Net | RTLs | Asset Management, CLOs and Consolidated Funds | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Secured Financing Agreements: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Borrowings | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repayments | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| FX remeasurement | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Capitalized deferred financing costs, net of amortization | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Secured Notes and Bonds Payable: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Borrowings | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repayments | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| FX remeasurement | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unrealized gain on notes, fair value | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Capitalized deferred financing costs, net of amortization | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Payable and Secured Financing of Consolidated Entities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deconsolidation of VIEs | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Borrowings | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repayments | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unrealized (gain) loss on notes, fair value | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Capitalized deferred financing costs, net of amortization | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
(A)Rithm Capital net settles daily borrowings and repayments of the secured notes and bonds payable on its servicer advances.
42
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
Maturities
Contractual maturities of debt obligations, including the Senior Unsecured Notes (as defined below), as of March 31, 2026 are as follows:
| Year Ending | Non-recourse(A) | Recourse(B) | Total | |||||||||||||||||
| April 1 through December 31, 2026 | $ | $ | $ | |||||||||||||||||
| 2027 | ||||||||||||||||||||
| 2028 | ||||||||||||||||||||
| 2029 | ||||||||||||||||||||
| 2030 | ||||||||||||||||||||
| 2031 and thereafter | ||||||||||||||||||||
| $ | $ | $ | ||||||||||||||||||
(A)Includes secured financing agreements, secured notes and bonds payable, unsecured notes net of issuance costs and notes payable of consolidated entities of $2.2 billion, $8.5 billion, $0.0 billion, and $4.9 billion, respectively.
(B)Includes secured financing agreements, secured notes and bonds payable, unsecured notes net of issuance costs and notes payable of consolidated entities of $11.9 billion, $6.3 billion, $1.3 billion, and $0.0 billion, respectively.
Borrowing Capacity
The following table represents borrowing capacity as of March 31, 2026:
| Debt Obligations / Collateral | Borrowing Capacity | Balance Outstanding | Available Financing(A) | |||||||||||||||||||||||
| Secured Financing Agreements: | ||||||||||||||||||||||||||
Residential mortgage loans, RTLs, Jupiter and real estate | $ | $ | $ | |||||||||||||||||||||||
| Loan originations | ||||||||||||||||||||||||||
| CLOs | ||||||||||||||||||||||||||
| Excess MSRs | ||||||||||||||||||||||||||
| Secured Notes and Bonds Payable: | ||||||||||||||||||||||||||
| MSRs | ||||||||||||||||||||||||||
| Servicer advances | ||||||||||||||||||||||||||
| Real estate | ||||||||||||||||||||||||||
| Liabilities of Consolidated Entities: | ||||||||||||||||||||||||||
| Consolidated funds | ||||||||||||||||||||||||||
| $ | $ | $ | ||||||||||||||||||||||||
Certain of the debt obligations are subject to customary loan covenants and event of default provisions, including event of default provisions triggered by certain specified declines in Rithm Capital’s equity or a failure to maintain a specified tangible net worth, liquidity or indebtedness to tangible net worth ratio. Rithm Capital was in compliance with all of its debt covenants as of March 31, 2026.
2030 Senior Unsecured Notes
On June 20, 2025, the Company issued $500.0 million aggregate principal amount of senior unsecured notes due on July 15, 2030 (the “2030 Senior Notes”) in a private offering for proceeds of approximately $495.0 million, net of commissions and estimated offering expenses payable by the Company. Interest on the 2030 Senior Notes accrues at the rate of 8.000 % per annum with interest payable semi-annually in arrears on each of January 15th and July 15th, commencing on January 15, 2026.
43
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
The 2030 Senior Notes become redeemable in whole or in part at any time and from time to time, on or after July 15, 2027, at a price equal to the following fixed redemption prices (expressed as a percentage of principal amount of the 2030 Senior Notes to be redeemed):
| Year | Price | |||||||
| 2027 | % | |||||||
| 2028 | % | |||||||
| 2029 and thereafter | % | |||||||
Prior to July 15, 2027, the Company is entitled at its option, at any time and from time to time, to redeem the 2030 Senior Notes in whole or in part at a price equal to 100 % of the principal amount thereof, plus the applicable “make-whole” premium as of the applicable redemption date, and accrued but unpaid interest, if any, to, but excluding the applicable date of redemption. In addition, prior to July 15, 2027, the Company is entitled at its option on one or more occasions to redeem the 2030 Senior Notes in an aggregate principal amount not to exceed 40 % of the aggregate principal amount of the 2030 Senior Notes originally issued at a redemption price of 108.000 %, plus accrued but unpaid interest, if any, to, but not including, the applicable redemption date with the net cash proceeds from one or more Qualified Equity Offerings (as defined in the Indenture, dated June 20, 2025, by and between the Company and U.S. Bank Trust Company, National Association, pursuant to which the 2030 Senior Notes were issued (the “2030 Notes Indenture”)).
The Company incurred fees of approximately $5.4 million in relation to the issuance of the 2030 Senior Notes. These fees were capitalized as debt issuance cost and presented as part of unsecured notes, net of issuance costs on the consolidated balance sheets. In connection with the 2030 Senior Notes, the Company recognized interest expense of $9.9 million for the three months ended March 31, 2026. As of March 31, 2026 and December 31, 2025, the unamortized debt issuance cost was approximately $4.7 million and $5.0 million, respectively.
The 2030 Senior Notes are senior unsecured obligations and rank equal in right of payment with all of the Company’s existing and future senior unsecured indebtedness and senior unsecured guarantees. At the time of issuance, the 2030 Senior Notes were not guaranteed by any of the Company’s subsidiaries and none of its subsidiaries are required to guarantee the 2030 Senior Notes in the future, except under limited specified circumstances.
The 2030 Senior Notes contain financial covenants and other non-financial covenants, including, among other things, limits on the ability of the Company and its restricted subsidiaries to incur certain indebtedness (subject to various exceptions), a requirement that the Company maintain Total Unencumbered Assets (as defined in the 2030 Notes Indenture) of not less than 120 % of the aggregate principal amount of the outstanding unsecured debt of the Company, and imposes certain requirements in order for the Company to merge or consolidate with or transfer all or substantially all of its properties and assets to another person, in each case subject to certain qualifications set forth in the 2030 Notes Indenture. If the Company were to fail to comply with these covenants, after the expiration of the applicable cure periods, the debt maturity could be accelerated or other remedies could be sought by the lenders. As of March 31, 2026, the Company was in compliance with all covenants.
In the event of a Change of Control or Mortgage Business Triggering Event (each as defined in the 2030 Notes Indenture), each holder of the 2030 Senior Notes will have the right to require the Company to repurchase all or any part of such holder’s outstanding balance at a purchase price of 101 % of the principal amount of the 2030 Senior Notes, plus accrued and unpaid interest, if any, to, but not including, the date of such repurchase.
2029 Senior Unsecured Notes
On March 19, 2024, the Company issued $775.0 million aggregate principal amount of senior unsecured notes due on April 1, 2029 (the “2029 Senior Notes”) in a private offering at an issue price of 98.981 % for net proceeds of approximately $759.0 million, net of commissions and initial offering expenses. Interest on the 2029 Senior Notes accrues at the rate of 8.000 % per annum with interest payable semi-annually in arrears on each of April 1st and October 1st, commencing on October 1, 2024.
44
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
The 2029 Senior Notes become redeemable in whole or in part at any time and from time to time, on or after April 1, 2026, at a price equal to the following fixed redemption prices (expressed as a percentage of principal amount of the 2029 Senior Notes to be redeemed):
| Year | Price | |||||||
| 2026 | % | |||||||
| 2027 | % | |||||||
| 2028 and thereafter | % | |||||||
Prior to April 1, 2026, the Company is entitled at its option, at any time and from time to time, to redeem the 2029 Senior Notes in whole or in part at a price equal to 100 % of the principal amount thereof, plus the applicable “make-whole” premium as of the applicable redemption date, and accrued but unpaid interest, if any, to, but excluding the applicable date of redemption. In addition, prior to April 1, 2026, the Company was entitled at its option on one or more occasions to redeem the 2029 Senior Notes in an aggregate principal amount not to exceed 40 % of the aggregate principal amount of the 2029 Senior Notes originally issued at a redemption price of 108.000 %, plus accrued but unpaid interest, if any, to, but not including, the applicable redemption date with the net cash proceeds from one or more Qualified Equity Offerings (as defined in the Indenture, dated March 19, 2024, pursuant to which the 2029 Senior Notes were issued (the “2029 Notes Indenture”)).
The Company incurred fees of approximately $9.1 million in relation to the issuance of the 2029 Senior Notes. These fees were capitalized as debt issuance cost and presented as part of unsecured notes, net of issuance costs on the consolidated balance sheets. In connection with the 2029 Senior Notes, the Company recognized interest expense of $15.3 million and $16.3 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026 and December 31, 2025, the unamortized discount and debt issuance cost was approximately $11.0 million and $11.8 million, respectively.
The 2029 Senior Notes are senior unsecured obligations and rank equal in right of payment with all of the Company’s existing and future senior unsecured indebtedness and senior unsecured guarantees. At the time of issuance, the 2029 Senior Notes were not guaranteed by any of the Company’s subsidiaries and none of its subsidiaries are required to guarantee the 2029 Senior Notes in the future, except under limited specified circumstances.
The 2029 Senior Notes contain financial covenants and other non-financial covenants, including, among other things, limits on the ability of the Company and its restricted subsidiaries to incur certain indebtedness (subject to various exceptions), a requirement that the Company maintain Total Unencumbered Assets (as defined in the 2029 Notes Indenture) of not less than 120 % of the aggregate principal amount of the outstanding unsecured debt of the Company and imposes certain requirements in order for the Company to merge or consolidate with or transfer all or substantially all of its properties and assets to another person, in each case subject to certain qualifications set forth in the 2029 Notes Indenture. If the Company were to fail to comply with these covenants, after the expiration of the applicable cure periods, the debt maturity could be accelerated or other remedies could be sought by the lenders. As of March 31, 2026, the Company was in compliance with all covenants.
In the event of a Change of Control or Mortgage Business Triggering Event (each as defined in the 2029 Notes Indenture), each holder of the 2029 Senior Notes will have the right to require the Company to repurchase all or any part of such holder’s outstanding balance at a purchase price of 101 % of the principal amount of the 2029 Senior Notes, plus accrued and unpaid interest, if any, to, but not including, the date of such repurchase.
2025 Senior Unsecured Notes
The Company’s senior unsecured notes due October 15, 2025 (the “2025 Senior Notes” and, together with the 2030 Senior Notes and the 2029 Senior Notes, the “Senior Unsecured Notes”) were fully redeemed during the second quarter of 2025 when the Company redeemed the remaining $275.0 million aggregate principal amount outstanding for cash of $278.7 million, inclusive of accrued and unpaid interest. As a result, the Company recognized a loss on extinguishment of debt of $0.7 million during 2025.
Interest expense related to the 2025 Senior Notes was $4.2 million for the three months ended March 31, 2025. There was no interest expense recognized related to the 2025 Senior Notes for the three months ended March 31, 2026.
45
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
Tax Receivable Agreement
In 2007, Sculptor entered into a tax receivable agreement (“TRA”) with the former holders of units in Sculptor’s operating partnerships (the “TRA Holders”). The TRA provides for the payment by Sculptor to the TRA Holders of a portion of the cash savings in U.S. federal, state and local income tax that Sculptor realizes as a result of certain tax benefits attributable to taxable acquisitions by Sculptor (and certain affiliates and successors) of Sculptor operating partnership units.
The TRA includes certain “change of control” assumptions that became applicable as a result of the Sculptor Acquisition, including the assumption that Sculptor (or its successor) has sufficient taxable income to use the relevant tax benefits. As a result, payments under the TRA will be calculated without regard to Sculptor’s ability to actually use tax assets (including net operating losses), the use of which may be significantly limited and may therefore exceed the actual tax savings to Sculptor of the associated tax assets.
The estimated undiscounted future payment under the TRA was $249.7 million as of March 31, 2026. The carrying value of the TRA liability measured at amortized cost was $165.4 million and $162.8 million as of March 31, 2026 and December 31, 2025, respectively, with interest expense recognized under the effective interest method. The TRA liability is presented within unsecured notes, net of issuance costs on the consolidated balance sheets.
The table below presents the Company’s estimate as of March 31, 2026, of the maximum undiscounted amounts that would be payable under the TRA using the assumptions described above. In light of the numerous factors affecting Sculptor’s obligation to make such payments, the timing and amounts of any such actual payments may differ materially from those presented in the table.
| Year Ending | Potential Payments Under TRA | |||||||
| April 1 through December 31, 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| 2031 and thereafter | ||||||||
| $ | ||||||||
18. FAIR VALUE MEASUREMENTS
Fair value represents the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date (i.e., an exit price). The Company holds a variety of assets and liabilities, certain of which are not publicly traded or that are otherwise illiquid. Significant judgment and estimation go into the assumptions that drive the fair value of these assets and liabilities. Due to the inherent uncertainty of valuations of investments that are determined to be illiquid or do not have readily ascertainable fair values, the estimates of fair value may differ from the values ultimately realized, and those differences can be material.
U.S. GAAP establishes a hierarchical disclosure framework that prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is impacted by a number of factors, including the type and the specific characteristics of the assets and liabilities, including existence and transparency of transactions between market participants. Assets and liabilities with readily available actively quoted prices or for which fair value can be measured from actively-quoted prices generally will have a higher degree of market price observability and lesser degree of judgment used in measuring fair value.
Assets and liabilities measured at fair value are classified and disclosed into one of the following categories based on the observability of inputs used in the determination of fair values:
46
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
Level 1 – Quoted prices in active markets for identical instruments.
Level 2 – Valuations based principally on other observable market parameters, including:
•Quoted prices in active markets for similar instruments,
•Quoted prices in less active or inactive markets for identical or similar instruments,
•Other observable inputs, such as interest rates, yield curves, volatilities, prepayment rates, loss severities, credit risks and default rates (“CDR”) and
•Market corroborated inputs (derived principally from or corroborated by observable market data).
Level 3 – Valuations based significantly on unobservable inputs.
Investments in funds that are measured at fair value using net asset value (“NAV”) per share as a practical expedient are not categorized within the fair value hierarchy.
Rithm Capital follows this hierarchy for its fair value measurements. The classifications are based on the lowest level of input that is significant to the fair value measurement.
47
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
The carrying values and fair values of assets and liabilities recorded at fair value on a recurring basis, as well as other financial instruments measured at amortized cost for which fair value is disclosed, as of March 31, 2026 were as follows:
| Principal Balance or Notional Amount | Carrying Value | Fair Value(E) | |||||||||||||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | NAV | Total | |||||||||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||||||||
Excess MSRs(A) | $ | $ | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||||||||||||
MSRs and MSR financing receivables(A) | — | ||||||||||||||||||||||||||||||||||||||||
| Servicer advance investments | — | ||||||||||||||||||||||||||||||||||||||||
Government and government-backed securities(B) | — | ||||||||||||||||||||||||||||||||||||||||
| Non-Agency securities | — | ||||||||||||||||||||||||||||||||||||||||
| Residential mortgage loans, HFS | — | ||||||||||||||||||||||||||||||||||||||||
| Residential mortgage loans, HFS, at fair value | — | ||||||||||||||||||||||||||||||||||||||||
| Residential mortgage loans, HFI, at fair value | — | ||||||||||||||||||||||||||||||||||||||||
| Residential mortgage loans subject to repurchase | — | ||||||||||||||||||||||||||||||||||||||||
| Consumer loans | — | ||||||||||||||||||||||||||||||||||||||||
| Derivative and hedging assets | — | ||||||||||||||||||||||||||||||||||||||||
Residential transition loans | — | ||||||||||||||||||||||||||||||||||||||||
| Insurance company investments, at fair value | — | ||||||||||||||||||||||||||||||||||||||||
| Notes receivable | — | ||||||||||||||||||||||||||||||||||||||||
| Loans receivable | — | ||||||||||||||||||||||||||||||||||||||||
| Equity investment, at fair value | — | ||||||||||||||||||||||||||||||||||||||||
| CLOs | — | ||||||||||||||||||||||||||||||||||||||||
Investments of consolidated entities - funds(C) | |||||||||||||||||||||||||||||||||||||||||
Investments of consolidated entities - loan securitizations(C) | — | ||||||||||||||||||||||||||||||||||||||||
| Other assets | N/A | ||||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||||||||||||||
| Secured financing agreements | $ | $ | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||||||||||||
Secured notes and bonds payable(D) | — | ||||||||||||||||||||||||||||||||||||||||
| Unsecured notes, net of issuance costs | — | ||||||||||||||||||||||||||||||||||||||||
| Residential mortgage loan repurchase liability | — | ||||||||||||||||||||||||||||||||||||||||
| Derivative and hedging liabilities | — | ||||||||||||||||||||||||||||||||||||||||
MSR financing liability(A) | — | ||||||||||||||||||||||||||||||||||||||||
| Notes receivable financing liability | — | ||||||||||||||||||||||||||||||||||||||||
| RTL financing liability | — | ||||||||||||||||||||||||||||||||||||||||
Notes payable and secured financing of consolidated entities - funds(C) | — | ||||||||||||||||||||||||||||||||||||||||
Notes payable of consolidated entities - loan securitizations(C) | — | ||||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||
(A)The notional amount represents the total UPB of the residential mortgage loans underlying the MSRs, MSR financing receivables, Excess MSRs and MSR financing liability. Rithm Capital does not receive an excess mortgage servicing amount on non-performing loans in Agency portfolios.
(B)Includes Treasury securities classified as Level 1 and held at amortized cost basis of $25.0 million (see Note 6).
(C)Includes assets and notes issued by consolidated VIEs accounted for under the CFE election.
(D)Includes $134.3 million of SCFT 2020-A (as defined in Note 19) MBS as of March 31, 2026, for which the FVO for financial instruments was elected.
(E)The table excludes cash and cash equivalents and other short-term receivables and payables for which the carrying value approximates fair value due to their short term nature and are classified within Level 1.
48
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
The carrying values and fair values of assets and liabilities recorded at fair value on a recurring basis, as well as other financial instruments for which fair value is disclosed, as of December 31, 2025 were as follows:
| Principal Balance or Notional Amount | Carrying Value | Fair Value(E) | |||||||||||||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | NAV | Total | |||||||||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||||||||
Excess MSRs(A) | $ | $ | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||||||||||||
MSRs and MSR financing receivables(A) | — | ||||||||||||||||||||||||||||||||||||||||
| Servicer advance investments | — | ||||||||||||||||||||||||||||||||||||||||
Government and government-backed securities(B) | — | ||||||||||||||||||||||||||||||||||||||||
| Non-Agency securities | — | ||||||||||||||||||||||||||||||||||||||||
| Residential mortgage loans, HFS | — | ||||||||||||||||||||||||||||||||||||||||
| Residential mortgage loans, HFS, at fair value | — | ||||||||||||||||||||||||||||||||||||||||
| Residential mortgage loans, HFI, at fair value | — | ||||||||||||||||||||||||||||||||||||||||
| Residential mortgage loans subject to repurchase | — | ||||||||||||||||||||||||||||||||||||||||
| Consumer loans | — | ||||||||||||||||||||||||||||||||||||||||
| Derivative and hedging assets | — | ||||||||||||||||||||||||||||||||||||||||
Residential transition loans | — | ||||||||||||||||||||||||||||||||||||||||
| Insurance company investments, at fair value | — | ||||||||||||||||||||||||||||||||||||||||
| Notes receivable | — | ||||||||||||||||||||||||||||||||||||||||
| Loans receivable | — | ||||||||||||||||||||||||||||||||||||||||
| Equity investment, at fair value | — | ||||||||||||||||||||||||||||||||||||||||
| CLOs | — | ||||||||||||||||||||||||||||||||||||||||
Investments of consolidated entities - funds(C) | |||||||||||||||||||||||||||||||||||||||||
Investments of consolidated entities - loan securitizations(C) | — | ||||||||||||||||||||||||||||||||||||||||
| Other assets | N/A | ||||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||||||||||||||
| Secured financing agreements | $ | $ | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||||||||||||
Secured notes and bonds payable(D) | — | ||||||||||||||||||||||||||||||||||||||||
| Unsecured notes, net of issuance costs | — | ||||||||||||||||||||||||||||||||||||||||
| Residential mortgage loan repurchase liability | — | ||||||||||||||||||||||||||||||||||||||||
| Derivative and hedging liabilities | — | ||||||||||||||||||||||||||||||||||||||||
MSR financing liability(A) | — | ||||||||||||||||||||||||||||||||||||||||
| Notes receivable financing liability | — | ||||||||||||||||||||||||||||||||||||||||
| RTL financing liability | — | ||||||||||||||||||||||||||||||||||||||||
Notes payable of consolidated entities - funds(C) | — | ||||||||||||||||||||||||||||||||||||||||
Notes payable of consolidated entities - loan securitizations(C) | — | ||||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||
(A)The notional amount represents the total UPB of the residential mortgage loans underlying the MSRs, MSR financing receivables, Excess MSRs and MSR financing liability. Rithm Capital does not receive an excess mortgage servicing amount on non-performing loans in Agency portfolios.
(B)Includes Treasury Bills classified as Level 1 and held at amortized cost basis of $24.8 million (see Note 6).
(C)Includes assets and notes issued by consolidated VIEs accounted for under the CFE election.
(D)Includes $143.4 million of SCFT 2020-A (as defined in Note 19) MBS as of December 31, 2025, for which the FVO for financial instruments was elected.
(E)The table excludes cash and cash equivalents and other short-term receivables and payables for which the carrying value approximates fair value due to their short term nature and are classified within Level 1.
49
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
The following tables summarize the changes in the Company’s Level 3 financial assets measured at fair value on a recurring basis for the periods presented:
| Level 3 | ||||||||||||||||||||||||||||||||
Excess MSRs(A) | MSRs and MSR Financing Receivables(A) | Servicer Advance Investments | Insurance Company Investments | Non-Agency Securities & CLOs(B) | Residential Mortgage Loans | Consumer Loans | Other Assets(C) | Residential Transition Loans(D) | Total | |||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||
| Transfers: | ||||||||||||||||||||||||||||||||
Transfers to Level 3(I) | ||||||||||||||||||||||||||||||||
| Gain (Loss) Included in Net Income: | ||||||||||||||||||||||||||||||||
Credit loss reversal on securities(E) | ( | ( | ||||||||||||||||||||||||||||||
Servicing Revenue, Net(F): | ||||||||||||||||||||||||||||||||
| Included in servicing revenue | ||||||||||||||||||||||||||||||||
| Fair Value Adjustments due to: | ||||||||||||||||||||||||||||||||
Other factors(E) | ( | ( | ||||||||||||||||||||||||||||||
Instrument-specific credit risk(E) | ( | ( | ( | ( | ||||||||||||||||||||||||||||
Gain (loss) on settlement of investments, net(E) | ||||||||||||||||||||||||||||||||
Other income (loss), net(E) | ( | ( | ( | ( | ||||||||||||||||||||||||||||
Gains included in OCI(G) | ||||||||||||||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||||||||
| Purchases, Sales and Repayments: | ||||||||||||||||||||||||||||||||
Purchases, net(H) | ||||||||||||||||||||||||||||||||
| Sales and settlement fundings | ( | ( | ||||||||||||||||||||||||||||||
| Proceeds from repayments | ( | ( | ( | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||
| Originations and other | ( | |||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||
(A)Includes the recapture agreement for each respective pool, as applicable.
(B)Includes CLOs of consolidated CFEs classified as Level 3 in the fair value hierarchy.
(C)For the purpose of this table, the IRLC asset and liability positions and embedded and other commitment derivatives are shown net.
(D)Includes RTLs of consolidated entities classified as Level 3 in the fair value hierarchy.
(E)Gain (loss) recorded in earnings during the period is attributable to the change in unrealized gain (loss) relating to Level 3 assets still held at the reporting dates and realized gain (loss) recorded during the period.
(F)See Note 5 for further details on the components of servicing revenue, net.
(G)Gain (loss) included in unrealized gain (loss) on AFS securities, net in the consolidated statements of comprehensive income.
(H)Purchases, net of non-Agency securities includes securities retained through securitizations accounted for as sales.
(I)Transfers to Level 3 financial assets were due to changes in the observability of inputs used in the valuation of such assets.
50
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
| Level 3 | ||||||||||||||||||||||||||||||||
Excess MSRs(A) | MSRs and MSR Financing Receivables(A) | Servicer Advance Investments | Insurance Company Investments | Non-Agency Securities & CLOs(B) | Residential Mortgage Loans | Consumer Loans | Other Assets(C) | Residential Transition Loans(D) | Total | |||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||
| Transfers: | ||||||||||||||||||||||||||||||||
Transfers out of Level 3(E) | ( | ( | ( | |||||||||||||||||||||||||||||
Transfers to Level 3(J) | ||||||||||||||||||||||||||||||||
| Gain (Loss) Included in Net Income: | ||||||||||||||||||||||||||||||||
Credit loss reversal on securities(F) | ||||||||||||||||||||||||||||||||
Servicing Revenue, Net(G): | ||||||||||||||||||||||||||||||||
| Included in servicing revenue | ( | ( | ||||||||||||||||||||||||||||||
| Fair Value Adjustments due to: | ||||||||||||||||||||||||||||||||
Other factors(F) | ( | ( | ( | |||||||||||||||||||||||||||||
Instrument-specific credit risk(F) | ( | ( | ( | ( | ||||||||||||||||||||||||||||
Other income (loss), net(F) | ||||||||||||||||||||||||||||||||
Gains included in OCI(H) | ||||||||||||||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||||||||
| Purchases, Sales and Repayments: | ||||||||||||||||||||||||||||||||
Purchases, net(I) | ||||||||||||||||||||||||||||||||
| Sales and settlement fundings | ( | ( | ( | |||||||||||||||||||||||||||||
| Proceeds from repayments | ( | ( | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||
| Originations and other | ||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||
(A)Includes the recapture agreement for each respective pool, as applicable.
(B)Includes CLOs of consolidated CFEs classified as Level 3 in the fair value hierarchy.
(C)For the purpose of this table, the IRLC asset and liability positions and embedded and other commitment derivatives are shown net.
(D)Includes RTLs of consolidated entities classified as Level 3 in the fair value hierarchy.
(E)Transfers out of Level 3 to Level 2 were primarily due to increased price transparency.
(F)Gain (loss) recorded in earnings during the period is attributable to the change in unrealized gain (loss) relating to Level 3 assets still held at the reporting dates and realized gain (loss) recorded during the period.
(G)See Note 5 for further details on the components of servicing revenue, net.
(H)Gain (loss) included in unrealized gain (loss) on AFS securities, net in the consolidated statements of comprehensive income.
(I)Purchases, net of non-Agency securities includes securities retained through securitizations accounted for as sales.
(J)Transfers to Level 3 financial assets were due to changes in the observability of inputs used in the valuation of such assets.
The following tables summarize the changes in the Company’s Level 3 financial liabilities measured at fair value on a recurring basis for the periods presented:
| Level 3 | ||||||||||||||||||||||||||||||||||||||||||||
| Asset-Backed Securities Issued | Notes Payable of CFEs - Consolidated Funds | Notes Payable of CFEs - Residential Transition Loans | MSR Financing Liability | Notes Receivable Financing Liability | RTL Financing Liability | Total | ||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
| Gains (Losses) Included in Net Income: | ||||||||||||||||||||||||||||||||||||||||||||
Servicing revenue, net(A) | ||||||||||||||||||||||||||||||||||||||||||||
Other income (loss)(B) | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
| Purchases, Issuance and Repayments: | ||||||||||||||||||||||||||||||||||||||||||||
Issuance | ||||||||||||||||||||||||||||||||||||||||||||
| Repayments | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
(A)See Note 5 for further details on the components of servicing revenue, net.
(B)Gain (loss) recorded in earnings during the period is attributable to the change in unrealized gain (loss) relating to Level 3 financial liabilities still held at the reporting dates and realized gain (loss) recorded during the period. The full fair value change during the years presented was due to factors other than instrument-specific credit risk.
51
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
| Level 3 | ||||||||||||||||||||||||||||||||||||||||||||
| Asset-Backed Securities Issued | Notes Payable of CFEs - Consolidated Funds | Notes Payable of CFEs - Residential Transition Loans | MSR Financing Liability | Notes Receivable Financing Liability | RTL Financing Liability | Total | ||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
| Transfers: | ||||||||||||||||||||||||||||||||||||||||||||
Transfers out of Level 3(A) | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Gains (Losses) Included in Net Income: | ||||||||||||||||||||||||||||||||||||||||||||
Servicing revenue, net(B) | ||||||||||||||||||||||||||||||||||||||||||||
Other income (loss)(C) | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
| Purchases, Issuance and Repayments: | ||||||||||||||||||||||||||||||||||||||||||||
| Repayments | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Other | ( | |||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
(A)Transfers out of Level 3 to Level 2 were primarily due to increased price transparency.
(B)See Note 5 for further details on the components of servicing revenue, net.
(C)Gain (loss) recorded in earnings during the period is attributable to the change in unrealized gain (loss) relating to Level 3 financial liabilities still held at the reporting dates and realized gain (loss) recorded during the period. The full fair value change during the years presented was due to factors other than instrument-specific credit risk.
Excess MSRs, MSRs and MSR Financing Receivables and MSR Financing Liability Valuation
Fair value estimates of Rithm Capital’s MSRs and related MSR financing liability and Excess MSRs were based on internal pricing models. The valuation technique is based on discounted cash flows. Significant inputs used in the valuations included expectations of prepayment rates, delinquency rates, recapture rates, mortgage servicing amount or excess mortgage servicing amount of the underlying residential mortgage loans, as applicable, and discount rates that market participants would use in determining the fair values of MSRs on similar pools of residential mortgage loans. In addition, for MSRs, significant inputs included the market-level estimated cost of servicing.
Significant increases (decreases) in the discount rates, prepayment or delinquency rates, or costs of servicing, in isolation would result in a significantly lower (higher) fair value measurement, whereas significant increases (decreases) in the recapture rates or mortgage servicing amount or excess mortgage servicing amount, as applicable, in isolation would result in a significantly higher (lower) fair value measurement. Generally, a change in the delinquency rate assumption is accompanied by a directionally similar change in the assumption used for the prepayment rate.
The following tables summarize certain information regarding the ranges and weighted averages of inputs used:
| March 31, 2026 | |||||||||||||||||||||||||||||
Significant Inputs(A) | |||||||||||||||||||||||||||||
Prepayment Rate(B) | Delinquency(C) | Recapture Rate(D) | Mortgage Servicing Amount or Excess Mortgage Servicing Amount (bps)(E) | Collateral Weighted Average Maturity (Years)(F) | |||||||||||||||||||||||||
| Excess MSRs directly held | ( | ( | ( | ( | ( | ||||||||||||||||||||||||
| MSRs, MSR Financing Receivables and MSR Financing Liability: | |||||||||||||||||||||||||||||
| GSE | ( | ( | ( | ( | |||||||||||||||||||||||||
| Non-Agency | ( | ( | ( | ( | |||||||||||||||||||||||||
| Ginnie Mae | ( | ( | ( | ( | |||||||||||||||||||||||||
| Total / Weighted Average—MSRs, MSR Financing Receivables and MSR Financing Liability | ( | ( | ( | ( | |||||||||||||||||||||||||
52
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
| December 31, 2025 | |||||||||||||||||||||||||||||
Significant Inputs(A) | |||||||||||||||||||||||||||||
Prepayment Rate(B) | Delinquency(C) | Recapture Rate(D) | Mortgage Servicing Amount or Excess Mortgage Servicing Amount (bps)(E) | Collateral Weighted Average Maturity (Years)(F) | |||||||||||||||||||||||||
| Excess MSRs directly held | ( | ( | ( | ( | ( | ||||||||||||||||||||||||
| MSRs, MSR Financing Receivables and MSR Financing Liability: | |||||||||||||||||||||||||||||
| GSE | ( | ( | ( | ( | |||||||||||||||||||||||||
| Non-Agency | ( | ( | ( | ( | |||||||||||||||||||||||||
| Ginnie Mae | ( | ( | ( | ( | |||||||||||||||||||||||||
| Total / Weighted Average—MSRs, MSR Financing Receivables and MSR Financing Liability | ( | ( | ( | ( | |||||||||||||||||||||||||
(A)Weighted by fair value of the portfolio.
(B)Projected annualized weighted average lifetime voluntary and involuntary prepayment rate using a prepayment vector.
(C)Projected percentage of residential mortgage loans in the pool for which the borrower is expected to miss a mortgage payment.
(D)Percentage of voluntarily prepaid loans that are expected to be refinanced by the related servicer or subservicer, as applicable.
(E)Weighted average total mortgage servicing amount, in excess of the base fee as applicable, measured in basis points (“bps”). As of March 31, 2026 and December 31, 2025, weighted average costs of subservicing of $7.22 (range of $7.09 – $7.66 ) and $7.22 (range of $7.11 – $7.83 ), respectively, per loan per month was used to value the GSE MSRs. Weighted average costs of subservicing of $11.11 (range of $9.01 – $12.93 ) and $11.23 (range of $9.08 – $13.36 ), respectively, per loan per month was used to value the non-Agency MSRs, including MSR financing receivables. Weighted average cost of subservicing of $9.80 and $9.88 , respectively, per loan per month was used to value the Ginnie Mae MSRs.
(F)Weighted average maturity of the underlying residential mortgage loans in the pool.
With respect to valuing the PHH-serviced MSRs and MSR financing receivables, which include a significant servicer advances receivable component, the cost of financing servicer advances receivable is assumed to be SOFR plus 185 bps and 185 bps as of March 31, 2026 and December 31, 2025, respectively.
As of March 31, 2026 and December 31, 2025, weighted average discount rates of 8.5 % (range of 8.1 % – 9.0 %) and 8.5 % (range of 8.1 % – 9.0 %), respectively, were used to value Rithm Capital’s Excess MSRs. As of March 31, 2026 and December 31, 2025, weighted average discount rates of 8.1 % (range of 7.6 % – 10.3 %) and 8.4 % (range of 8.0 % - 10.3 %), respectively, were used to value Rithm Capital’s MSRs and MSR financing receivables.
All of the assumptions listed have some degree of market observability, based on Rithm Capital’s knowledge of the market, relationships with market participants and use of common market data sources. Rithm Capital uses assumptions that generate its best estimate of future cash flows for each investment in MSRs and related MSR financing liability and Excess MSRs.
53
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
When valuing these assets, Rithm Capital uses the following criteria to determine the significant inputs:
•Prepayment Rate: Prepayment rate projections are in the form of a “vector” that varies over the expected life of the pool. The prepayment vector specifies the percentage of the collateral balance that is expected to prepay voluntarily (i.e., pay off) and involuntarily (i.e., default) at each point in the future. The prepayment vector is based on assumptions that reflect macroeconomic conditions like home price appreciation, current level of interest rates as well as loan level factors such as the borrower’s interest rate, Fair Isaac Corporation (“FICO”) score, LTV ratio, debt-to-income ratio and vintage on a loan level basis. Rithm Capital considers historical prepayment experience associated with the collateral when determining this vector and also reviews industry research on the prepayment experience of similar loan pools. This data is obtained from remittance reports, market data services and other market sources.
•Delinquency Rates: For existing mortgage pools, delinquency rates are based on the recent pool-specific experience of loans that missed their latest mortgage payments. Delinquency rate projections are in the form of a “vector” that varies over the expected life of the pool. The delinquency vector specifies the percentage of the UPB that is expected to be delinquent each month. The delinquency vector is based on assumptions that reflect macroeconomic conditions, the historical delinquency rates for the pools and the underlying borrower characteristics such as the FICO score and LTV ratio. For the recapture agreements and recaptured loans, delinquency rates are based on the experience of similar loan pools originated by Rithm Capital’s servicers and subservicers and delinquency experience over the past year. Rithm Capital believes this time period provides a reasonable sample for projecting future delinquency rates while taking into account current market conditions. Additional consideration is given to loans that are expected to become 30 or more days delinquent.
•Recapture Rates: Recapture rates are based on actual average recapture rates experienced by Rithm Capital’s servicers and subservicers on similar residential mortgage loan pools. Generally, Rithm Capital looks to three to six months ’ worth of actual recapture rates, which it believes provides a reasonable sample for projecting future recapture rates while taking into account current market conditions. Recapture rate projections are in the form of a “vector” that varies over the expected life of the pool. The recapture vector specifies the percentage of the refinanced loans that have been recaptured within the pool by the servicer or subservicer. The recapture vector takes into account the nature and timeline of the relationship between the borrowers in the pool and the servicer or subservicer, the customer retention programs offered by the servicer or subservicer and the historical recapture rates.
•Mortgage Servicing Amount or Excess Mortgage Servicing Amount: For existing mortgage pools, mortgage servicing amount and excess mortgage servicing amount projections are based on the actual total mortgage servicing amount, in excess of a base fee as applicable. For loans expected to be refinanced by the related servicer or subservicer and subject to a recapture agreement, Rithm Capital considers the mortgage servicing amount or excess mortgage servicing amount on loans recently originated by the related servicer over the past three months and other general market considerations. Rithm Capital believes this time period provides a reasonable sample for projecting future mortgage servicing amounts and excess mortgage servicing amounts while taking into account current market conditions.
•Discount Rate: The discount rates used by Rithm Capital are derived from market data on pricing of MSRs backed by similar collateral.
•Cost of subservicing: The costs of subservicing used by Rithm Capital are based on available market data for various loan types and delinquency statuses.
Rithm Capital uses different prepayment and delinquency assumptions in valuing the MSRs and Excess MSRs, relating to the original loan pools, the recapture agreements and the MSRs and Excess MSRs, relating to recaptured loans. The prepayment rate and delinquency rate assumptions differ because of differences in the collateral characteristics, refinance potential and expected borrower behavior for original loans and loans which have been refinanced. The assumptions for recapture and discount rates when valuing MSRs and Excess MSRs and recapture agreements are based on historical recapture experience and market pricing.
54
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
The following table summarizes the estimated change in fair value of Rithm Capital’s interests in GSE MSRs, owned as of March 31, 2026, given several parallel shifts in the discount rate, prepayment rate, delinquency rate and recapture rate:
Fair value at March 31, 2026 | $ | |||||||||||||||||||||||||
| Discount rate shift in % | -20% | -10% | 10% | 20% | ||||||||||||||||||||||
| Estimated fair value | $ | $ | $ | $ | ||||||||||||||||||||||
| Change in Estimated Fair Value: | ||||||||||||||||||||||||||
| Amount | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||
| Percentage | % | % | ( | % | ( | % | ||||||||||||||||||||
| Prepayment rate shift in % | -20% | -10% | 10% | 20% | ||||||||||||||||||||||
| Estimated fair value | $ | $ | $ | $ | ||||||||||||||||||||||
| Change in Estimated Fair Value: | ||||||||||||||||||||||||||
| Amount | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||
| Percentage | % | % | ( | % | ( | % | ||||||||||||||||||||
| Delinquency rate shift in % | -20% | -10% | 10% | 20% | ||||||||||||||||||||||
| Estimated fair value | $ | $ | $ | $ | ||||||||||||||||||||||
| Change in Estimated Fair Value: | ||||||||||||||||||||||||||
| Amount | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||
| Percentage | % | % | ( | % | ( | % | ||||||||||||||||||||
| Recapture rate shift in % | -20% | -10% | 10% | 20% | ||||||||||||||||||||||
| Estimated fair value | $ | $ | $ | $ | ||||||||||||||||||||||
| Change in Estimated Fair Value: | ||||||||||||||||||||||||||
| Amount | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||
| Percentage | ( | % | ( | % | % | % | ||||||||||||||||||||
The following table summarizes the estimated change in fair value of Rithm Capital’s interests in non-Agency MSRs, including MSR financing receivables, owned as of March 31, 2026, given several parallel shifts in the discount rate, prepayment rate, delinquency rate and recapture rate:
Fair value at March 31, 2026 | $ | |||||||||||||||||||||||||
| Discount rate shift in % | -20% | -10% | 10% | 20% | ||||||||||||||||||||||
| Estimated fair value | $ | $ | $ | $ | ||||||||||||||||||||||
| Change in Estimated Fair Value: | ||||||||||||||||||||||||||
| Amount | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||
| Percentage | % | % | ( | % | ( | % | ||||||||||||||||||||
| Prepayment rate shift in % | -20% | -10% | 10% | 20% | ||||||||||||||||||||||
| Estimated fair value | $ | $ | $ | $ | ||||||||||||||||||||||
| Change in Estimated Fair Value: | ||||||||||||||||||||||||||
| Amount | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||
| Percentage | % | % | ( | % | ( | % | ||||||||||||||||||||
| Delinquency rate shift in % | -20% | -10% | 10% | 20% | ||||||||||||||||||||||
| Estimated fair value | $ | $ | $ | $ | ||||||||||||||||||||||
| Change in Estimated Fair Value: | ||||||||||||||||||||||||||
| Amount | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||
| Percentage | % | % | ( | % | ( | % | ||||||||||||||||||||
| Recapture rate shift in % | -20% | -10% | 10% | 20% | ||||||||||||||||||||||
| Estimated fair value | $ | $ | $ | $ | ||||||||||||||||||||||
| Change in Estimated Fair Value: | ||||||||||||||||||||||||||
| Amount | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||
| Percentage | ( | % | ( | % | % | % | ||||||||||||||||||||
55
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
The following table summarizes the estimated change in fair value of Rithm Capital’s interests in Ginnie Mae MSRs, owned as of March 31, 2026, given several parallel shifts in the discount rate, prepayment rate, delinquency rate and recapture rate:
Fair value at March 31, 2026 | $ | |||||||||||||||||||||||||
| Discount rate shift in % | -20% | -10% | 10% | 20% | ||||||||||||||||||||||
| Estimated fair value | $ | $ | $ | $ | ||||||||||||||||||||||
| Change in Estimated Fair Value: | ||||||||||||||||||||||||||
| Amount | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||
| Percentage | % | % | ( | % | ( | % | ||||||||||||||||||||
| Prepayment rate shift in % | -20% | -10% | 10% | 20% | ||||||||||||||||||||||
| Estimated fair value | $ | $ | $ | $ | ||||||||||||||||||||||
| Change in Estimated Fair Value: | ||||||||||||||||||||||||||
| Amount | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||
| Percentage | % | % | ( | % | ( | % | ||||||||||||||||||||
| Delinquency rate shift in % | -20% | -10% | 10% | 20% | ||||||||||||||||||||||
| Estimated fair value | $ | $ | $ | $ | ||||||||||||||||||||||
| Change in Estimated Fair Value: | ||||||||||||||||||||||||||
| Amount | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||
| Percentage | % | % | ( | % | ( | % | ||||||||||||||||||||
| Recapture rate shift in % | -20% | -10% | 10% | 20% | ||||||||||||||||||||||
| Estimated fair value | $ | $ | $ | $ | ||||||||||||||||||||||
| Change in Estimated Fair Value: | ||||||||||||||||||||||||||
| Amount | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||
| Percentage | ( | % | ( | % | % | % | ||||||||||||||||||||
Each of the preceding sensitivity analyses is hypothetical and is provided for illustrative purposes only. There are certain limitations inherent in the sensitivity analyses presented. In particular, the results are calculated by stressing a particular economic assumption independent of changes in any other assumption; in practice, changes in one factor may result in changes in another, which might counteract or amplify the sensitivities. Also, changes in the fair value based on a 10% variation in an assumption generally may not be extrapolated because the relationship of the change in the assumption to the change in fair value may not be linear.
Servicer Advance Investments Valuation
Rithm Capital uses internal pricing models to estimate the future cash flows related to the servicer advance investments that incorporate significant unobservable inputs and include assumptions that are inherently subjective and imprecise. Rithm Capital’s estimations of future cash flows include the combined cash flows of all of the components that comprise the servicer advance investments: existing advances, the requirement to purchase future advances, the recovery of advances and the right to the base fee component of the related MSR. The factors that most significantly impact the fair value include (i) the rate at which the servicer advance balance changes over the term of the investment, (ii) the UPB of the underlying loans with respect to which Rithm Capital has the obligation to make advances and owns the base fee component of the related MSR which, in turn, is driven by prepayment rates and (iii) the percentage of delinquent loans with respect to which Rithm Capital owns the base fee component of the related MSR. The valuation technique is based on discounted cash flows. Significant inputs used in the valuations included the assumptions used to establish the aforementioned cash flows and discount rates that market participants would use in determining the fair values of servicer advance investments.
Significant increases (decreases) in the advance balance-to-UPB ratio, prepayment rate, delinquency rate or discount rate, in isolation, would result in a significantly lower (higher) fair value measurement. Generally, a change in the delinquency rate assumption is accompanied by a directionally similar change in the assumption used for the advance balance-to-UPB ratio.
56
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
The following table summarizes certain information regarding the ranges and weighted averages of significant inputs used in valuing the servicer advance investments, including the base fee component of the related MSRs:
| Significant Inputs | |||||||||||||||||||||||||||||||||||
| Outstanding Servicer Advances to UPB of Underlying Residential Mortgage Loans | Prepayment Rate(A) | Delinquency | Mortgage Servicing Amount(B) | Discount Rate | Collateral Weighted Average Maturity (Years)(C) | ||||||||||||||||||||||||||||||
March 31, 2026 | |||||||||||||||||||||||||||||||||||
December 31, 2025 | |||||||||||||||||||||||||||||||||||
(A)Projected annual weighted average lifetime voluntary and involuntary prepayment rate using a prepayment vector.
(B)Mortgage servicing amount is net of 5.2 bps and 4.6 bps which represent the amounts Rithm Capital paid its servicers as a monthly servicing fee as of March 31, 2026 and December 31, 2025, respectively.
(C)Weighted average maturity of the underlying residential mortgage loans in the pool.
The valuation of the servicer advance investments also takes into account the performance fee paid to the servicer, which is based on the Company’s equity returns and therefore is impacted by relevant financing assumptions such as LTV ratio and interest rate as well as advance-to-UPB ratio. All of the assumptions listed have some degree of market observability, based on Rithm Capital’s knowledge of the market, relationships with market participants and use of common market data sources. The prepayment rate, the delinquency rate and the advance-to-UPB ratio projections are in the form of “curves” or “vectors” that vary over the expected life of the underlying mortgages and related servicer advances. Rithm Capital uses assumptions that generate its best estimate of future cash flows for each servicer advance investment, including the base fee component of the related MSR.
When valuing servicer advance investments, Rithm Capital uses the following criteria to determine the significant inputs:
•Servicer advance balance: Servicer advance balance projections are in the form of a “vector” that varies over the expected life of the residential mortgage loan pool. The servicer advance balance projection is based on assumptions that reflect factors such as the borrower’s expected delinquency status, the rate at which delinquent borrowers re-perform or become current again, servicer modification offer and acceptance rates, liquidation timelines and the servicers’ stop advance and clawback policies.
•Prepayment Rate: Prepayment rate projections are in the form of a “vector” that varies over the expected life of the pool. The prepayment vector specifies the percentage of the collateral balance that is expected to prepay voluntarily (i.e., pay off) and involuntarily (i.e., default) at each point in the future. The prepayment vector is based on assumptions that reflect macroeconomic conditions and factors such as the borrower’s FICO score, LTV ratio, debt-to-income ratio and vintage on a loan level basis. Rithm Capital considers collateral-specific prepayment experience when determining this vector.
•Delinquency Rates: For existing mortgage pools, delinquency rates are based on the recent pool-specific experience of loans that missed recent mortgage payment(s) as well as loan- and borrower-specific characteristics such as the borrower’s FICO score, the LTV ratio, debt-to-income ratio, occupancy status, loan documentation, payment history and previous loan modifications. Rithm Capital believes the time period utilized provides a reasonable sample for projecting future delinquency rates while taking into account current market conditions.
•Mortgage Servicing Amount: Mortgage servicing amounts are contractually determined on a pool-by-pool basis. Rithm Capital projects the weighted average mortgage servicing amount based on its projections for prepayment rates.
•SOFR: The performance-based incentive fees on servicer advance investments portfolios serviced by Rocket Companies, Inc., as successor by merger to Mr. Cooper Group Inc., are driven by SOFR-based factors. The SOFR curves used are widely used by market participants as reference rates for many financial instruments.
•Discount Rate: The discount rates used by Rithm Capital are derived from market data on pricing of MSRs backed by similar collateral and the advances made thereon.
57
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
Real Estate and Other Securities Valuation
Real estate and other securities valuation methodology and results are detailed below. Increased (decreased) prepayment speeds, default rates or loss severity assumptions would decrease (increase) valuations. Generally, a change in default rate assumption is accompanied by a directionally similar change in loss severity assumptions. Treasury securities are valued using market-based prices published by the U.S. Department of the Treasury and are classified as Level 1.
| Fair Value | ||||||||||||||||||||||||||||||||||||||
| Asset Type | Outstanding Face Amount | Amortized Cost Basis | Multiple Quotes(A) | Single Quote(B) | Total | Level | ||||||||||||||||||||||||||||||||
| March 31, 2026 | ||||||||||||||||||||||||||||||||||||||
Government-backed securities(C) | $ | $ | $ | $ | $ | 2 | ||||||||||||||||||||||||||||||||
CLOs(D) | 2 & 3 | |||||||||||||||||||||||||||||||||||||
Non-Agency and other securities(D) | 3 | |||||||||||||||||||||||||||||||||||||
Insurance company investments - securities(E) | 2 & 3 | |||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||||||||||||||
Government-backed securities(C) | $ | $ | $ | $ | $ | 2 | ||||||||||||||||||||||||||||||||
CLOs(D) | 2 & 3 | |||||||||||||||||||||||||||||||||||||
Non-Agency and other securities(D) | 3 | |||||||||||||||||||||||||||||||||||||
Insurance company investments - securities(E) | 2 & 3 | |||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
(A)Rithm Capital generally obtains pricing service quotations or broker quotations from two sources. Rithm Capital evaluates quotes received, determines one as being most representative of fair value and does not use an average of the quotes. Even if Rithm Capital receives two or more quotes on a particular security that come from non-selling brokers or pricing services, it does not use an average because it believes using an actual quote more closely represents a transactable price for the security than an average level. Furthermore, in some cases, for non-Agency securities, there is a wide disparity between the quotes Rithm Capital receives. Rithm Capital believes using an average of the quotes in these cases would not represent the fair value of the asset. Based on Rithm Capital’s own fair value analysis, it selects one of the quotes which is believed to most accurately reflect fair value. Rithm Capital has not adjusted any of the quotes received in the periods presented. These quotations are generally received via email and contain disclaimers which state that they are “indicative” and not “actionable” — meaning that the party giving the quotation is not bound to purchase the security at the quoted price. Rithm Capital’s investments in government-backed securities are classified within Level 2 of the fair value hierarchy because the market for these securities is active and market prices are readily observable.
The third-party pricing services and brokers engaged by Rithm Capital (collectively, “valuation providers”) use either the income approach or the market approach, or a combination of the two, in arriving at their estimated valuations of securities. Valuation providers using the market approach generally look at prices and other relevant information generated by market transactions involving identical or comparable assets. Valuation providers using the income approach create pricing models that generally incorporate such assumptions as discount rates, expected prepayment rates, expected default rates and expected loss severities. Rithm Capital has reviewed the methodologies utilized by its valuation providers and has found them to be consistent with GAAP requirements. In addition to obtaining multiple quotations, when available, and reviewing the valuation methodologies of its valuation providers, Rithm Capital creates its own internal pricing models for Level 3 securities and uses the outputs of these models as part of its process of evaluating the fair value estimates it receives from its valuation providers. These models incorporate the same types of assumptions as the models used by the valuation providers, but the assumptions are developed independently. These assumptions are regularly refined and updated at least quarterly by Rithm Capital and reviewed by its independent valuation group, which is separate from its investment acquisition and management group, to reflect market developments and actual performance.
For 92.1 % and 78.0 % of non-Agency securities as of March 31, 2026 and December 31, 2025, respectively, the ranges and weighted averages of assumptions used by Rithm Capital’s valuation providers are summarized in the table below. The assumptions used by Rithm Capital’s valuation providers with respect to the remainder of non-Agency securities were not readily available.
| Fair Value | Discount Rate | Prepayment Rate(a) | CDR(b) | Loss Severity(c) | ||||||||||||||||||||||||||||
| March 31, 2026 | $ | ( | ( | ( | ( | |||||||||||||||||||||||||||
| December 31, 2025 | $ | ( | ( | ( | ( | |||||||||||||||||||||||||||
(a)Represents the annualized rate of the prepayments as a percentage of the total principal balance of the pool.
(b)Represents the annualized rate of the involuntary prepayments (defaults) as a percentage of the total principal balance of the pool.
(c)Represents the expected amount of future realized losses resulting from the ultimate liquidation of a particular loan, expressed as the net amount of loss relative to the outstanding balance of the loans in default.
(B)Rithm Capital was unable to obtain quotations from more than one source on these securities.
(C)Presented within government and government-backed securities on the consolidated balance sheets.
(D)Presented within other assets on the consolidated balance sheets.
(E)Presented within insurance company investments, at fair value on the consolidated balance sheets.
58
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
Residential Mortgage Loans Valuation
Rithm Capital, through Newrez, originates residential mortgage loans that it intends to sell into the Agencies mortgage-backed securitizations. Residential mortgage loans HFS, at fair value are typically pooled together and sold into certain exit markets, depending upon underlying attributes of the loan, such as agency eligibility, product type, interest rate and credit quality. Newrez also originates non-qualified residential mortgage (“Non-QM”) loans that do not meet the qualified mortgage rules per the Consumer Financial Protection Bureau that it intends to sell to private investors. Residential mortgage loans HFS, at fair value are valued using a market approach by utilizing either: (i) the fair value of securities backed by similar mortgage loans, adjusted for certain factors to approximate the fair value of a whole mortgage loan, (ii) current commitments to purchase loans or (iii) recent observable market trades for similar loans, adjusted for credit risk and other individual loan characteristics. As these prices are derived from market observable inputs, Rithm Capital classifies these valuations as Level 2 in the fair value hierarchy. Originated residential mortgage loans HFS for which there is little to no observable trading activity of similar instruments are valued using Level 3 measurements based upon (i) internal pricing models to forecast loan level cash flows using inputs such as default rates, prepayments speeds and discount rates, or (ii) consensus pricing (broker quotes) or historical sale transactions for similar loans.
Residential mortgage loans HFS, at fair value also include non-conforming seasoned mortgage loans acquired and identified for securitization, which are valued using internal pricing models to forecast loan level cash flows based on a potential securitization exit using inputs such as default rates, prepayments speeds and discount rates, and may include adjustments based on consensus pricing (broker quotes). Residential mortgage loans HFI, at fair value include non-conforming seasoned mortgage loans acquired and not identified for sale or securitization, which are valued using internal pricing models to forecast loan level cash flows using inputs such as default rates, prepayments speeds and discount rates, and may include adjustments based on consensus pricing (broker quotes). As the internal pricing models are based on certain unobservable inputs, Rithm Capital classifies these valuations as Level 3 in the fair value hierarchy.
For non-performing loans, asset liquidation cash flows are derived based on the estimated time to liquidate the loan, the estimated value of the collateral, expected costs and estimated home price levels. Estimated cash flows for both performing and non-performing loans are discounted at yields considered appropriate to arrive at a reasonable exit price for the asset. Rithm Capital classifies these valuations as Level 3 in the fair value hierarchy.
Significant increases (decreases) in prepayment rates, delinquency rates or discount rates, in isolation, would result in a significantly lower (higher) fair value measurement. Generally, a change in default rate assumption is accompanied by a directionally similar change in loss severity assumptions.
The following tables summarize certain information regarding the ranges and weighted averages of inputs (weighted by fair value) used in valuing residential mortgage loans HFS, at fair value classified as Level 3 as of March 31, 2026:
| Performing Loans | Fair Value | Discount Rate | Prepayment Rate | CDR | Loss Severity | |||||||||||||||||||||||||||
| Acquired loans | $ | ( | ( | ( | ( | |||||||||||||||||||||||||||
| Non-Performing Loans | Fair Value | Discount Rate | Annual Change in Home Prices | CDR | Current Value of Underlying Properties | |||||||||||||||||||||||||||
| Acquired loans | $ | ( | ( | ( | ( | |||||||||||||||||||||||||||
59
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
The following tables summarize certain information regarding the ranges and weighted averages of inputs (weighted by fair value) used in valuing residential mortgage loans HFS, at fair value classified as Level 3 as of December 31, 2025:
| Performing Loans | Fair Value | Discount Rate | Prepayment Rate | CDR | Loss Severity | |||||||||||||||||||||||||||
| Acquired loans | $ | ( | ( | ( | ( | |||||||||||||||||||||||||||
| Non-Performing Loans | Fair Value | Discount Rate | Annual Change in Home Prices | CDR | Current Value of Underlying Properties | |||||||||||||||||||||||||||
| Acquired loans | $ | ( | ( | ( | ( | |||||||||||||||||||||||||||
The following table summarizes certain information regarding the ranges and weighted averages of inputs (weighted by fair value) used in valuing residential mortgage loans HFI, at fair value classified as Level 3:
| Fair Value | Discount Rate | Prepayment Rate | CDR | Loss Severity | ||||||||||||||||||||||||||||
| March 31, 2026 | $ | ( | ( | ( | ( | |||||||||||||||||||||||||||
| December 31, 2025 | $ | ( | ( | ( | ( | |||||||||||||||||||||||||||
Consumer Loans Valuation
Consumer loans are valued using internal discounted cash flow pricing models with inputs such as default rates, prepayments speeds and discount rates. Elevated (deflated) default rates or reduced (increased) recovery rates (particularly for unsecured portfolios) would depress (increase) fair value. Default rate changes are often inversely correlated with recovery rate adjustments. The following table summarizes certain information regarding the ranges and weighted averages of inputs (weighted by UPB) used in valuing consumer loans HFI, at fair value classified as Level 3 as of March 31, 2026:
| Fair Value | Discount Rate | Prepayment Rate | CDR | Loss Severity(A) | ||||||||||||||||||||||||||||
| SpringCastle | $ | ( | ( | ( | ( | |||||||||||||||||||||||||||
| Marcus | ( | ( | ( | |||||||||||||||||||||||||||||
| Upgrade | ( | ( | ( | |||||||||||||||||||||||||||||
| Consumer Loans HFI, at Fair Value | $ | |||||||||||||||||||||||||||||||
(A)Loss severity is the expected amount of future realized losses resulting from the ultimate liquidation of a particular loan, expressed as the net amount of realized loss relative to the outstanding loan balance in default.
The following table summarizes certain information regarding the ranges and weighted averages of inputs (weighted by UPB) used in valuing consumer loans HFI, at fair value classified as Level 3 as of December 31, 2025:
| Fair Value | Discount Rate | Prepayment Rate | CDR | Loss Severity(A) | ||||||||||||||||||||||||||||
| SpringCastle | $ | ( | ( | ( | ( | |||||||||||||||||||||||||||
| Marcus | ( | ( | ( | |||||||||||||||||||||||||||||
| Upgrade | ( | ( | ( | |||||||||||||||||||||||||||||
| Consumer Loans HFI, at Fair Value | $ | |||||||||||||||||||||||||||||||
(A)Loss severity is the expected amount of future realized losses resulting from the ultimate liquidation of a particular loan, expressed as the net amount of realized loss relative to the outstanding loan balance in default.
60
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
Residential Transition Loans and RTL Financing Liability Valuation
Rithm Capital classifies certain RTLs and related financing liability as Level 3 in the fair value hierarchy. Performing RTLs are valued using an income approach through internal pricing models to forecast cash flows with inputs such as default rates, prepayments speeds and discount rates, and may include adjustments based on consensus pricing (broker quotes). Non-performing RTLs, with UPB of $97.5 million and fair value of $85.2 million as of March 31, 2026 and UPB of $100.9 million and fair value of $89.6 million as of December 31, 2025, were valued using estimated liquidation cash flows, derived based on the estimated value of the collateral and adjusted for estimated recoveries, costs and time to liquidate the assets.
Significant increases (decreases) in default rates, loss severity assumptions or discount rates, in isolation, would result in a significantly lower (higher) fair value measurement. Generally, a change in default rate assumption is accompanied by a directionally similar change in loss severity assumptions.
The following table summarizes certain information regarding the weighted averages of inputs (weighted by fair value) used in valuing performing RTLs and related financing liability, at fair value classified as Level 3 as of March 31, 2026:
| Fair Value | Discount Rate | Prepayment Rate | CDR | Loss Severity | ||||||||||||||||||||||||||||
| RTLs | $ | ( | ( | ( | ||||||||||||||||||||||||||||
| RTL investments of consolidated entities - funds | ||||||||||||||||||||||||||||||||
RTL financing liability(A) | ||||||||||||||||||||||||||||||||
(A)Excludes $46.5 million of financing liability related to a strategic partnership for which the Company elected fair value option. As of March 31, 2026, the amortized cost approximated fair value.
The following table summarizes certain information regarding the weighted averages of inputs (weighted by fair value) used in valuing performing RTLs, at fair value classified as Level 3 as of December 31, 2025:
| Fair Value | Discount Rate | Prepayment Rate | CDR | Loss Severity | ||||||||||||||||||||||||||||
| RTLs | $ | ( | ( | ( | ||||||||||||||||||||||||||||
| RTL investments of consolidated entities - funds | ||||||||||||||||||||||||||||||||
RTL financing liability(A) | ||||||||||||||||||||||||||||||||
(A)Excludes $46.3 million of financing liability related to a strategic partnership for which the Company elected fair value option. As of December 31, 2025, the amortized cost approximated fair value.
Insurance Company Investments - Private Credit and Commercial Mortgage Loans Valuation
Private investments and commercial mortgage loans held for less than six months are generally measured at fair value using the transaction price, net of transaction costs, plus any accrued interest and upfront fees (including original issue discount) and warrant carve-out accretion, which the Company believes represents fair value at initial recognition. Such investments and loans are not subject to third-party valuation review unless a significant event or change in circumstances occurs that would indicate the transaction price is no longer representative of fair value. As of March 31, 2026 and December 31, 2025, the Company held fair value of $186.0 million and $218.6 million of such instruments, respectively.
For other private investments and commercial mortgage loans classified as Level 3 within the fair value hierarchy, fair value is determined using valuation techniques consistent with U.S. GAAP requirements, including income approaches (such as discounted cash flow analyses) and/or market approaches (such as the guideline public company method and guideline transaction method). These valuation techniques maximize the use of relevant observable inputs and minimize the use of unobservable inputs to the extent practicable.
Fair values are determined by independent third-party valuation specialists using income and market approaches. The valuation specialists may incorporate significant unobservable inputs, such as discount rates, recovery assumptions, valuation multiples, and liquidity adjustments, depending on the nature of the investment and the availability of market data. Since the valuation models used by these specialists are proprietary, the Company does not have visibility into all unobservable inputs. The primary unobservable input evaluated by the Company is the discount rate used to estimate the present value of expected cash flows. Higher discount rates generally decrease fair value, while lower discount rates increase fair value.
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| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
Since these inputs are not directly observable and often reflect borrower or issuer‑specific factors, the resulting fair value measurements are inherently subjective. Unobservable inputs used in the valuation models can be interrelated. For example, weaker operating performance may be associated with higher discount rates, lower recovery expectations or reduced valuation multiples, which can magnify the effect of changes in inputs on the fair value measurement. The Company reviews the methodologies and assumptions provided by its valuation specialists and assesses whether the resulting fair values are reasonable in the context of current market conditions.
The following table summarizes certain information regarding the range and weighted average of the discount rates (weighted by fair value) used in valuing private credit, at fair value and commercial mortgage loans, HFI, at fair value classified as Level 3:
| Fair Value | Discount Rate | |||||||||||||
| March 31, 2026 | $ | ( | ||||||||||||
| December 31, 2025 | $ | ( | ||||||||||||
Funds Withheld and Modified Coinsurance Agreement Embedded Derivatives
Funds withheld and modified coinsurance agreement embedded derivatives represent the right to receive or obligation to pay the total return on the assets supporting the funds withheld and modified coinsurance agreement and are analogous to a total return swap with a floating rate leg. The fair value of embedded derivatives on funds withheld and modified coinsurance agreement is measured as the unrealized gain (loss) on the underlying assets and classified as Level 3.
FIA - Embedded Derivative
Significant unobservable inputs used in the FIA embedded derivative valuation include:
•Non-performance risk - For contracts Crestline issues, it uses the credit spread, relative to the U.S. Treasury curve based on Crestline's public credit rating as of the valuation date. This represents Crestline's credit risk for use in the estimate of the fair value of embedded derivatives.
•Option budget - Crestline assumes future hedge costs in the derivative's fair value estimate. The level of option budgets determines the future costs of the options and impacts future policyholder account value growth.
•Policyholder behavior - Crestline regularly reviews the full withdrawal (surrender rate) assumptions. These are based on initial pricing assumptions updated for actual experience. Actual experience may be limited for recently issued products.
Derivatives and Hedging Valuation
Rithm Capital enters into economic hedges including interest rate swaps, caps and TBAs, which are categorized as Level 2 in the valuation hierarchy. Rithm Capital generally values such derivatives using quotations, similarly to the method of valuation used for Rithm Capital’s other assets that are classified as Level 2 in the fair value hierarchy.
Other commitments relate to (i) an agreement entered into by a subsidiary of Rithm Capital with its affiliate requiring a payment under certain circumstances dependent upon amounts realized from an investment of the affiliate and (ii) a third-party co-investor’s redemption right of its investment in a consolidated joint venture. These are classified as Level 3 in the fair value hierarchy, valued (i) at the excess of cost basis over the intrinsic value of the underlying investment and (ii) using a simulated Monte Carlo model by independent pricing services, respectively. In addition, Rithm Capital enters into IRLCs, which are valued using internal pricing models (i) incorporating market pricing for instruments with similar characteristics, (ii) estimating the fair value of the servicing rights expected to be recorded at sale of the loan and (iii) adjusting for anticipated loan funding probability. Both the fair value of servicing rights expected to be recorded at the date of sale of the loan and anticipated loan funding probability are significant unobservable inputs and therefore, IRLCs are classified as Level 3 in the fair value hierarchy.
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| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
The following table summarizes certain information regarding the ranges and weighted averages of inputs used in valuing IRLCs:
| Fair Value | Loan Funding Probability | Fair Value of Initial Servicing Rights (bps) | ||||||||||||||||||
| March 31, 2026 | $ | ( | ( | |||||||||||||||||
| December 31, 2025 | $ | ( | ( | |||||||||||||||||
Asset-Backed Securities Issued
As of March 31, 2026 and December 31, 2025, Rithm Capital was the primary beneficiary of the SCFT 2020-A (as defined in Note 19) securitization, and therefore, Rithm Capital’s consolidated balance sheets include the asset-backed securities issued by the trust in the SCFT 2020-A securitization. Rithm Capital elected the FVO for the securities and valued them consistently with non-Agency securities described above.
The following table summarizes certain information regarding the ranges and weighted averages of inputs used in valuing asset-backed securities issued:
| Fair Value | Discount Rate | Prepayment Rate | CDR | Loss Severity | ||||||||||||||||||||||||||||
| March 31, 2026 | $ | |||||||||||||||||||||||||||||||
| December 31, 2025 | $ | |||||||||||||||||||||||||||||||
Notes Receivable, Notes Receivable Financing Liability and Loans Receivable
From time to time, Rithm Capital purchases notes and loans receivable that are generally collateralized by CRE assets. Rithm Capital generally uses internal discounted cash flow pricing models to estimate the fair value of notes receivable, notes receivable financing liability and loans receivable. Due to the fact that the fair value of Rithm Capital’s notes receivable, notes receivable financing liability and loans receivable are based significantly on unobservable inputs, these are classified as Level 3 in the fair value hierarchy.
Future cash flows are generally estimated using contractual economic terms as well as significant unobservable inputs, such as the underlying collateral performance. Other significant unobservable inputs include discount rates which estimate the market participants’ required rates of return.
The following table summarizes certain information regarding the fair value and significant inputs used in valuing Rithm Capital’s notes receivable, notes receivable financing liability and loans receivable:
| Fair Value | Discount Rate | |||||||||||||
| March 31, 2026 | ||||||||||||||
| Notes receivable | $ | ( | ||||||||||||
| Notes receivable financing liability | ||||||||||||||
| Loans receivable | ||||||||||||||
| December 31, 2025 | ||||||||||||||
| Notes receivable | $ | ( | ||||||||||||
| Notes receivable financing liability | ||||||||||||||
| Loans receivable | ||||||||||||||
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| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
Equity Investments at Fair Value
The Company holds a 70 % interest in a limited liability company (the “Credit Risk Transfer LLC”), structured as a credit risk transfer transaction, which directly or indirectly holds and finances exposures to residential mortgage loans through warehouse facilities and repurchase agreements. This equity investment is measured at fair value under the fair value option election. The investment is valued using an internal discounted cash flow pricing model to estimate the fair value of the investment. As of March 31, 2026 and December 31, 2025, the fair value of the investment was $194.1 million and $194.3 million, respectively. As the discount rates of 10.3 % and 10.4 % used to estimate the fair value of the investment as of March 31, 2026 and December 31, 2025, respectively, were significant unobservable inputs, this investment was classified as Level 3 in the fair value hierarchy.
Other Consolidated Funds
The Company has an interest in a consolidated joint venture that holds an investment in an affiliated real estate fund. The Company measures the investment using the NAV per share pursuant to the practical expedient. While the NAV is intended to reflect the fair value of the underlying fund’s net assets, such value is subject to estimation uncertainty and may differ from values that would be realized upon a liquidation of the underlying investments.
The following table summarizes the fair value of the investments by fund type and ability to redeem such investments:
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||
| Fund Type | Fair Value | Redemption Frequency | Redemption Notice Period | Fair Value | Redemption Frequency | Redemption Notice Period | ||||||||||||||||||||||||||||||||
| Open-ended | $ | Monthly | $ | Monthly | ||||||||||||||||||||||||||||||||||
Consolidated CFE - Funds
Sculptor’s consolidated structured alternative investment solution, a CFE, holds investments in funds measured at fair value using the NAV per share of the underlying funds, as a practical expedient.
The following table summarizes the fair value of the investments by fund type and ability to redeem such investments:
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||
Fund Type(A) | Fair Value | Redemption Frequency | Redemption Notice Period | Fair Value | Redemption Frequency | Redemption Notice Period | ||||||||||||||||||||||||||||||||
| Open-ended | $ | Monthly – Annually | $ | Monthly - Annually | ||||||||||||||||||||||||||||||||||
| Closed-ended | None(B) | N/A | None(B) | N/A | ||||||||||||||||||||||||||||||||||
| Total | $ | $ | ||||||||||||||||||||||||||||||||||||
(A)The structured alternative investment solution invests in both open-ended and closed-ended funds. The investments in each fund may represent investments in a particular tranche of such fund subject to different withdrawal rights.
(B)100 % of these investments cannot be redeemed, as distributions will be received as the underlying assets are liquidated, which is expected to be approximately 7 to 9 years from inception.
As of March 31, 2026 and December 31, 2025, the structured alternative investment solution had unfunded commitments of $28.6 million and $28.1 million, respectively, related to the closed-ended funds presented in the table above, which will be funded by capital within the consolidated funds from its underlying open-ended funds and liquid assets.
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| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
As of March 31, 2026 and December 31, 2025, notes payable of the structured alternative investment solution with a fair value of $200.8 million and $203.7 million, respectively, were valued using independent pricing services and are classified as Level 3. The Company measures the financial liabilities of its consolidated structured alternative investment solution based on the fair value of the financial assets of the consolidated entity under the CFE election, as the Company believes the fair value of the financial assets is more observable. The notes payable of consolidated CLOs had a fair value of $767.5 million and $751.6 million as of March 31, 2026 and December 31, 2025, respectively, and were valued using independent pricing services. As of March 31, 2026 and December 31, 2025, the Company measured the financial liabilities of its consolidated CLOs based on the fair value of the financial assets of its consolidated CLOs under the CFE election, as the Company believes the fair value of the financial assets were more observable and were classified as Level 2. The Company performs analytical procedures and compares independent pricing service valuations to other vendors’ pricing as applicable. The Company also performs due diligence reviews on independent pricing services on an annual basis and performs other due diligence procedures as may be deemed necessary. Notes payable of such consolidated CFEs are included in notes payable, at fair value and other liabilities on the Company’s consolidated balance sheets. Unrealized gain (loss) from changes in fair value and related interest is included in realized and unrealized gains (losses), net in the Company’s consolidated statements of operations. Refer to Note 19 for further details.
Consolidated CFE - Loan Securitizations
Rithm Capital has securitized certain residential mortgage loans and RTLs which are held as part of consolidated CFEs. A CFE is a VIE that holds financial assets, issues beneficial interests in those assets and has no more than nominal equity, and the beneficial interests have contractual recourse only to the related assets of the CFE. GAAP allows entities to elect to measure both the financial assets and financial liabilities of the CFE using the more observable of the fair value of the financial assets and the fair value of the financial liabilities of the CFE. Rithm Capital has elected the FVO for initial and subsequent recognition of the debt issued by its consolidated securitization trusts and has determined that the consolidated securitization trusts meet the definition of a CFE. See Note 19 for further details regarding VIEs and securitization trusts. Rithm Capital determined the inputs to the fair value measurement of the financial liabilities of its consolidated CFEs to be more observable than those of the financial assets and, as a result, has used the fair value of the financial liabilities of the consolidated CFE to measure the fair value of the financial assets of the consolidated CFE. Refer to Note 2 for the accounting policies of consolidated entities. The fair value of the debt issued by the consolidated CFE is typically valued using external pricing data, which includes third-party valuations.
The securitized residential mortgage loans and RTLs, which are assets of the consolidated CFEs, are included in investments, at fair value and other assets, on the Company’s consolidated balance sheets. The notes issued by the consolidated CFEs are included in notes payable, at fair value and other liabilities on the Company’s consolidated balance sheets. Unrealized gains (losses) from changes in fair value of the notes issued and assets of the consolidated CFEs and related interest are included in realized and unrealized gains (losses), net in the Company’s consolidated statements of operations. The securitized residential mortgage loans and the notes issued by the Company’s CFEs are classified as Level 2.
| Residential Mortgage Loan Securitizations | Investments at Fair Value | Notes Payable at Fair Value | ||||||||||||
| March 31, 2026 | $ | $ | ||||||||||||
| December 31, 2025 | $ | $ | ||||||||||||
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| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
Rithm Capital classifies securitized RTLs as Level 3 in the fair value hierarchy because the notes payable are valued based significantly on unobservable inputs. The valuation methodology is in line with non-Agency securities described above. The following table summarizes the inputs (weighted by fair value) used in valuing the notes payable:
| Residential Transition Loans Securitizations | Investments at Fair Value | Notes Payable at Fair Value | Spread(A) | Prepayment Rate(B) | CDR(C) | Loss Severity(D) | ||||||||||||||||||||||||||||||||
| March 31, 2026 | $ | $ | ( | ( | ||||||||||||||||||||||||||||||||||
| December 31, 2025 | $ | $ | ( | ( | ||||||||||||||||||||||||||||||||||
(A)Represents the yield in excess of the risk-free rate.
(B)Represents the annualized rate of the prepayments as a percentage of the total principal balance of the pool.
(C)Represents the annualized rate of the involuntary prepayments (defaults) as a percentage of the total principal balance of the pool.
Assets and Liabilities Measured at Fair Value on a Non-recurring Basis
Certain assets are measured at fair value on a non-recurring basis; that is, they are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances, such as when there is evidence of impairment. For residential mortgage loans HFS, foreclosed real estate accounted for as REO, SFR properties and certain CRE, Rithm Capital measures the assets at the lower of cost or fair value which may require, from time to time, a non-recurring fair value adjustment.
As of March 31, 2026 and December 31, 2025, assets measured at fair value on a non-recurring basis were $66.2 million and $67.8 million, respectively, which primarily related to residential mortgage loans, HFS. The fair value of Rithm Capital’s residential mortgage loans, HFS is estimated based on a discounted cash flow model analysis using internal pricing models and is categorized within Level 3 of the fair value hierarchy.
The following table summarizes the inputs (weighted by fair value) used in valuing these residential mortgage loans:
| Fair Value | Discount Rate | Weighted Average Life (Years)(A) | Prepayment Rate | CDR(B) | Loss Severity(C) | |||||||||||||||||||||||||||||||||
| March 31, 2026 | ||||||||||||||||||||||||||||||||||||||
| Performing loans | $ | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Non-performing loans | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||
| Total | $ | |||||||||||||||||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||||||||||||||
| Performing loans | $ | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Non-performing loans | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||
| Total | $ | |||||||||||||||||||||||||||||||||||||
(A)The weighted average life is based on the expected timing of the receipt of cash flows.
(B)Represents the annualized rate of the involuntary prepayments (defaults) as a percentage of the total principal balance.
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| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
19. VARIABLE INTEREST ENTITIES
In the normal course of business, Rithm Capital enters into transactions with special purpose entities (“SPEs” and each, an “SPE”), which primarily consist of trusts established for a limited purpose. The SPEs have been formed for the purpose of transactions in which the Company transfers assets into an SPE in return for various forms of debt obligations supported by those assets. In these transactions, the Company typically receives cash and/or other interests in the SPE as proceeds for the transferred assets. The Company retains the right to service the transferred receivables. The Company first evaluates whether it holds a variable interest in the entity. Where the Company has a variable interest, it is required to determine whether the entity is a VIE or a VOE, the classification of which will determine the consolidation model that the Company is required to follow when determining whether it should consolidate the entity.
VIEs are defined as entities in which (i) equity at risk investors do not have the characteristics of a controlling financial interest, (ii) there is not sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties or (iii) substantially all of the activities of the entity are performed on behalf of the party with disproportionately few voting rights. Where an entity does not have the characteristics of a VIE, it is a VOE. A VIE is required to be consolidated by the primary beneficiary, which is defined as the party that has the power to direct the activities of a VIE that most significantly impact its economic performance and has the obligation to absorb losses or the right to receive benefits from the VIE that could be potentially significant to the VIE.
To assess whether Rithm Capital has the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, Rithm Capital considers all the facts and circumstances, including its role in establishing the VIE and its ongoing rights and responsibilities. This assessment includes identifying (i) the activities that most significantly impact the VIE’s economic performance and (ii) which party, if any, has power over those activities. To assess whether Rithm Capital has the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE, Rithm Capital considers all of its economic interests and applies judgment in determining whether these interests, individually or in the aggregate, are considered potentially significant to the VIE. When an SPE meets the definition of a VIE and the Company determines that it is the primary beneficiary, the Company consolidates the SPE in its consolidated financial statements.
For certain consolidated VIEs that meet the definition of a CFE, which is a VIE that holds financial assets, issues beneficial interests in those assets and has no more than nominal equity, Rithm Capital has elected to account for the assets and liabilities of these entities under the CFE measurement alternative. The CFE measurement alternative allows companies to elect to measure both the financial assets and financial liabilities of a CFE using the more observable of the fair value of the financial assets or fair value of the financial liabilities. The net equity in an entity accounted for under the CFE election effectively represents the fair value of the beneficial interests Rithm Capital owns in the entity. The assets of the consolidated CFEs can only be used to settle obligations and liabilities of these consolidated CFEs and are not available for general use by the Company. The liabilities of these consolidated CFEs are liabilities only of these entities and creditors have no recourse to Rithm Capital Corp. for the consolidated CFEs’ liabilities.
Consolidated VIEs
The assets of consolidated VIEs may only be used to settle obligations of these entities. There is no recourse to Rithm Capital Corp. for the consolidated VIEs’ liabilities.
Advance Purchaser
Rithm Capital, through a taxable wholly owned subsidiary, is the managing member of Advance Purchaser and owns approximately 89.3 % of Advance Purchaser as of March 31, 2026. Rithm Capital is deemed to be the primary beneficiary of Advance Purchaser as a result of its ability to direct activities that most significantly impact the economic performance of the entities and its ownership of a significant equity investment.
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| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
Newrez Joint Ventures
A wholly owned subsidiary of Newrez, Newrez Ventures LLC (formerly known as Shelter Mortgage Company LLC) (“Newrez Ventures”), is a mortgage originator specializing in retail originations. Newrez Ventures operates its business through a series of joint ventures (“Newrez Joint Ventures”) and is deemed to be the primary beneficiary of such Newrez Joint Ventures as a result of its ability to direct activities that most significantly impact the economic performance of the Newrez Joint Venture entities and its ownership of a significant equity investment.
Residential Mortgage Loan Securitizations
The Company securitizes, sells and services residential mortgage loans. Securitization transactions typically involve the use of VIEs and are accounted for either as sales or as secured financings. Certain of these activities may involve SPEs which, by their nature, are deemed to be VIEs.
Rithm Capital sells pools of conforming mortgage loans through Agency sponsored programs with the servicing retained by Newrez. The Company has several financing vehicles in the form of mortgage loan participation and sale agreements with financial institutions, or purchasers, to sell pools of agency residential mortgage loans.
Certain entities were formed to acquire, receive, participate, hold, release and dispose of participation interests in certain of Newrez’s residential mortgage loans HFS (“MLHFS PC”). These facilities transfer the MLHFS PC in exchange for cash. Newrez is the primary beneficiary of the VIEs and therefore consolidates the SPEs. The transferred MLHFS PC is classified on the consolidated balance sheets as residential mortgage loans, HFS and the related warehouse credit facility liabilities as part of secured financing agreements. Newrez retains the risks and benefits associated with the assets transferred to the SPEs.
Rithm Capital consolidated a securitization of mortgage loans secured by certain SFR properties (the “2022-SFR2 Securitization”), classified as a VIE. During the first quarter of 2026, the Company repaid the outstanding securitized debt, resulting in the termination of the 2022-SFR2 Securitization.
Consumer Loan Companies
Rithm Capital owns a 100% interest in a portfolio of consumer loans held through certain limited liability entities (the “Consumer Loan Companies”), which consolidate certain securitization vehicles (the “Consumer Loan SPVs”) that hold consumer loans and issue asset-backed notes collateralized by those loans. On September 25, 2020, the Company sponsored a securitization of a portfolio of consumer loans through these structures, which issued $663.0 million of asset-backed notes (“SCFT 2020-A”) and retained a residual interest in the securitized loans for risk retention purposes. The Consumer Loan SPVs are classified as VIEs, and the Company, through the Consumer Loan Companies, is the primary beneficiary and therefore consolidates the VIEs, as it has the power to redeem the notes and liquidate the structure and has the obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIEs.
CRE, Asset Management and Other
In the second quarter of 2024, Sculptor launched a CLO equity investment platform to manage investments in the equity tranches of Sculptor managed CLOs in the U.S. and Europe (“Sculptor Loan Financing Partners”). The Company is the primary beneficiary of the Sculptor Loan Financing Partners, as it has both (i) the power to direct the activities of a VIE that most significantly impact its economic performance and (ii) the obligation to absorb losses or the right to receive benefits from the VIE that could be potentially significant to the VIE.
In the first quarter of 2025, the Company entered into a joint venture with a third party to invest in an affiliated fund. The Company is the primary beneficiary of the joint venture, classified as a VIE, as it has power over the VIE’s most significant activities and has an obligation to absorb losses and receive benefits from the VIE that could potentially be significant. Under certain circumstances, the Company’s interest in the joint venture could be subordinated up to a certain amount if the specified minimum return is not achieved upon the third party’s interest redemption.
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| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
Rithm Capital has investments in various CRE entities, including joint ventures that own CRE properties and real estate-related funds, which are classified as VIEs. The Company holds substantially all of the economic interests in these VIEs and, as the primary beneficiary, has a controlling financial interest and therefore consolidates these VIEs. Additionally, in connection with the Elecor Acquisition, the Company formed Rithm PGRE Aggregator LP and Rithm PGRE Aggregator II LP (collectively, the “Aggregators”), to indirectly hold interests in a portfolio of CRE assets. The Aggregators are VIEs for which the Company is the primary beneficiary, as it holds substantially all of the economic interests and has the power to direct the activities that most significantly impact their economic performance. As a result, the Company consolidates the Aggregators. The Aggregators’ total assets and total liabilities were $5.8 billion and $4.2 billion, respectively, as of March 31, 2026, and $5.8 billion and $4.2 billion, respectively, as of December 31, 2025. The table below presents, within the CRE column, the carrying value and classification of the assets and liabilities of consolidated joint ventures that own CRE properties and are classified as VIEs, which are included in the Aggregators’ total assets and liabilities on the consolidated balance sheets.
In the first quarter of 2025, the Company entered into a joint venture with Rithm Property Trust, a related party, to acquire a certain note receivable. While power is shared between the Company and Rithm Property Trust, the Company is the primary beneficiary and consolidates the VIE, as it is most closely associated with the VIE under the related-party tiebreaker guidance.
SPAC
As noted in Note 1, in the first quarter of 2025, the SPAC sponsored by the Company completed its IPO raising gross proceeds of $230.0 million (including the full exercise of the underwriter’s overallotment option) related to 23,000,000 units, each consisting of one Class A ordinary share and one-third of one redeemable warrant, totaling 23,000,000 Class A ordinary shares and 7,666,667 of one redeemable warrant classified as equity. The Company consolidates the SPAC, which is classified as a VIE. Additionally, the Company, through its consolidated subsidiary Rithm Acquisition Corp Sponsor LLC (the “Sponsor”), owns the majority of the SPAC’s outstanding Class B ordinary shares and has power to direct the activities of the VIE that most significantly impact its economic performance making it the primary beneficiary of the VIE. Pursuant to the terms of the SPAC’s governing documents, the SPAC is required to complete an initial business combination within 24 months of the IPO (or 27 months from the IPO if the SPAC has an executed a letter of intent, agreement in principle or definitive agreement for its initial business combination within 24 months from the IPO), which is February 27, 2027; however, the SPAC may seek shareholder approval to extend the date by which it must complete an initial business combination. If the SPAC is unable to complete a business combination by such date, it will be required to cease operations and redeem 100% of the outstanding Class A ordinary shares at a per-share price equal to the aggregate amount held in the trust account, including interest earned, divided by the number of then outstanding Class A ordinary shares. As of March 31, 2026, the trust account held approximately $240.7 million of cash, restricted solely for use in completing a business combination or redeeming the Class A ordinary shares and is not available for general corporate purposes.
Consolidated Entities
Loan Securitizations - RTLs
Rithm Capital sponsored securitization trusts, classified as VIEs, that issue securitized debt collateralized by RTLs and for which a wholly owned subsidiary of Rithm Capital serves as asset manager. Rithm Capital acquired all of the most subordinated trust certificates. Rithm Capital concluded that the most subordinate tranche trust certificates absorb a majority of the trusts’ expected losses or receive a majority of the trusts’ expected residual returns. Rithm Capital also concluded that the securitization’s asset manager has the ability to direct activities that could significantly impact the trusts’ economic performance. As a result, Rithm Capital consolidates such trusts.
The assets of these consolidated loan securitization trusts may only be used to settle obligations of these entities and are not available to creditors of the Company. The investors in these consolidated loan securitizations have no recourse against the assets of the Company, and there is no recourse to the Company for the consolidated entities’ liabilities.
As of March 31, 2026, these trusts’ assets consist of pools of performing, adjustable-rate and fixed-rate, interest-only, RTLs (construction, renovation and bridge), secured by a first lien or a first and second lien on a non-owner occupied mortgaged property with original terms to maturity of up to 120 months, with an aggregate UPB of approximately $904.3 million and an aggregate principal limit of approximately $1.1 billion. Refer to Note 18 regarding the fair value measurements of consolidated loan securitizations, classified as CFEs.
69
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
Loan Securitizations - Residential Mortgage Loans
Rithm Capital sponsors the formation of certain mortgage securitization trusts, considered VIEs, to securitize performing Non-QM loans and seasoned mortgage loans. The Company consolidates certain trusts for which it is the primary beneficiary. The Company acts as the primary servicer for such trusts and therefore has the ability to direct activities that could significantly impact these trusts’ economic performance. Generally, the Company retains a vertical tranche of notes issued by these trusts for risk retention purposes in addition to the most subordinated tranches and “interest only” interests. Such retained interests were eliminated in consolidation. Depending on the type of securitization, the underlying pool of assets may consist of performing, amortizing and interest only, fixed rate and adjustable rate mortgage loans secured by first liens on single family residential properties, planned unit developments and condominiums.
The assets of these consolidated loan securitizations may only be used to settle obligations of these entities and are not available to creditors of the Company. The investors in these consolidated loan securitizations have no recourse against the assets of the Company, and there is no recourse to the Company for the consolidated entities’ liabilities.
During the first quarter of 2026, the Company sold the majority of its “interest only” securities held in one Non-QM loan securitization trust, and it now holds such securities for risk retention purposes only. The Company is no longer the primary beneficiary as it does not hold a significant interest in this trust. As a result of deconsolidation, the Company derecognized $501.7 million of assets and $451.8 million of liabilities of consolidated CFEs and recognized a loss of $0.6 million presented in realized and unrealized gains (losses), net in the consolidated statements of operations. The Company continues to recognize $24.1 million of notes held at fair value as of March 31, 2026.
As of March 31, 2026, the notes payable, at fair value of consolidated CFEs due to third parties had a fair value of $2.7 billion. Rithm Capital’s retained interest in the consolidated CFEs was $0.4 billion. Refer to Note 18 regarding the fair value measurements of consolidated loan securitizations, classified as CFEs.
Funds
In the ordinary course of business, Sculptor sponsors the formation of consolidated funds that are considered VIEs. The Company consolidates certain VIEs for which it is the primary beneficiary either directly or indirectly through a consolidated entity. The assets of these consolidated funds may only be used to settle obligations of these entities and are not available to creditors of the Company, including Sculptor. The investors in these consolidated funds have no recourse against the assets of the Company, including Sculptor. There is no recourse to the Company, including to Sculptor, for the consolidated funds’ liabilities.
The Company, through Sculptor, consolidates a structured alternative investment solution, which issued notes in the aggregate principal amount of $350.0 million, of which approximately $127.8 million were retained by Sculptor and eliminated in consolidation. The retained notes consist of $20.0 million Class A notes, $20.0 million of Class C notes and $87.8 million of subordinated notes. As of March 31, 2026, the consolidated notes payable due to third parties had a fair value of $200.8 million
Sculptor’s structured alternative investment solution entered into a credit facility maturing March 18, 2027. This credit facility is capped at $20.0 million of total borrowing capacity per quarter, bearing interest of SOFR plus margin of 3.0 %. The facility is also subject to an annual 1.15 % unused commitment fee. As of March 31, 2026, the facility has a capacity of $48.0 million, on which the consolidated funds have not drawn.
Additionally, the Company consolidates two CLO funds, managed by Sculptor, which issued notes in the aggregate principal amount of $814.4 million, of which approximately $76.3 million, were retained by the Company and eliminated in consolidation. As of March 31, 2026, the consolidated notes payable due to third parties had a fair value of $767.5 million. The Company’s investments in CLOs are generally subordinated to other interests in the entities. Investors in the CLOs have no recourse against the Company for any losses incurred by the CLOs. The Company’s maximum exposure to loss is limited to the retained interest.
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| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
During the third quarter of 2025, the Company entered into a strategic investment partnership with a third party investor to fund the acquisition of RTLs, originated and serviced by the Company’s subsidiary Genesis. The partnership is managed by the Company’s affiliate and is classified as a VIE. The Company is the primary beneficiary of the VIE as it has both (i) the power to direct the activities of a VIE that most significantly impact its economic performance and (ii) the obligation to absorb losses or the right to receive benefits from the VIE that could be potentially significant to the VIE. Under certain circumstances, the Company’s interest in the strategic partnership could be subordinated up to a certain amount if the third party’s interest is not fully redeemed including achievement of a specified minimum return upon its redemption. The assets and liabilities of this partnership are presented within assets and liabilities of consolidated entities on the consolidated balance sheets.
See Note 17 and Note 18 regarding the financing and fair value measurements of consolidated funds, respectively.
The tables below present the carrying value and classification of the assets and liabilities of consolidated VIEs on the consolidated balance sheets:
| Advance Purchaser | Newrez Joint Ventures | Residential Mortgage Loans | Consumer Loan Companies | CRE, Asset Management and Other | SPAC | Consolidated Entities(A) | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| March 31, 2026 | Loan Securitizations - Residential Transition Loans | Loan Securitizations - Residential Mortgage Loans | Consolidated Funds | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Servicer advance investments, at fair value | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgage loans, HFS, at fair value | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Consumer loans | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Real estate, net | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Assets of consolidated entities - investments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restricted cash | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Assets | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Secured financing agreements | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Secured notes and bonds payable | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes payable and secured financing of consolidated entities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accrued expenses and other liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Liabilities | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(A)Reflect assets of consolidated entities - investments, at fair value and other assets and liabilities of consolidated entities - notes payable, at fair value and other liabilities on the consolidated balance sheets.
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| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
| Advance Purchaser | Newrez Joint Ventures | Residential Mortgage Loans | Consumer Loan Companies | CRE, Asset Management and Other | SPAC | Consolidated Entities(A) | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2025 | Loan Securitizations - Residential Transition Loans | Loan Securitizations - Residential Mortgage Loans | Consolidated Funds | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Servicer advance investments, at fair value | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgage loans, HFS, at fair value | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Consumer loans | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Real estate, net | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Assets of consolidated entities - investments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restricted cash | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Assets | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Secured financing agreements | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Secured notes and bonds payable | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes payable and secured financing of consolidated entities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accrued expenses and other liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Liabilities | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(A)Reflect assets of consolidated entities - investments, at fair value and other assets and liabilities of consolidated entities - notes payable, at fair value and other liabilities on the consolidated balance sheets.
Non-Consolidated VIEs
The Company transfers residential mortgage loans to securitization trusts, classified as VIEs, and retains the right to service the transferred loans. The Company also retains interests in such VIEs pursuant to required risk retention regulations. The Company does not consolidate such VIEs, as it is not considered the primary beneficiary. The following table summarizes the carrying value of notes issued by unconsolidated VIEs and retained by the Company, which reflects the Company’s maximum exposure to loss, as well as the UPB of transferred loans. The retained notes are presented as non-Agency securities, at fair value within other assets on the consolidated balance sheets:
| March 31, 2026 | December 31, 2025 | |||||||||||||
| Residential mortgage loan UPB and other collateral | $ | $ | ||||||||||||
Weighted average delinquency(A) | ||||||||||||||
| Net credit losses | $ | $ | ||||||||||||
| Face amount of debt held by third parties | $ | $ | ||||||||||||
Carrying value of notes retained by Rithm Capital(B)(C) | $ | $ | ||||||||||||
| Cash flows received by Rithm Capital on these notes | $ | $ | ||||||||||||
(A)Represents the percentage of the UPB that is 60
(B)Includes real estate bonds retained pursuant to required risk retention regulations.
(C)Classified within Level 3 of the fair value hierarchy as the valuation is based on certain unobservable inputs including discount rate, prepayment rates and loss severity. See Note 18 for details on unobservable inputs.
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| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
The Company’s involvement with other VIEs that are not consolidated is primarily through providing asset management services and, in certain cases, through equity investments. The Company is not the primary beneficiary of these VIEs, because it does not have the power to direct the activities that most significantly affect their economic performance. The Company’s maximum exposure to loss associated with its involvement in non-consolidated VIEs is limited to the carrying value of its investments, income and fees receivable, unearned income subject to potential clawback, unfunded and other contractual commitments, and membership interests, as applicable. The Company does not provide, nor is it required to provide, any non-contractual financial or other support to non-consolidated VIEs beyond its contractual capital and other commitments.
| March 31, 2026 | December 31, 2025 | |||||||||||||
| Unearned income and fees | $ | $ | ||||||||||||
| Income and fees receivable | ||||||||||||||
| Investments in non-consolidated VIEs | ||||||||||||||
Unfunded commitments(A) | ||||||||||||||
| Other commitments | ||||||||||||||
| Maximum Exposure to Loss | $ | $ | ||||||||||||
(A)Unfunded commitments include commitments from certain current and former employees and managing directors of $129.9 million and $131.2 million as of March 31, 2026 and December 31, 2025, respectively.
20. EXPENSES, REALIZED AND UNREALIZED GAINS (LOSSES), NET AND OTHER
Other revenue consists of the following:
| Three Months Ended March 31, | |||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||
| Property and maintenance | $ | $ | |||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||
| Other Revenue | $ | $ | |||||||||||||||||||||||||||
General, Administrative and Operating expenses consists of the following:
| Three Months Ended March 31, | |||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||
| Legal and professional | $ | $ | |||||||||||||||||||||||||||
| Loan origination | |||||||||||||||||||||||||||||
| Occupancy | |||||||||||||||||||||||||||||
| Subservicing | |||||||||||||||||||||||||||||
| Loan servicing | |||||||||||||||||||||||||||||
| Property and maintenance | |||||||||||||||||||||||||||||
| Information technology | |||||||||||||||||||||||||||||
| Insurance-related expenses | |||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||
| General, Administrative and Operating Expenses | $ | $ | |||||||||||||||||||||||||||
73
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
Other Income (Loss)
The following table summarizes the components of other income (loss):
| Three Months Ended March 31, | |||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||
Real estate and other securities | $ | ( | $ | ||||||||||||||||||||||||||
Residential mortgage loans and REO | ( | ||||||||||||||||||||||||||||
Derivative and hedging instruments | ( | ||||||||||||||||||||||||||||
| Notes and bonds payable | ( | ||||||||||||||||||||||||||||
Consolidated entities(A) | |||||||||||||||||||||||||||||
| Insurance company investments | |||||||||||||||||||||||||||||
Other(B) | ( | ||||||||||||||||||||||||||||
| Realized and unrealized losses, net | ( | ( | |||||||||||||||||||||||||||
| Other income, net | |||||||||||||||||||||||||||||
| Other Income, Net | $ | $ | |||||||||||||||||||||||||||
(A)Includes change in the fair value of the consolidated CFEs’ financial assets and liabilities and related interest and other income.
(B)Includes Excess MSRs, servicer advance investments, consumer loans, RTLs and other.
21. ASSET MANAGEMENT REVENUE
The following table presents the composition of asset management revenue:
| Three Months Ended March 31, | |||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||
| Management fees | $ | $ | |||||||||||||||||||||||||||
| Incentive income | |||||||||||||||||||||||||||||
| Total Asset Management Revenue | $ | $ | |||||||||||||||||||||||||||
The following table presents the composition of the Company’s income and fees receivable:
| March 31, 2026 | December 31, 2025 | ||||||||||
| Management fees receivable | $ | $ | |||||||||
| Incentive income receivable | |||||||||||
| Total Income and Fees Receivable | $ | $ | |||||||||
The Company recognizes management fees over the period in which the performance obligation is satisfied, and such management fees are generally recognized at the end of each reporting period. The Company records incentive income when it is probable that a significant reversal of income will not occur. The majority of management fees and incentive income receivable at each balance sheet date is generally collected during the following quarter.
The following table presents the Company’s unearned income and fees:
| March 31, 2026 | December 31, 2025 | ||||||||||
| Unearned management fees | $ | $ | |||||||||
| Unearned incentive income | |||||||||||
| Total Unearned Income and Fees | $ | $ | |||||||||
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| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
22. NON-CONTROLLING INTERESTS
Non-controlling interests represent the ownership interests in certain consolidated subsidiaries held by entities or persons other than Rithm Capital, and it is presented as a separate component of equity on the Company’s consolidated balance sheets. These interests are related to non-controlling interests in consolidated entities that hold servicer advance investments, the Newrez Joint Ventures, consumer loans (Note 8), Excess MSRs, asset management investments, commercial real estate investments and other investments.
Others’ interests in the equity of consolidated subsidiaries is computed as follows:
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| Total Consolidated Equity | Others’ Ownership Interest | Non-controlling Interest in Equity of Consolidated Subsidiaries | Total Consolidated Equity | Others’ Ownership Interest | Non-controlling Interest in Equity of Consolidated Subsidiaries | ||||||||||||||||||||||||||||||
| Advance Purchaser | $ | % | $ | $ | % | $ | |||||||||||||||||||||||||||||
| Newrez Joint Ventures | % | % | |||||||||||||||||||||||||||||||||
| Excess MSRs | % | % | |||||||||||||||||||||||||||||||||
| Other investments | % | % | |||||||||||||||||||||||||||||||||
| Asset management | n/m(A) | n/m(A) | |||||||||||||||||||||||||||||||||
| Commercial real estate | n/m(B)(C) | n/m(B)(C) | |||||||||||||||||||||||||||||||||
| $ | $ | ||||||||||||||||||||||||||||||||||
Others’ interests in the net income of consolidated subsidiaries is computed as follows:
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Income (Loss) | Others’ Ownership Interest as a Percent of Total | Non-controlling Interest in Income (Loss) of Consolidated Subsidiaries | Net Income (Loss) | Others’ Ownership Interest as a Percent of Total | Non-controlling Interest in Income (Loss) of Consolidated Subsidiaries | ||||||||||||||||||||||||||||||||||||||||||||||||
| Advance Purchaser | $ | % | $ | $ | ( | % | $ | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Newrez Joint Ventures | % | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Excess MSRs | % | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Other investments | % | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Asset management | ( | n/m(A) | ( | n/m(A) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate | ( | n/m(B)(C) | ( | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
(A)Percentages in the table above deemed “n/m” are not meaningful. Non-controlling interests related to asset management investments represent the ownership interests in certain funds held by entities or persons other than the Company. These interests substantially relate to interests held by employees in real estate and energy funds managed by the Company adjusted for their capital activity and allocated earnings in such funds. Such employees’ portion of carried interest is expensed and recorded within compensation and benefits on the consolidated statements of operations and therefore excluded in the calculation of non-controlling interests.
(B)Included in commercial real estate is Rithm Property Trust’s 3.9 % minority interest in the Aggregators, which it acquired on December 19, 2025. As of March 31, 2026 and December 31, 2025, the Aggregators total consolidated equity was $1.6 3.4 million.
(C)Percentages in the table above deemed “n/m” are not meaningful. Non-controlling interests related to CRE investments represent the ownership interests in CRE by entities or persons other than the Company.
Redeemable Non-controlling Interests
In the first quarter of 2025, the Company consolidated the SPAC it sponsors. The Class A ordinary shares issued by the consolidated SPAC are redeemable for cash by the public shareholders at the time of a business combination or in the event the SPAC is unable to complete a business combination by a set date. Since the redemption of the Class A ordinary shares is outside the Company’s control, they are not classified as permanent equity and are recognized as redeemable non-controlling interests in consolidated subsidiaries in the consolidated balance sheets.
75
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
Additionally, in the first quarter of 2025, a certain interest held by a third-party in a consolidated entity is classified within redeemable non-controlling interests on the consolidated balance sheets due to a redemption feature.
The following table presents activity in redeemable non-controlling interests:
| SPAC | Consolidated Entity | Total | |||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | ||||||||||||||
| Distributions | ( | ( | |||||||||||||||
| Contributions | |||||||||||||||||
| Comprehensive income | |||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | ||||||||||||||
23. EQUITY AND EARNINGS PER SHARE
Equity and Dividends
Rithm Capital’s certificate of incorporation authorizes 2.0 billion shares of common stock, par value $0.01 per share, and 100.0 million shares of preferred stock, par value $0.01 per share.
On January 13, 2026, Rithm Capital priced its underwritten public offering of 10,000,000 shares of its 8.750 % Series F Fixed-Rate Reset Cumulative Redeemable Preferred Stock, par value $0.01 per share (the “Series F”), with a liquidation preference of $25.00 per share for net proceeds of approximately $242.1 million. The offering closed on January 21, 2026. In connection with the offering, the Company granted the underwriters an option for a period of 30 days to purchase up to an additional 1,500,000 shares of the Series F, which was not exercised.
On September 18, 2025, Rithm Capital priced its underwritten public offering of 7,600,000 of its 8.750 % Series E Fixed-Rate Cumulative Redeemable Preferred Stock, par value $0.01 per share (the “Series E”), with a liquidation preference of $25.00 per share for net proceeds of approximately $183.5 million. The offering closed on September 25, 2025. In connection with the offering, the Company granted the underwriters an option for a period of 30 days to purchase up to an additional 1,140,000 shares of the Series E, which was not exercised.
In March 2026, Rithm Capital’s board of directors renewed the Company’s stock repurchase program, authorizing the repurchase of up to $200.0 million of its common stock and $100.0 million of its preferred stock for the period from January 1, 2026 through December 31, 2026. The objective of the stock repurchase program is to seek flexibility to return capital when deemed accretive to stockholders. Repurchases can be made from time to time through open market purchases or privately negotiated transactions, pursuant to one or more plans established pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934 or by means of one or more tender offers, in each case, as permitted by securities laws and other legal requirements. During the three months ended March 31, 2026, the Company did not repurchase any shares of its common stock or its preferred stock.
The Company has an “at-the-market” equity offering program (the “ATM Program”) pursuant to which it may sell shares of its common stock, par value $0.01 per share, having an aggregate offering price of up to $750.0 million from time to time. During the three months ended March 31, 2026, the Company did not issue any shares of common stock under the ATM Program.
Purchases and sales of Rithm Capital’s securities by the Company’s officers and directors are subject to the Rithm Capital Corp. Insider Trading Compliance Policy.
76
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
The table below summarizes the Company’s outstanding preferred shares:
| Number of Shares | Liquidation Preference(A) | Carrying Value(B) | Dividends Declared per Share | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| March 31, 2026 | December 31, 2025 | March 31, 2026 | December 31, 2025 | Issuance Discount | March 31, 2026 | December 31, 2025 | Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series(C) | 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series A, issued July 2019(D)(G)(I) | $ | $ | % | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series B, issued August 2019(D)(G) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series C, issued February 2020(D)(H) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series D, | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series E, | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series F, | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(A)Each series has a liquidation preference or par value of $25.00 per share.
(B)Carrying value reflects par value less discount and issuance costs.
(C)Under certain circumstances upon a change of control, the Series A, Series B, Series C, Series D, Series E and Series F are convertible to shares of the Company’s common stock.
(D)Fixed-to-floating rate cumulative redeemable preferred.
(E)Fixed-rate reset cumulative redeemable preferred.
(F)Fixed-rate cumulative redeemable preferred.
(G)Effective August 15, 2024, dividends on the 7.50 % Series A Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (“Series A”) and the Company’s 7.125 % Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (“Series B”) accumulate at a floating rate. For the first quarter 2026 dividends, the Series A accrued dividends at a percentage of the $25.00 liquidation preference per share of the Series A equal to a three-month Chicago Mercantile Exchange (“CME”) SOFR, plus a spread adjustment of 0.261 %, plus a spread of 5.802 % and dividends on the Series B accumulated at a percentage of the $25.00 liquidation preference per share of the Series B preferred shares equal to a three-month CME SOFR, plus a spread adjustment of 0.261 %, plus a spread of 5.640 %.
(H)Effective February 15, 2025, dividends on the Company’s 6.375 % Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (“Series C”) accumulate at a floating rate. For the first quarter 2026 dividends, the Series C accrued dividends at a percentage of the $25.00 liquidation preference per share of the Series C equal to a three-month CME SOFR, plus a spread adjustment of 0.261 %, plus a spread of 4.969 %.
(I)The Company redeemed 2.0 million shares on March 28, 2025.
On March 24, 2026, Rithm Capital’s board of directors declared first quarter 2026 preferred dividends of $0.60 per share of Series A, $0.59 per share of Series B, $0.55 per share of Series C, $0.44 per share of the Company’s 7.000 % Fixed-Rate Reset Series D Cumulative Redeemable Preferred Stock (“Series D”), $0.55 per share of the Company’s 8.750 % Series E and $0.69 per share of the Company’s Series F, or approximately $2.5 million, $6.6 million, $8.7 million, $8.1 million, $4.2 million and $6.9 million, respectively.
Common dividends have been declared as follows:
| Per Share | ||||||||||||||||||||
| Declaration Date | Payment Date | Quarterly Dividend | Total Amounts Distributed (millions) | |||||||||||||||||
| March 21, 2025 | April 2025 | $ | $ | |||||||||||||||||
| June 18, 2025 | July 2025 | $ | $ | |||||||||||||||||
| September 17, 2025 | October 2025 | $ | $ | |||||||||||||||||
| December 18, 2025 | January 2026 | $ | $ | |||||||||||||||||
| March 24, 2026 | April 2026 | $ | $ | |||||||||||||||||
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| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
Warrants of Consolidated SPAC
At the time of IPO in February 2025, the SPAC issued 220,000 warrants to the Sponsor and 7,666,667 warrants to third parties. The warrants become exercisable 30 days after the consummation of a Business Combination (as defined in the Warrant Agreement) and will expire five years following such consummation, or earlier upon redemption or liquidation. The initial exercise price per share of each warrant is $11.50 . The warrants are subject to other customary terms common for instruments of this type. The Company eliminates the SPAC warrants it holds in consolidation. Such warrants are indexed to the SPAC's Class A ordinary shares and meet conditions for equity classification. Accordingly, the SPAC warrants are classified as equity and accounted for as a component of additional paid-in capital at the time of issuance on the Company's consolidated balance sheets.
Earnings Per Share
Rithm Capital is required to present both basic and diluted earnings per share (“EPS”). Basic EPS is calculated by dividing net income by the weighted average number of shares of common stock outstanding for the period. Diluted EPS is calculated using the treasury stock method by dividing net income by the weighted average number of shares of common stock outstanding plus the additional dilutive effect, if any, of common stock equivalents during each period. The effect of dilutive securities is presented net of tax.
The following table summarizes the basic and diluted EPS calculations:
| Three Months Ended March 31, | ||||||||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||||||||
| Net Income | $ | $ | ||||||||||||||||||||||||||||||
| Non-controlling interests in income of consolidated subsidiaries | ( | |||||||||||||||||||||||||||||||
| Redeemable non-controlling interests in income of consolidated subsidiaries | ||||||||||||||||||||||||||||||||
| Net Income Attributable to Rithm Capital Corp. | ||||||||||||||||||||||||||||||||
| Change in redemption value of redeemable non-controlling interests | ||||||||||||||||||||||||||||||||
| Dividends on preferred stock | ||||||||||||||||||||||||||||||||
| Net Income Attributable to Common Stockholders | $ | $ | ||||||||||||||||||||||||||||||
| Basic weighted average shares of common stock outstanding | ||||||||||||||||||||||||||||||||
Effect of Dilutive Securities(A)(B): | ||||||||||||||||||||||||||||||||
| Stock options | ||||||||||||||||||||||||||||||||
| Restricted stock | ||||||||||||||||||||||||||||||||
| Time-based RSU awards | ||||||||||||||||||||||||||||||||
| Performance-based RSU awards | ||||||||||||||||||||||||||||||||
| Time-based Class B Profit Units | ||||||||||||||||||||||||||||||||
| Performance-based Class B Profit Units | ||||||||||||||||||||||||||||||||
| Diluted Weighted Average Shares of Common Stock Outstanding | ||||||||||||||||||||||||||||||||
| Basic Earnings per Share Attributable to Common Stockholders | $ | $ | ||||||||||||||||||||||||||||||
| Diluted Earnings per Share Attributable to Common Stockholders | $ | $ | ||||||||||||||||||||||||||||||
(A)Certain stock options that could potentially dilute basic EPS in the future were not included in the computation of diluted EPS for the periods where they were out-of-the-money or a loss has been recorded, because they would have been anti-dilutive for the period presented.
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| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
24. INCOME TAXES
Income tax expense (benefit) consists of the following:
| Three Months Ended March 31, | |||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||
| Current: | |||||||||||||||||||||||||||||
| Federal | $ | $ | |||||||||||||||||||||||||||
| State and local | |||||||||||||||||||||||||||||
| Foreign | |||||||||||||||||||||||||||||
| Total current income tax expense | |||||||||||||||||||||||||||||
| Deferred: | |||||||||||||||||||||||||||||
| Federal | ( | ||||||||||||||||||||||||||||
| State and local | ( | ||||||||||||||||||||||||||||
| Foreign | ( | ( | |||||||||||||||||||||||||||
| Total deferred income tax expense (benefit) | ( | ||||||||||||||||||||||||||||
| Total Income Tax Expense (Benefit) | $ | $ | ( | ||||||||||||||||||||||||||
Rithm Capital intends to qualify as a REIT for each of its tax years through December 31, 2026. A REIT is generally not subject to U.S. federal corporate income tax on that portion of its income that is distributed to stockholders if it distributes at least 90% of its REIT taxable income to its stockholders by prescribed dates and complies with various other requirements.
Rithm Capital operates various business segments, including Origination and Servicing, Asset Management and portions of the Investment Portfolio and Commercial Real Estate segments, through TRSs that are subject to regular corporate income taxes, which have been provided for in the provision for income taxes, as applicable.
As of March 31, 2026, Rithm Capital recorded a net deferred tax liability of $885.8 million, primarily composed of deferred tax liabilities generated through the deferral of gains from residential mortgage loans sold by the origination business and changes in fair value of MSRs, offset partially by deferred tax assets related to net operating losses and tax deductible goodwill. The net deferred tax liability is reported within accrued expenses and other liabilities in the consolidated balance sheets. As of March 31, 2026, CL Life recorded a deferred tax asset of $6.2 million, primarily composed of deferred tax assets related to insurance reserves, which is reported within other assets in the consolidated balance sheets.
In assessing the realizability of deferred tax assets, Rithm Capital considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences become deductible. The valuation allowance as of March 31, 2026 was $73.8 million.
25. COMMITMENTS AND CONTINGENCIES
Litigation — Rithm Capital is or may become, from time to time, involved in various disputes, litigation and regulatory inquiry and investigation matters that arise in the ordinary course of business. Given the inherent unpredictability of these types of proceedings, it is possible that future adverse outcomes could have a material adverse effect on its business, financial position or results of operations. Rithm Capital is not aware of any unasserted claims that it believes are material and probable of assertion where the risk of loss is expected to be reasonably possible.
Rithm Capital is, from time to time, subject to inquiries by government entities. Rithm Capital currently does not believe any of these inquiries would result in a material adverse effect on Rithm Capital’s business.
Indemnifications — In the normal course of business, Rithm Capital and its subsidiaries enter into contracts that contain a variety of representations and warranties and that provide general indemnifications. Rithm Capital’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against Rithm Capital that have not yet occurred. However, based on its experience, Rithm Capital expects the risk of material loss to be remote.
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| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
Capital Commitments — As of March 31, 2026, Rithm Capital had outstanding capital commitments related to investments in the following investment types:
•MSRs and Servicer Advance Investments — Rithm Capital and, in some cases, third-party co-investors agreed to purchase future servicer advances related to certain non-Agency residential mortgage loans. In addition, Rithm Capital’s subsidiaries, NRM and Newrez, are generally obligated to fund future servicer advances related to the loans they are obligated to service. The actual amount of future advances purchased will be based on (i) the credit and prepayment performance of the underlying loans, (ii) the amount of advances recoverable prior to liquidation of the related collateral and (iii) the percentage of the loans with respect to which no additional advance obligations are made. The actual amount of future advances is subject to significant uncertainty.
•Mortgage Origination Reserves — Newrez currently originates, or has in the past originated, conventional, government-insured and non-conforming residential mortgage loans for sale and securitization. The GSEs or Ginnie Mae guarantee conventional and government insured mortgage securitizations and mortgage investors issue non-conforming PLSs, while Newrez generally retains the right to service the underlying residential mortgage loans. In connection with the transfer of loans to the GSEs or mortgage investors, Newrez makes representations and warranties regarding certain attributes of the loans and, subsequent to the sale, if it is determined that a sold loan is in breach of these representations and warranties, Newrez generally has an obligation to cure the breach. If Newrez is unable to cure the breach, the purchaser may require Newrez to repurchase the loan.
In addition, as issuers of Ginnie Mae guaranteed securitizations, Newrez holds the right to repurchase loans that are at least 90 days’ delinquent from the securitizations at their discretion. Loans in forbearance that are three or more consecutive payments delinquent are included as delinquent loans permitted to be repurchased. While Newrez is not obligated to repurchase the delinquent loans, Newrez generally exercises its respective option to repurchase loans that will result in an economic benefit. As of March 31, 2026, Rithm Capital’s estimated liability associated with representations and warranties and Ginnie Mae repurchases was $46.0 million and $4.4 billion, respectively. See Note 5 for information regarding the right to repurchase delinquent loans from Ginnie Mae securities and mortgage origination.
•Residential Mortgage Loans — As part of its investment in residential mortgage loans, Rithm Capital may be required to outlay capital. These capital outflows primarily consist of advance escrow and tax payments, residential maintenance and property disposition fees. The actual amount of these outflows is subject to significant uncertainty. See Note 7 for information regarding Rithm Capital’s residential mortgage loans.
•SFR Properties — On February 27, 2024, Viewpoint Murfreesboro Land LLC, a wholly owned subsidiary of Rithm Capital (“Viewpoint”), executed a purchase and sale agreement (the “PSA”) with an affiliate of BTR Group, LLC (“BTR”), BTR VM LLC, to purchase land for a purchase price of $7.0 million. In connection with the PSA, on February 27, 2024, Viewpoint entered into a fixed price design-build construction contract with BTR (the “Construction Contract”) to purchase 171 SFR properties that are scheduled to be built by BTR on the purchased land in accordance with the plans and specifications approved in accordance with entry into the Construction Contract, for an aggregate purchase price of $49.2 million. The aggregate purchase price is payable in installments in accordance with the draw schedule set forth in the Construction Contract, and delivery of the homes began in the third quarter of 2025. As of March 31, 2026, $16.3 million of the aggregate purchase price remains outstanding.
•Residential Transition Loans — Genesis had commitments to fund up to $1.9 billion of additional advances on existing mortgage loans as of March 31, 2026. These commitments are generally subject to loan agreements with covenants regarding the financial performance of the customer and other terms regarding advances that must be met before Genesis funds the commitments.
•Commercial Investments — Rithm Capital has invested in various CRE projects. As part of its investments, Rithm Capital is required to fund its pro rata share of future capital contributions subject to certain limitations. As of March 31, 2026, the Company has an unfunded capital commitment to fund up to $80.0 million on an existing loan to a certain CRE borrower.
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| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
•Fund Commitments — As of March 31, 2026, the Company has unfunded capital commitments of $548.9 million, including certain funds managed by the Company, of which $35.6 million relates to commitments of consolidated funds. Approximately $129.9 million of the commitments will be funded by contributions to the Company from certain current and former employees and executive managing directors. The Company expects to fund these commitments over approximately the next 6 years. The Company has guaranteed these commitments in the event any executive managing director fails to fund any portion when called by the fund. The Company has historically not funded any of these commitments and does not expect to in the future, as these commitments are expected to be funded by the Company’s executive managing directors individually. During the first quarter of 2025, the Company entered into a consolidated joint venture with a third party to acquire an interest in an affiliated fund. As of March 31, 2026, the unfunded capital commitment to the consolidated joint venture was $31.4 million, of which $25.1 million is expected to be funded by the third-party.
Non-Recourse Carve-Out, Construction Completion, Environmental and Carry Guarantees – In connection with investments in two CRE projects, Rithm Capital provided certain limited guarantees to the senior lender on the projects (or entered into reimbursement agreements with the guarantor) related to non-recourse carve outs, completion, environmental and carry costs of the projects. The actual amount that could be called under the guarantees is subject to significant uncertainty.
Environmental Costs — As an investor in and owner of commercial and residential real estate, Rithm Capital is subject to potential environmental costs. At March 31, 2026, Rithm Capital is not aware of any environmental concerns that would have a material adverse effect on its consolidated financial position or results of operations.
Debt Covenants — Certain of the Company’s debt obligations are subject to loan covenants and event of default provisions, including event of default provisions triggered by certain specified declines in Rithm Capital’s equity or a failure to maintain a specified tangible net worth, liquidity or indebtedness to tangible net worth ratio. Refer to Note 17 for further discussion of the Company’s debt obligations.
Other Commitments and Contingencies —
•60 Wall Street Construction Guarantee — Elecor owns a 5.0 % interest in 60 Wall Street. In connection with the modification and extension of the mortgage loan at 60 Wall Street, the joint venture committed to redevelop the property and fund the necessary costs to complete the project. On behalf of the joint venture, Elecor has provided the lender with certain guarantees, including a completion guarantee. Elecor has agreements with its joint venture partners that indemnifies it for the partner's share of guarantees that it has provided. In accordance with U.S. GAAP, the Company recorded a liability equal to the fair value of the obligations undertaken in issuing the guarantees and record an asset equal to the fair value of the indemnification it has received. As of March 31, 2026, the Company has a $15.4 million asset and liability, which are included as a component of other assets and accrued expenses and other liabilities, on the consolidated balance sheets.
81
| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
26. RELATED PARTY TRANSACTIONS
A party is considered to be related to the Company if the party, directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners, management and directors, as well as members of their immediate families or any other parties with which Rithm Capital may deal if one party to a transaction controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests.
Management Agreements
Rithm Capital previously entered into a property management agreement with APM, an entity in which the Company has an ownership interest, to manage certain of the Company’s SFR properties. Rithm Capital’s ownership interest in such entity is accounted for under the equity method and is presented within other assets on the consolidated balance sheets. Refer to Note 19 for additional details on the 2022-SFR2 Securitization.
Management Fees and Incentive Income Earned from Related Parties and Waived Fees
The Company earns substantially all of its management fees and incentive income from the funds and real estate joint ventures, which are considered related parties as the Company manages the operations of and makes investment decisions for these funds and real estate joint ventures.
As of March 31, 2026, approximately $2.2 billion of the Company’s AUM represented investments by the Company, its current executive managing directors, employees and certain other related parties in Company managed funds and real estate joint ventures. As of March 31, 2026, approximately 72.0 % of this AUM is not charged management fees or incentive fees.
Due from Related Parties
The Company pays certain expenses on behalf of the funds. Amounts due from related parties relate primarily to reimbursements to Sculptor for these expenses and amounts due from Rithm Property Trust and R-HOME, to the extent the expenses were incurred by the manager. Due from related parties is presented within other assets on the consolidated balance sheets.
Investments in Funds
The Company, through Sculptor, consolidates a $350.0 million structured alternative investment solution, a collateralized financing vehicle that invests in various open-ended and closed-ended funds managed by Sculptor. Sculptor invested approximately $127.8 million in the vehicle. See Note 18 and Note 19 for additional details on the structured alternative investment solution.
Additionally, the Company consolidates Sculptor Loan Financing Partners, a CLO equity investment platform that manages investments in the equity tranches of Sculptor managed CLOs in the U.S. and Europe. As of March 31, 2026, the Company invested $132.7 million in the vehicle. See Note 18 and Note 19 for additional details on the Sculptor Loan Financing Partners.
During the first quarter of 2025, the Company acquired interests in certain funds managed by the Company for approximately $74.6 million. See Note 25 for additional details on this investment. Additionally, the Company has an interest in a consolidated joint venture that holds an investment in an affiliated fund. Refer to Notes 19 and 25 for additional details.
During the third quarter of 2025, the Company entered into a strategic investment partnership, managed by the Company, with a third party investor to fund the acquisition of RTLs, originated and serviced by the Company’s subsidiary, Genesis. As of March 31, 2026, the Company invested $5.1 million in the partnership it consolidates. See Note 19 for additional details.
Investments in Loan Securitizations
The Company retains beneficial interests in loan securitization trusts that it sponsors. Refer to Note 19 for additional details.
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| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
Investment in the SPAC
In a private placement concurrent with the IPO of the SPAC, the Sponsor acquired 660,000 units of the SPAC (the “Private Placement Units”) for total gross proceeds of $6.6 million. Each Private Placement Unit consists of one Class A share and one-third of one non-redeemable warrant. In addition, the Sponsor purchased and owns substantially all of the outstanding Class B ordinary shares of the SPAC. The Private Placement Units and Class B ordinary shares held by the Company are eliminated upon consolidation.
CRE Joint Ventures
In connection with the Elecor Acquisition in the fourth quarter of 2025, the Company consolidates certain real estate joint ventures that hold CRE properties, which the Company manages. These joint ventures are indirectly consolidated through the Aggregators. See Note 19 for additional information.
Transactions with Rithm Property Trust
RCM Manager, a subsidiary of Rithm Capital, entered into a management agreement, dated June 11, 2024 (as amended by that First Amendment, dated as of October 18, 2024, and that Second Amendment, dated as of February 12, 2026, the “Rithm Property Trust Management Agreement”), by and between RCM Manager and Rithm Property Trust, to serve as Rithm Property Trust’s external manager. On December 30, 2025, Rithm Property Trust effected a one-for-six reverse stock split of the Company’s issued and outstanding shares of common stock. As of March 31, 2026, Rithm Capital holds 0.7 million shares of Rithm Property Trust common stock with a fair value of $8.8 million, equal to 8.6 % of the outstanding shares of Rithm Property Trust common stock. In addition, Rithm Property Trust issued five-year warrants to Rithm Capital, exercisable for approximately 0.5 million shares of Rithm Property Trust’s common stock. During the first quarter of 2025, the Company acquired 400,000 shares, or 19.2 %, for $10.0 million of Rithm Property Trust’s 9.875 % Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock at the public offering price of $25.00 per share.
Pursuant to the Rithm Property Trust Management Agreement, RCM Manager implements and manages Rithm Property Trust’s business strategy, investment activities and day-to-day operations subject to oversight by Rithm Property Trust’s board of directors. Additionally, the Company’s Chief Executive Officer currently serves as Rithm Property Trust’s Chief Executive Officer and a member of the board of directors of Rithm Property Trust. The Company’s Chief Executive Officer does not receive any compensation from Rithm Property Trust for his role either as Chief Executive Officer or a member of the board of directors.
Rithm Property Trust pays all of its costs and expenses and reimburses RCM Manager (to the extent incurred by RCM Manager) on a monthly basis for the costs and expenses of providing services under the Rithm Property Trust Management Agreement, including reimbursing RCM Manager or its affiliates, as applicable, for the Company’s allocable share of the compensation (whether paid in cash, stock or other forms), including annual base salary, bonus, any related withholding taxes and employee benefits, paid to (i) RCM Manager’s personnel serving as Rithm Property Trust’s chief financial officer based on the percentage of his or her time spent managing the Rithm Property Trust's affairs and (ii) other corporate finance, tax, accounting, middle office, internal audit, legal, risk management, operations, compliance and other non-investment personnel of RCM Manager and its affiliates who spend all or a portion of their time managing Rithm Property Trust's affairs.
The Company, through Newrez, assumed operational servicing for mortgage loans with an UPB of approximately $562.1 million held directly by Rithm Property Trust, and servicing rights for mortgage loans with an UPB of approximately $2.9 billion in certain securitization trusts sponsored by Rithm Property Trust, which were previously serviced by an affiliate of Rithm Property Trust. For loans held directly by Rithm Property Trust, Newrez is entitled to receive an average servicing fee based on UPB of approximately 0.54 % for performing loans and non-performing loans and the greater of (i) the servicing fee applicable to the underlying mortgage loan prior to foreclosure, or (ii) 1.00 % annually of the fair market value of the REO as reasonably determined by RCM Manager or 1.00 % annually of the purchase price of any REO otherwise purchased by Rithm Property Trust for REO assets. For the servicing of the loans in the securitization trusts sponsored by Rithm Property Trust, Newrez is entitled to receive a servicing fee pursuant to the terms of the servicing agreement with each trust. As of March 31, 2026, the fair value of recognized MSRs associated with the loans in securitizations sponsored by Rithm Property Trust was approximately $22.3 million.
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| RITHM CAPITAL CORP. AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||
| (dollars in tables in thousands, except share and per share data) | ||
During the first quarter of 2025, the Company entered into a consolidated joint venture with Rithm Property Trust to fund a certain mortgage note receivable in the amount of $35.0 million, with each party contributing $17.5 million.
In connection with the Elecor Acquisition, Rithm Property Trust acquired an indirect 3.9 % interest in the Company’s subsidiaries, the Aggregators, which indirectly own a portfolio of the CRE properties acquired in the Elecor Acquisition. Rithm Property Trust made an aggregate cash contribution to the Aggregators in the amount of $50.0 million, with the commitment to make, under certain circumstances, additional cash capital contributions of up $7.5 million, in the aggregate, in exchange for additional limited partnership interest in the Aggregators.
Transactions with Rithm Perpetual Life Residential Trust (R-HOME)
Pursuant to an advisory agreement entered into during the fourth quarter of 2025, the Rithm Advisers provide investment management services to R-HOME, including the management of R-HOME’s business strategy, investment activities and day-to-day operations, subject to the oversight of R-HOME’s board of trustees. In exchange, the Rithm Advisers receive management fees and performance fees. In addition, the Company holds a 2.8 % interest in R-HOME through Class E common shares. Additionally, the Company’s Chief Executive Officer currently serves as R-HOME’s Chief Executive Officer, Co-Chief Investment Officer and a member of the board of trustees of R-HOME. The Company’s Chief Executive Officer does not receive any compensation from R-HOME for his role as Chief Executive Officer, Co-Chief Investment Officer or a member of the board of trustees.
R-HOME pays all of its costs and expenses and reimburses the Rithm Advisers (to the extent incurred by the Rithm Advisers) on a monthly basis for the costs and expenses of providing services under its advisory agreement, including reimbursing for R-HOME’s allocable share of the compensation (whether paid in cash, stock or other forms), including annual base salary, bonus, any related withholding taxes and employee benefits, paid to (i) the Rithm Advisers’ personnel serving as R-HOME’s chief financial officer and chief legal officer based on the percentage of such personnel’s time spent managing R-HOME’s affairs and (ii) other corporate finance, tax, accounting, middle office, internal audit, legal, risk management, operations, compliance and other non-investment personnel who spend all or a portion of their time managing R-HOME's affairs.
Additionally, in the first quarter of 2026, the Company transferred $209.6 million of UPB of certain RTLs and residential mortgage loans to R-HOME, for an aggregate purchase price of approximately $213.2 million. Following the transfer, the Company derecognized the loans from its consolidated balance sheet. The Company, through its subsidiaries Newrez and Genesis, continues to service the transferred loans pursuant to a servicing agreement. For RTLs held by R-HOME, Genesis is entitled to receive an annual servicing fee of 75 bps on the UPB of each RTL (or related REO property), and such fee is payable monthly in arrears. For residential mortgage loans held by R-HOME, Newrez is entitled to receive a flat monthly servicing fee of $7.00 per loan, plus additional fees if the borrower is delinquent with payment.
Other
27. SUBSEQUENT EVENTS
The Company has evaluated subsequent events from March 31, 2026 through the date of issuance of these consolidated financial statements and determined that there were no subsequent events requiring recognition or additional disclosure in the consolidated financial statements, other than as described in these notes.
84
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management’s Discussion and Analysis of Financial Condition and Results of Operations (the “MD&A”) should be read in conjunction with the unaudited consolidated financial statements and notes thereto, and with Part II, Item 1A., “Risk Factors” of this report and Part I, Item 1A. “Risk Factors” of the 2025 Form 10-K.
The MD&A is intended to provide information relevant to an assessment of our financial condition and results of operations, including the quality and variability of our earnings and cash flows; discuss material events, trends and uncertainties known to management that are reasonably likely to affect future results or financial condition; and provide context for the financial statements and other data that management believes to be helpful to an understanding of our business from management’s perspective.
COMPANY OVERVIEW
Rithm Capital is a global alternative asset manager focused on real estate, credit and financial services. We are a Delaware corporation and currently operate as an internally managed REIT.
We seek to generate long-term value for our investors by leveraging our investment expertise and operating capabilities to identify, acquire, manage and enhance the value of real estate-related and other financial assets. We operate an integrated platform, spanning asset-based finance, residential and commercial real estate lending, commercial real estate ownership and investment, MSRs, and structured credit, that combines operating companies, investment portfolios and asset management capabilities across the residential mortgage, real estate and credit markets. Headquartered in New York City, Rithm Capital has a global presence with offices in London, Hong Kong, Tokyo, Toronto and Abu Dhabi.
We conduct our business through the following segments: (i) Origination and Servicing, (ii) Residential Transitional Lending, (iii) Asset Management, (iv) Investment Portfolio and (v) Commercial Real Estate. During the first quarter of 2026, the Company revised the composition of its reportable segments to include a new Commercial Real Estate segment, and prior-period segment information has been recast to conform to the current-period presentation.
Our Origination and Servicing segment operates through our wholly owned subsidiaries, Newrez and New Residential Mortgage LLC (“NRM”). Our residential mortgage origination business sources and originates loans through four channels: Direct to Consumer, Retail/Joint Venture, Wholesale and Correspondent.
Our servicing platform complements its origination business and provides performing and special servicing capabilities to its subsidiaries and third-party clients. NRM and Newrez are licensed or otherwise eligible to service residential mortgage loans in all states within the U.S. and the District of Columbia. NRM and Newrez are also approved to service mortgage loans on behalf of investors, including Fannie Mae and Freddie Mac, and in the case of Newrez, Government National Mortgage Association (“Ginnie Mae,” collectively with the GSEs, the “Agencies” and each of Fannie Mae, Freddie Mac and Ginnie Mae, an “Agency”). Newrez is also eligible to perform servicing on behalf of other servicers as a subservicer.
Newrez sells substantially all of the mortgage loans it originates into the secondary market. Newrez securitizes loans into RMBS through the Agencies. Loans that do not conform to the guidelines of the Agencies, the Federal Housing Administration (“FHA”), the U.S. Department of Agriculture or the Department of Veterans Affairs (for loans securitized with Ginnie Mae) are sold to private investors and mortgage conduits. Newrez generally retains the right to service the underlying residential mortgage loans sold and/or securitized by Newrez. NRM and Newrez are required to conduct aspects of their operations in accordance with applicable policies and guidelines of such Agencies. In addition, to origination and servicing activities, this segment includes operations conducted through wholly owned subsidiaries that provide mortgage- and real estate-related services, including Guardian Asset Management (“Guardian”), a provider of field services and property management services, eStreet Appraisal Management LLC (“eStreet”), a provider of appraisal services, and Avenue 365 Lender Services, LLC (“Avenue 365”), a provider of title and settlement services.
Our Residential Transitional Lending segment primarily operates through our wholly owned subsidiary, Genesis, a residential transitional lender. Genesis originates and manages a portfolio of short-term, business-purpose mortgage loans used by experienced developers of and investors in residential real estate, including multifamily residential properties, to finance transitional projects, including construction, renovation and bridge financings.
Our Asset Management segment conducts its activities primarily through RAM and its wholly owned subsidiaries, including Sculptor, Crestline and Rithm Capital Advisors LLC (“RCA”). RCM GA Manager LLC (“RCM Manager” and, together with
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RCA, the “Rithm Advisers”) manages Rithm Property Trust and R-HOME pursuant to management and/or advisory agreements. Through Sculptor, Crestline and the Rithm Advisers, we provide asset management services and investment products through commingled funds, separate accounts and other alternative investment vehicles, generating primarily fee-based revenues. As of March 31, 2026, we had approximately $59 billion in AUM.
Our Investment Portfolio segment includes investments in real estate-related assets and operating businesses across the residential mortgage and real estate lifecycle. These investments primarily consist of residential mortgage loans, SFR properties, consumer loans, non-Agency securities, Excess MSRs and servicer advance investments, which are held on the Company’s consolidated balance sheets and generate income primarily through interest income, rental revenue and other investment portfolio revenues.
Our Commercial Real Estate segment includes the ownership, operation and management of a portfolio of CRE assets, primarily Class A office properties located in New York City and San Francisco. The segment reflects our expansion into CRE equity ownership and operations, including the acquisition of Elecor in December 2025. We manage these assets as part of our broader CRE platform, generating revenues primarily from rental revenue and other property-related revenues. In April 2026, the Company announced the rebranding of the Paramount Group platform to Elecor Properties.
For additional information regarding our investment guidelines, see Part I, Item 1. Business—“Investment Guidelines” of the 2025 Form 10-K.
In executing our strategy, from time to time, we explore, and will continue to explore, various opportunities to create value for our shareholders, which may include acquisitions and dispositions of assets, financing transactions (including equity or debt offerings by one or more of our subsidiaries), business combinations, a change in our tax status, spin-off transactions or other similar transactions. Among other opportunities, we believe there are additional growth opportunities in the direct lending, insurance, private equity and infrastructure spaces. Each of the potential transactions described above is subject to market conditions, regulatory considerations and other factors. There can be no assurances as to the timing of any such transaction or that a transaction will be completed at all.
BOOK VALUE PER COMMON SHARE
The following table summarizes the calculation of book value per common share:
| ($ in thousands, except per share amounts) | March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | March 31, 2025 | ||||||||||||||||||||||||
| Total equity | $ | 9,144,157 | $ | 8,940,407 | $ | 8,612,685 | $ | 8,059,209 | $ | 7,884,840 | |||||||||||||||||||
| Less: Preferred Stock Series A, B, C, D, E and F | 1,632,915 | 1,390,790 | 1,390,790 | 1,207,254 | 1,207,254 | ||||||||||||||||||||||||
| Less: Non-controlling interests of consolidated subsidiaries | 534,080 | 509,920 | 114,168 | 110,826 | 108,716 | ||||||||||||||||||||||||
| Total equity attributable to common stock | $ | 6,977,162 | $ | 7,039,697 | $ | 7,107,727 | $ | 6,741,129 | $ | 6,568,870 | |||||||||||||||||||
| Common stock outstanding | 557,902,002 | 555,880,947 | 554,196,670 | 530,292,171 | 530,122,477 | ||||||||||||||||||||||||
| Book Value per Common Share | $ | 12.51 | $ | 12.66 | $ | 12.83 | $ | 12.71 | $ | 12.39 | |||||||||||||||||||
Refer to Item 3. “Quantitative and Qualitative Disclosures About Market Risk” for a discussion of interest rate risk and its impact on fair value.
MARKET CONSIDERATIONS
Summary
During the first quarter of 2026, macroeconomic conditions reflected a combination of stable underlying inflation, modest improvement in labor market conditions and increased volatility in energy prices and interest rates, including uncertainty resulting from the conflict with Iran that began at the end of February 2026. The Federal Reserve maintained the federal funds target range at 3.50%–3.75% during its January and March 2026 meetings following rate cuts in late 2025.
Headline inflation increased during the quarter, primarily reflecting higher energy prices, as West Texas Intermediate crude oil prices increased 76.6% during the quarter following the outbreak of the conflict with Iran, while measures of core inflation remained stable. The unemployment rate declined modestly from 4.4% in December 2025 to 4.3% in March 2026, indicating continued stabilization in labor market conditions.
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Market interest rates increased during the quarter, with the 10-year Treasury yield rising 15 basis points to 4.32%, while market expectations for rate cuts in 2026 declined significantly. Equity markets experienced volatility during the quarter, with the S&P 500 declining 4.6% before partially recovering in April 2026.
Inflation
Inflation increased during the first quarter of 2026, primarily reflecting higher energy prices following the outbreak of the conflict with Iran. Consumer Price Index (“CPI”) inflation rose from 2.7% in December 2025 to 3.3% in March 2026, driven in part by an increase in energy prices from 2.1% in December 2025 to 12.6% in March 2026 on a year-over-year basis.
Core CPI, which excludes food and energy, remained stable at 2.6%; however, the Federal Reserve’s preferred measure of underlying inflation, core Personal Consumption Expenditures, increased from 3.0% in December 2025 to 3.2% in March 2026. Other inflation indicators showed modest increases, with producer price inflation rising to 4.0% in March 2026 from 3.2% in December 2025, and import prices increasing 2.1% over the 12 months ended March 31, 2026 after being flat in December 2025.
Treasury Yields
Treasury yields increased during the first quarter of 2026. The ten-year Treasury yield rose 15 basis points to 4.32% from 4.17% at the end of December 2025. Shorter-term yields increased more significantly, with the two-year Treasury yield rising 32 basis points to 3.79%. As a result, the yield curve flattened, with the spread between two-year and ten-year Treasury yields narrowing from 69 basis points to 52 basis points over the quarter. This shift reflects reduced market expectations for interest rate cuts in 2026.
Labor Markets
Labor market conditions improved modestly during the first quarter of 2026. The unemployment rate declined by 0.1 percentage points from 4.4% in December 2025 to 4.3% in March 2026. Job growth strengthened during the quarter, with nonfarm payrolls increasing by an average of 68,000 per month, compared to an average monthly decline of 39,000 during the fourth quarter of 2025. Initial unemployment insurance claims also declined, averaging 212,000 per week during the first quarter of 2026, compared to 222,000 per week in the prior quarter.
Housing Market
Housing market activity softened during the first quarter of 2026, reflecting higher mortgage rates. Existing home sales declined to an annualized rate of 4.04 million, compared to 4.16 million in the fourth quarter of 2025. New home sales data remains limited due to publication delays, with January 2026 representing the most recent available data. Sales were approximately 587,000 at an annual rate, compared to an average of approximately 709,000 during the fourth quarter of 2025. Home price growth increased modestly, with the median resale price rising 1.4% year-over-year in March 2026, compared to 0.3% in December 2025. Mortgage rates increased during the quarter, with the 30-year fixed rate rising to 6.38% from 6.15% at year-end.
Policy developments also contributed to uncertainty in certain housing-related sectors. The Senate’s 21st Century ROAD to Housing Act includes provisions that, if enacted, would require certain large institutional investors to sell newly constructed build-to-rent properties to individual homebuyers within seven years, which could impact construction activity and investment in the build-to-rent sector.
Commercial Real Estate
The U.S. CRE market entered 2026 in a more functional (if still bifurcated) state than in prior periods. Price discovery has continued to advance as the refinancing cycle drives transactions, recapitalizations and extensions—tightening bid-ask spreads in certain property types even as stress remains concentrated in assets with structural demand impairment or near-term capital needs. While the Federal Reserve maintained its policy rate (3.50–3.75%) during the first quarter of 2026, many CRE participants continue to operate with higher-for-longer financing discipline: lower leverage, wider debt yields and a sharper penalty for cash-flow volatility.
Equity markets have also remained selectively actionable in early 2026 as valuations have continued to stabilize and underwriting confidence has improved relative to prior periods. While capitalization rates remain elevated relative to the prior cycle, the combination of maturing debt, reduced rate volatility and selective improvements in fundamentals continues to
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support pathways for equity deployment—particularly in situations where basis resets, discounted entry points or recapitalization structures create a margin of safety. That said, equity outcomes remain highly dispersed and increasingly driven by asset quality, sponsorship strength and the ability to execute business plans in a higher-cost operating and capital environment.
Market Conditions & Sector Performance
Industrial & Retail: Industrial fundamentals remain generally stable but more normalized. Leasing and rent growth continue to be supported where demand is tied to logistics, manufacturing re-shoring and supply-chain resilience, while new development remains constrained by capital costs—supporting medium-term balance. Retail continues to demonstrate relatively durable fundamentals: necessity-based and well-located centers benefit from limited new supply and improved tenant health, while discretionary formats remain more sensitive to consumer trade-down and occupancy cost pressures. Broadly, investor attention continues to skew toward “bond-like” retail cash flows and infill industrial assets with long-duration demand support, with equity investors increasingly focused on assets that can sustain distributions and deliver predictable cash flows in a higher-rate environment.
Multifamily: Multifamily remains supported by affordability constraints and household formation, though performance continues to vary by market and vintage. Supply deliveries in select Sun Belt and high-growth markets continue to pressure rent growth and concessions, while insurance, taxes and operating expenses remain key drivers of net operating income variability. The market continues to emphasize operating performance—durable occupancy and expense control remain primary underwriting considerations—and equity investors are placing continued emphasis on in-place cash flow and operational execution, particularly in markets where supply-driven pressure may persist through 2026.
Office: Office continues to reflect significant divergence across assets. Trophy and well-amenitized properties in strong locations with high-quality tenancy remain comparatively more financeable, while commodity assets continue to face elevated vacancy, lease rollover risk and constrained refinancing options. Distress continues to work through the system, with outcomes increasingly dependent on asset quality, capital structure and tenant composition. Performance remains highly market-specific, with certain gateway markets—including New York City and San Francisco—demonstrating relatively stronger leasing and liquidity dynamics. Equity capital, where it participates, remains concentrated in recapitalizations, repositionings and select discounted acquisitions where new basis and capital structure resets can improve long-term viability.
Capital Markets & Investment Trends
Credit remains available but selective and structurally different than the pre-2022 market. Banks continue to demonstrate caution in new origination, particularly for office and transitional business plans, contributing to an ongoing funding gap for refinancing and recapitalization capital. At the same time, securitized and institutional capital sources remain active where collateral and sponsorship meet current underwriting standards. Private-label commercial mortgage-backed securities (“CMBS”) issuance has remained active in early 2026, reflecting continued demand for stabilized, high-quality collateral, even as stress persists in certain property types and legacy loan vintages.
Equity capital markets remain selectively open but return-driven and more disciplined than in the prior cycle. Public and private market valuation gaps have continued to narrow modestly as capitalization rates have stabilized and forward rate expectations have improved, though transaction activity remains influenced by constrained seller willingness and elevated required returns. Limited partner liquidity needs, fund lifecycle dynamics and debt maturities continue to catalyze recapitalizations and secondary activity, supporting a pipeline of equity opportunities across preferred equity, structured joint ventures and control acquisitions.
The current phase of the cycle continues to be defined by maturities and refinancing dynamics. A substantial volume of commercial mortgages remains scheduled to mature in 2026 and beyond, reinforcing the market’s focus on extensions, paydowns and creative capital solutions, including preferred equity, mezzanine financing, rescue capital and structured senior loans. In this environment, transaction activity continues to be driven largely by liability management—recapitalizations and refinancings—rather than discretionary investment sales, and equity investment opportunities remain increasingly linked to capital structure complexity rather than traditional stabilized acquisitions.
Outlook
We expect 2026 to continue to reflect a period of normalization in the CRE market, with outcomes increasingly differentiated by asset quality, sector fundamentals and capital structure. The gap between short-term and long-term Treasury rates narrowed from about 0.71% at year-end to about 0.50% by mid-April due to investors expecting fewer future rate cuts, especially as higher energy prices brought inflation concerns back into focus. The most likely path remains (i) gradually improving liquidity
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for “financeable” assets, (ii) continued pressure and resolution activity in structurally challenged segments and (iii) sustained dispersion in performance across property types and markets. While capital markets activity, including CMBS issuance, has remained active, delinquency trends and refinancing activity continue to indicate elevated levels of stress in certain segments, and overall market recovery is expected to remain uneven.
For Rithm Capital, we believe this environment remains constructive because the market continues to produce both structured-credit and equity opportunities with attractive risk-adjusted return potential. Dislocation and refinancing-driven activity should continue to create entry points across the capital stack—particularly where traditional lenders remain constrained and where sponsors require speed, certainty and flexibility. The flatter curve does compress net interest margins for leveraged strategies that borrow short and lend long, placing a premium on credit selection and structural protections over duration positioning—a dynamic that favors the Company’s flexible, multi-strategy approach over spread-dependent book-value strategies. 2026 should continue to present attractive opportunities to provide liquidity against real estate with durable cash flows, while selectively pursuing equity and hybrid situations where basis resets, improved documentation terms and capital structure simplification can enhance downside protection and long-term total returns. However, the Company’s ability to execute on these opportunities remains subject to market conditions, borrower performance, interest rate volatility and broader economic factors.
The economic conditions discussed above influence our investment strategy and results.
The following table summarizes the change in U.S. GDP estimates (annualized rate) according to the U.S. Bureau of Economic Analysis:
| Three Months Ended | |||||||||||||||||||||||||||||
| March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | March 31, 2025 | |||||||||||||||||||||||||
| Real GDP | 2 | % | 0.5 | % | 4.4 | % | 3.8 | % | (0.5) | % | |||||||||||||||||||
The following table summarizes the annualized U.S. unemployment rate according to the U.S. Department of Labor:
| March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | March 31, 2025 | |||||||||||||||||||||||||
| Unemployment rate | 4.3 | % | 4.4 | % | 4.4 | % | 4.1 | % | 4.2 | % | |||||||||||||||||||
The following table summarizes the annualized 10-year U.S. Treasury rate according to the Federal Reserve and the 30-year fixed mortgage rate according to Freddie Mac:
| March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | March 31, 2025 | |||||||||||||||||||||||||
| 10-year U.S. Treasury rate | 4.3 | % | 4.2 | % | 4.2 | % | 4.2 | % | 4.2 | % | |||||||||||||||||||
| 30-year fixed mortgage rate | 6.4 | % | 6.2 | % | 6.3 | % | 6.8 | % | 6.7 | % | |||||||||||||||||||
We believe the estimates and assumptions underlying our consolidated financial statements are reasonable and supportable based on the information available as of March 31, 2026; however, uncertainty related to market volatility, the path of the federal funds rate, various regional conflicts and global trade and fiscal policies makes any estimates and assumptions as of March 31, 2026, inherently less certain than they would be absent the current environment. Actual results may materially differ from those estimates. Market volatility, inflationary pressures and government policies (monetary, fiscal, trade and immigration) and their impact on the current financial, economic and capital markets environment and future developments in these and other areas present uncertainty and risk with respect to our financial condition, results of operations, liquidity and ability to pay distributions.
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OUR PORTFOLIO
Our portfolio, as of March 31, 2026 and December 31, 2025, is separated into the Origination and Servicing, Residential Transitional Lending, Asset Management, Investment Portfolio and Commercial Real Estate segments, as described in more detail below (dollars in thousands).
| Origination and Servicing | Residential Transitional Lending | Asset Management | Investment Portfolio | Commercial Real Estate | Corporate Category | Total | ||||||||||||||||||||||||||||||||||||||
| March 31, 2026 | ||||||||||||||||||||||||||||||||||||||||||||
Investments(A) | $ | 18,736,571 | $ | 3,203,281 | $ | 1,021,920 | $ | 4,176,120 | $ | 5,126,122 | $ | — | $ | 32,264,014 | ||||||||||||||||||||||||||||||
Cash and cash equivalents(A) | 1,120,631 | 108,928 | 224,173 | 24,009 | 164,409 | 4,026 | 1,646,176 | |||||||||||||||||||||||||||||||||||||
Restricted cash(A) | 156,171 | 23,467 | 8,501 | 35,606 | 262,510 | 235,943 | 722,198 | |||||||||||||||||||||||||||||||||||||
Other assets(A) | 8,268,652 | 140,151 | 1,412,154 | 2,514,872 | 349,531 | 5,420 | 12,690,780 | |||||||||||||||||||||||||||||||||||||
| Goodwill | 29,468 | 55,731 | 231,444 | — | — | — | 316,643 | |||||||||||||||||||||||||||||||||||||
Assets of consolidated entities(A) | — | 974,188 | 1,605,855 | 3,154,690 | — | — | 5,734,733 | |||||||||||||||||||||||||||||||||||||
| Total Assets | $ | 28,311,493 | $ | 4,505,746 | $ | 4,504,047 | $ | 9,905,297 | $ | 5,902,572 | $ | 245,389 | $ | 53,374,544 | ||||||||||||||||||||||||||||||
Debt(A) | $ | 16,780,281 | $ | 2,647,509 | $ | 434,608 | $ | 5,096,739 | $ | 3,956,881 | $ | 1,259,284 | $ | 30,175,302 | ||||||||||||||||||||||||||||||
Other liabilities(A) | 5,723,796 | 59,613 | 1,250,252 | 459,954 | 303,928 | 963,912 | 8,761,455 | |||||||||||||||||||||||||||||||||||||
Liabilities of consolidated entities(A) | — | 864,407 | 1,342,418 | 2,725,667 | — | — | 4,932,492 | |||||||||||||||||||||||||||||||||||||
| Total Liabilities | 22,504,077 | 3,571,529 | 3,027,278 | 8,282,360 | 4,260,809 | 2,223,196 | 43,869,249 | |||||||||||||||||||||||||||||||||||||
| Redeemable Non-controlling Interests of Consolidated Subsidiaries | — | — | 120,484 | — | — | 240,654 | 361,138 | |||||||||||||||||||||||||||||||||||||
| Total Stockholders’ Equity | 5,807,416 | 934,217 | 1,356,285 | 1,622,937 | 1,641,763 | (2,218,461) | 9,144,157 | |||||||||||||||||||||||||||||||||||||
| Non-controlling interests in equity of consolidated subsidiaries | 9,576 | — | 73,445 | 58,370 | 392,689 | — | 534,080 | |||||||||||||||||||||||||||||||||||||
| Stockholders’ Equity in Rithm Capital Corp. | $ | 5,797,840 | $ | 934,217 | $ | 1,282,840 | $ | 1,564,567 | $ | 1,249,074 | $ | (2,218,461) | $ | 8,610,077 | ||||||||||||||||||||||||||||||
| Investments in Equity Method Investees | $ | 26,892 | $ | 28,363 | $ | 242,399 | $ | 325,904 | $ | 186,047 | $ | — | $ | 809,605 | ||||||||||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||
Investments(A) | $ | 18,308,310 | $ | 2,706,044 | $ | 906,454 | $ | 4,912,402 | $ | 5,156,248 | $ | — | $ | 31,989,458 | ||||||||||||||||||||||||||||||
Debt(A) | $ | 16,843,333 | $ | 2,219,808 | $ | 425,445 | $ | 5,689,351 | $ | 3,952,452 | $ | 1,258,271 | $ | 30,388,660 | ||||||||||||||||||||||||||||||
(A)The Company's consolidated balance sheets include assets and liabilities of consolidated VIEs, including funds and collateralized financing entities (“CFEs”) that are presented separately within assets and liabilities of consolidated entities. VIE assets can only be used to settle obligations and liabilities of the VIEs. VIE creditors do not have recourse to Rithm Capital Corp.
Origination and Servicing
The Origination and Servicing segment is Rithm Capital’s largest business by assets, equity and earnings contribution. The segment operates through our wholly owned subsidiaries Newrez and NRM, through which, we originate and service residential mortgage loans across multiple distribution channels and product types. As of March 31, 2026, Newrez ranked among the top five lenders in the U.S. based on total funded volume of originations, according to Inside Mortgage Finance. As of December 31, 2025, the latest period for which servicing rankings are available, Newrez also ranked among the top five servicers in the U.S. based on total unpaid principal balance (“UPB”) serviced, according to Inside Mortgage Finance.
Revenue in the Origination and Servicing segment is generated primarily from residential mortgage loan originations and servicing. Origination revenues include gains on the sale of residential mortgage loans and the value of MSRs retained upon loan transfer. Servicing revenues consist primarily of contractual servicing fees and ancillary servicing income. Profitability varies by origination channel, with Direct-to-Consumer originations generally generating higher margins and Correspondent originations generally generating lower margins.
We sell conforming loans to the Agencies and securitize Non-QM residential mortgage loans. Loans are typically funded at origination using warehouse financing facilities, which are repaid upon loan sale or securitization.
We operate a multi-channel residential mortgage origination platform that offers both purchase and refinance loan products. Our origination activities are conducted through several channels, including: (i) a Retail channel, which originates loans through loan officers and joint venture relationships; (ii) a Direct-to-Consumer channel, which offers purchase, refinance and closed-end second lien loans to eligible new and existing servicing customers; and (iii) Wholesale and Correspondent channels, through which we purchase loans originated by mortgage brokers, community banks, credit unions and other third-party originators that meet our underwriting and eligibility standards.
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Our loan offerings include residential mortgage loans that conform to the underwriting standards of the GSEs and Ginnie Mae, government-insured residential mortgage loans insured by the FHA, the VA and the USDA, non-qualified residential mortgage (“Non-QM”) loans originated through our SMART Loan Series and certain non-Agency loan products. Our Non-QM loan offerings are designed for borrowers who do not meet the underwriting criteria applicable to Agency loans but satisfy our credit and risk standards. We also originate closed-end second lien home equity loans for existing customers, which allow borrowers to access home equity without refinancing their existing first-lien mortgage.
Our origination platform funded approximately $15.5 billion and $18.8 billion of residential mortgage loans during the three months ended March 31, 2026 and December 31, 2025, respectively, and $15.5 billion and $11.8 billion during the three months ended March 31, 2026 and 2025, respectively. The table below provides selected operating statistics by channel and product for our Origination and Servicing segment:
| UPB | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | March 31, 2026 | % of Total | December 31, 2025 | % of Total | March 31, 2025 | % of Total | QoQ Change | YoY Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Production by Channel: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Direct to Consumer | $ | 2,473 | 16% | $ | 2,846 | 15% | $ | 1,170 | 10% | $ | (373) | $ | 1,303 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retail / Joint Venture | 712 | 5% | 824 | 4% | 580 | 5% | (112) | 132 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wholesale | 2,562 | 17% | 3,672 | 20% | 1,537 | 13% | (1,110) | 1,025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Correspondent | 9,726 | 62% | 11,473 | 61% | 8,542 | 72% | (1,747) | 1,184 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Production by Channel | $ | 15,473 | 100% | $ | 18,815 | 100% | $ | 11,829 | 100% | $ | (3,342) | $ | 3,644 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Production by Product: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Agency | $ | 8,232 | 54% | $ | 7,966 | 42% | $ | 5,502 | 47% | $ | 266 | $ | 2,730 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Government | 5,796 | 37% | 9,018 | 48% | 5,538 | 47% | (3,222) | 258 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-QM | 1,076 | 7% | 1,461 | 8% | 389 | 3% | (385) | 687 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-Agency | 350 | 2% | 339 | 2% | 372 | 3% | 11 | (22) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | 18 | —% | 31 | —% | 28 | —% | (13) | (10) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Production by Product | $ | 15,472 | 100% | $ | 18,815 | 100% | $ | 11,829 | 100% | $ | (3,343) | $ | 3,643 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| % Purchase | 51 | % | 58 | % | 73 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| % Refinance | 49 | % | 42 | % | 27 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
We generally service the residential mortgage loans that we originate, which provides ongoing borrower engagement throughout the life of the loan. Our servicing operations are organized into performing and special servicing divisions. The performing servicing division services performing Agency and government-insured loans, while the special servicing division services delinquent Agency, government-insured and non-Agency loans on behalf of loan owners. The special servicing division also provides servicing for third-party portfolios owned by unaffiliated investors.
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The table below provides the mix of Newrez’s serviced assets portfolio between subserviced performing servicing (labeled as “Performing Servicing”) and subserviced non-performing or special servicing (labeled as “Special Servicing”). Third-party servicing includes loan portfolios serviced on behalf of Rithm Capital or its subsidiaries and non-affiliated third parties for the periods presented.
| UPB as of | |||||||||||||||||||||||||||||||||||||||||
| (in millions) | March 31, 2026 | December 31, 2025 | March 31, 2025 | QoQ Change | YoY Change | ||||||||||||||||||||||||||||||||||||
| Performing Servicing: | |||||||||||||||||||||||||||||||||||||||||
| MSR-owned assets | $ | 526,731 | $ | 525,854 | $ | 519,812 | $ | 877 | $ | 6,919 | |||||||||||||||||||||||||||||||
| Residential whole loans | 2,993 | 3,269 | 2,379 | (276) | 614 | ||||||||||||||||||||||||||||||||||||
| Total Performing Servicing | 529,724 | 529,123 | 522,191 | 601 | 7,533 | ||||||||||||||||||||||||||||||||||||
| Special Servicing: | |||||||||||||||||||||||||||||||||||||||||
| MSR-owned assets | 15,805 | 15,563 | 13,032 | 242 | 2,773 | ||||||||||||||||||||||||||||||||||||
| Residential whole loans | 11,158 | 10,144 | 7,177 | 1,014 | 3,981 | ||||||||||||||||||||||||||||||||||||
| Third-party | 242,591 | 242,801 | 244,158 | (210) | (1,567) | ||||||||||||||||||||||||||||||||||||
| Total Special Servicing | 269,554 | 268,508 | 264,367 | 1,046 | 5,187 | ||||||||||||||||||||||||||||||||||||
| Total Newrez Servicing | 799,278 | 797,631 | 786,558 | 1,647 | 12,720 | ||||||||||||||||||||||||||||||||||||
| Serviced by Third-Parties: | |||||||||||||||||||||||||||||||||||||||||
| MSR-owned assets | 51,093 | 54,116 | 58,298 | (3,023) | (7,205) | ||||||||||||||||||||||||||||||||||||
| Total Servicing Portfolio | $ | 850,371 | $ | 851,747 | $ | 844,856 | $ | (1,376) | $ | 5,515 | |||||||||||||||||||||||||||||||
| Agency Servicing: | |||||||||||||||||||||||||||||||||||||||||
| MSR-owned assets | $ | 374,605 | $ | 376,982 | $ | 382,117 | $ | (2,377) | $ | (7,512) | |||||||||||||||||||||||||||||||
| Third-party | 29,638 | 35,996 | 65,372 | (6,358) | (35,734) | ||||||||||||||||||||||||||||||||||||
| Total Agency Servicing | 404,243 | 412,978 | 447,489 | (8,735) | (43,246) | ||||||||||||||||||||||||||||||||||||
| Government-Insured Servicing: | |||||||||||||||||||||||||||||||||||||||||
| MSR-owned assets | 152,626 | 151,676 | 139,936 | 950 | 12,690 | ||||||||||||||||||||||||||||||||||||
| Third-party | 2,799 | 2,859 | 3,084 | (60) | (285) | ||||||||||||||||||||||||||||||||||||
| Total Government-Insured Servicing | 155,425 | 154,535 | 143,020 | 890 | 12,405 | ||||||||||||||||||||||||||||||||||||
| Non-Agency (Private Label) Servicing: | |||||||||||||||||||||||||||||||||||||||||
| MSR-owned assets | 66,398 | 66,875 | 69,089 | (477) | (2,691) | ||||||||||||||||||||||||||||||||||||
| Residential whole loans | 14,151 | 13,413 | 9,556 | 738 | 4,595 | ||||||||||||||||||||||||||||||||||||
| Third-party | 210,154 | 203,946 | 175,702 | 6,208 | 34,452 | ||||||||||||||||||||||||||||||||||||
| Total Non-Agency (Private Label) Servicing | 290,703 | 284,234 | 254,347 | 6,469 | 36,356 | ||||||||||||||||||||||||||||||||||||
| Total Servicing Portfolio | $ | 850,371 | $ | 851,747 | $ | 844,856 | $ | (1,376) | 5,515 | ||||||||||||||||||||||||||||||||
As of March 31, 2026, our performing servicing division serviced approximately $529.7 billion UPB of loans, our special servicing division serviced approximately $269.6 billion UPB of loans and third-party servicers serviced approximately $51.1 billion UPB of loans, for a total servicing portfolio of approximately $850.4 billion UPB. This represented a decrease of approximately $1.4 billion as compared to December 31, 2025, primarily reflecting scheduled and voluntary loan prepayments, partially offset by new client acquisitions and loan production activity, and an increase of $5.5 billion as compared to March 31, 2025, primarily driven by new client acquisitions and loan production activity, partially offset by loan paydowns.
As of March 31, 2026, Newrez serviced approximately 3.7 million customers. The aggregate UPB of loans serviced by Newrez was approximately $799.3 billion, $797.6 billion and $786.6 billion as of March 31, 2026, December 31, 2025 and March 31, 2025, respectively.
As of March 31, 2026, approximately 91.4% of the UPB of residential mortgage loans underlying our owned MSRs was serviced by Newrez. In addition to MSRs serviced by Newrez, we engage third-party subservicers, including PHH and Valon, to perform servicing activities with respect to a portion of the residential mortgage loans underlying our MSRs and MSR financing receivables. As of March 31, 2026, loans serviced by these third-party subservicers had an aggregate UPB of approximately $51.1 billion, representing approximately 8.6% of our total servicing portfolio.
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Our servicing operations also include subservicing activities performed for third-party clients. These services include performing loan servicing, special servicing and recovery services for deeply delinquent loans. Special servicing generally involves higher-touch borrower engagement, more frequent borrower outreach and higher staffing requirements than performing loan servicing, and accordingly results in higher subservicing fees. Subservicing revenues generally consist of tiered servicing fees based on loan delinquency status and performance metrics, as well as ancillary servicing income.
An MSR represents the right to service a pool of residential mortgage loans in exchange for a portion of the interest payments made by borrowers on the underlying loans, together with ancillary servicing income and custodial interest. This servicing right is recognized as an asset on the Company’s consolidated balance sheets. An MSR generally consists of two components: a base servicing fee, which compensates the servicer for performing contractual servicing obligations (including servicing advance obligations), and an Excess MSR, which represents the portion of the servicing fee in excess of the base fee.
We finance our investments in MSRs and MSR financing receivables primarily through short- and medium-term bank facilities and capital markets financings. These borrowings are either recourse or non-recourse obligations and bear interest at either fixed or variable rates based on a specified margin over the Secured Overnight Financing Rate (“SOFR”). Capital markets financings are typically subject to collateral coverage requirements, which are calculated as the ratio of the outstanding note balance to the market value of the underlying collateral. The market value of the collateral is generally updated periodically, and if the collateral coverage ratio exceeds a specified threshold—generally 90%— we may be required to contribute additional collateral, repay a portion of the outstanding debt or post cash to restore compliance. The difference between the applicable collateral coverage ratio and the related trigger level is commonly referred to as a “margin holiday.”
Under applicable servicing agreements, servicers are generally required to advance funds on behalf of borrowers for certain scheduled payments unless the servicer determines in good faith that such advances would not be ultimately recoverable from the proceeds of the related mortgage loan or the underlying property. Servicing advances generally fall into the following categories:
•Principal and interest advances, which represent payments advanced by the servicer to cover scheduled principal and interest payments not paid timely by the borrower;
•Escrow advances, which represent payments advanced by the servicer to third parties for real estate taxes and insurance premiums that have not been paid by the borrower; and
•Foreclosure advances, which represent payments made by the servicer for costs incurred in connection with foreclosure proceedings, property preservation and the disposition of mortgaged properties, including legal and professional fees.
Servicer advances are intended to provide liquidity to the underlying securitization structures rather than credit enhancement. These advances are generally senior in the cash flow waterfall and are typically reimbursed from collections on the related mortgage loan pool, borrower payments or proceeds from the liquidation of the underlying property, referred to as loan-level recoveries. The Company’s right to reimbursement for such advances is reflected as an asset on our consolidated balance sheets within servicer advances receivable.
Prepayments made by borrowers on residential mortgage loans underlying securitizations may generally be used to fund principal and interest advance obligations. Servicing agreements with Fannie Mae, Ginnie Mae and certain private-label securitizations (“PLS”) typically provide for payment waterfalls that permit servicers to apply collections received from prepayments to satisfy advance requirements. This ability reflects timing differences between the servicer’s obligation to remit scheduled payments and the timing of remittance of borrower prepayments. As a result, servicers may effectively use prepayment proceeds to fund advance obligations. In certain circumstances, if advances are determined to be non-recoverable or are not recovered upon loan payoff or property liquidation, the servicer may be entitled to reimburse itself from custodial accounts holding collections on serviced loans, commonly referred to as a “general collections backstop.”
We fund servicing advances primarily through a combination of cash on hand, borrower prepayments and secured financing arrangements. Servicer advances are financed primarily through short- and medium-term, non-recourse committed facilities that are generally not subject to margin calls and bear interest at either fixed or variable rates based on a margin over SOFR. These facilities generally have maturities of less than one year.
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The table below summarizes our MSRs and MSR financing receivables as of March 31, 2026:
| (dollars in billions) | Current UPB | Weighted Average MSR (bps) | Carrying Value | |||||||||||||||||||||||
GSE(A) | $ | 374.6 | 29 | $ | 6.4 | |||||||||||||||||||||
Non-Agency(A) | 66.4 | 42 | 0.9 | |||||||||||||||||||||||
| Ginnie Mae | 152.6 | 48 | 3.5 | |||||||||||||||||||||||
| Total / Weighted Average | $ | 593.6 | 36 | $ | 10.8 | |||||||||||||||||||||
(A)Includes GSE and non-Agency MSRs of $21.0 billion and $30.1 billion underlying UPB, respectively, serviced by third-party subservicers.
The following tables summarize the collateral characteristics of the residential mortgage loans underlying our MSRs and MSR financing receivables as of March 31, 2026 (dollars in thousands):
| Collateral Characteristics | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current Carrying Amount | Current Principal Balance | Number of Loans | WA FICO Score(B) | WA Coupon | WA Maturity (Months) | Average Loan Age (Months) | Adjustable Rate Mortgage %(C) | Three Month Average CPR(D) | Three Month Average CRR(E) | Three Month Average CDR(F) | Three Month Average Recapture Rate | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GSE(A) | $ | 6,398,083 | $ | 374,604,926 | 1,905,112 | 772 | 4.4 | % | 268 | 68 | 0.9 | % | 7.7 | % | 7.6 | % | — | % | 17.0 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
Non-Agency(A) | 914,163 | 66,397,709 | 547,031 | 672 | 4.6 | % | 273 | 205 | 7.7 | % | 7.4 | % | 6.0 | % | 1.4 | % | 4.0 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ginnie Mae | 3,547,687 | 152,626,485 | 601,985 | 705 | 4.5 | % | 312 | 45 | 0.3 | % | 8.4 | % | 8.1 | % | 0.3 | % | 33.6 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 10,859,933 | $ | 593,629,120 | 3,054,128 | 744 | 4.4 | % | 280 | 77 | 1.5 | % | 7.8 | % | 7.6 | % | 0.2 | % | 19.8 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Collateral Characteristics | |||||||||||||||||||||||||||||||||||
| Delinquency | Loans in Foreclosure | REO | Loans in Bankruptcy | ||||||||||||||||||||||||||||||||
90+ Days(G) | |||||||||||||||||||||||||||||||||||
GSE(A) | 0.3 | % | 0.2 | % | 0.1 | % | 0.2 | % | |||||||||||||||||||||||||||
Non-Agency(A) | 2.0 | % | 4.7 | % | 0.7 | % | 2.5 | % | |||||||||||||||||||||||||||
| Ginnie Mae | 2.9 | % | 1.4 | % | 0.1 | % | 0.7 | % | |||||||||||||||||||||||||||
| Weighted Average | 1.2 | % | 1.0 | % | 0.1 | % | 0.6 | % | |||||||||||||||||||||||||||
(A)Includes GSE and non-Agency MSRs of $21.0 billion and $30.1 billion underlying UPB, respectively, serviced by third-party subservicers.
(B)Based on the weighted average (“WA”) of information provided by the loan servicer on a monthly basis. The loan servicer generally updates the Fair Isaac Corporation (“FICO”) score when loans are refinanced or become delinquent.
(C)Represents the percentage of the total principal balance of the pool that corresponds to adjustable rate mortgages.
(D)The conditional prepayment rate (“CPR”) represents the annualized rate of the prepayments during the quarter as a percentage of the total principal balance of the pool.
(E)The conditional repayment rate (“CRR”) represents the annualized rate of the voluntary prepayments during the quarter as a percentage of the total principal balance of the pool.
(F)The conditional default rate (“CDR”) represents the annualized rate of the involuntary prepayments (defaults) during the quarter as a percentage of the total principal balance of the pool.
(G)Represents the percentage of the total principal balance of the pool that corresponds to loans that are delinquent by 90 or more days.
See Note 5 to our consolidated financial statements for additional information regarding our MSRs, MSR financing receivables and servicer advances receivable, and Note 17 for additional information regarding the related financing arrangements.
Hedging Activities
Government and Government-Backed Securities
Our Origination and Servicing segment also includes investments in Agency RMBS and U.S. Treasury securities, which are primarily held to hedge interest rate exposure associated with our MSR portfolio and to support REIT asset and income requirements. These investments are financed primarily through short-term repurchase agreements.
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The following table summarizes our Agency RMBS and U.S. Treasury securities portfolio as of and for the three months ended March 31, 2026 (dollars in thousands):
| Gross Unrealized | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Asset Type | Outstanding Face Amount | Amortized Cost Basis | Gains | Losses | Carrying Value(A) | Count | Weighted Average Life (Years) | 3-Month CPR(B) | Outstanding Repurchase Agreements | |||||||||||||||||||||||||||||||||||||||||||||||
| Agency RMBS | $ | 5,101,409 | $ | 4,987,176 | $ | 65,914 | $ | (11,321) | $ | 5,041,769 | 23 | 7.4 | 8.1 | % | $ | 5,023,687 | ||||||||||||||||||||||||||||||||||||||||
| Treasury securities | 25,000 | 24,985 | — | — | 24,985 | 1 | 0.0 | N/A | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Total / Weighted Average | $ | 5,126,409 | $ | 5,012,161 | $ | 65,914 | $ | (11,321) | $ | 5,066,754 | 24 | 7.4 | $ | 5,023,687 | ||||||||||||||||||||||||||||||||||||||||||
(A)Agency RMBS are held at fair value under the fair value option election. Treasury securities include $25.0 million of short-term Treasury bills held-to-maturity at amortized cost.
(B)Represents the annualized rate of the prepayments during the quarter as a percentage of the total amortized cost basis.
The following table summarizes the net interest spread of our government and government-backed securities portfolio as of March 31, 2026:
Net Interest Spread(A) | ||||||||
| Weighted average asset yield | 5.0 | % | ||||||
| Weighted average funding cost | 3.9 | % | ||||||
| Net Interest Spread | 1.1 | % | ||||||
(A)The government and government-backed securities portfolio consists of 100% fixed-rate securities.
To-Be-Announced Forward Contract Positions (“TBAs”)
In addition to holding government and government-backed securities, we use other hedging instruments, primarily TBAs, to economically hedge interest rate exposure associated with our MSR portfolio. The following table summarizes the notional and carrying value amounts of our TBAs:
| March 31, 2026 | December 31, 2025 | ||||||||||
| Notional | $ | 24,630,958 | $ | 21,568,758 | |||||||
| Carrying Value: | |||||||||||
| TBAs - asset | 93,074 | 6,070 | |||||||||
| TBAs - liability | 9,989 | 47,001 | |||||||||
Ancillary Mortgage Services
In addition to origination and servicing activities, this segment includes operations conducted through subsidiaries that provide mortgage- and real estate-related services, including Guardian (property preservation and field services), eStreet (appraisal services) and Avenue 365 (title and settlement services).
Residential Transitional Lending
The Residential Transitional Lending segment operates through Genesis, a wholly owned Rithm subsidiary that originates and manages short-term, business-purpose mortgage loans secured by residential real estate. Genesis is the second-largest U.S. residential transitional lender based on management's estimates of total origination volume.
The originated loans are used by real estate investors and developers to finance transitional projects, including:
•Construction — ground-up construction, including mid-construction refinancings and acquisitions of ground-up construction projects;
•Renovation — acquisition or refinance of properties requiring renovation, excluding ground-up construction; and
•Bridge — financing for purchases, refinances of completed projects or rental properties.
We currently fund construction, renovation and bridge originations primarily through a warehouse credit facility and revolving securitization structures.
Collateral and underwriting. The loans are generally secured by a mortgage or first deed of trust on the underlying real estate. Commitment sizing is determined under our lending policies and is typically based on (i) loan-to-cost (“LTC”) or loan-to-after-
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repair value (“LTARV”) for construction and renovation loans and (ii) loan-to-value (“LTV”) for bridge loans. LTC and LTARV are generally calculated as the total commitment at origination divided by the total estimated project cost or the value of the property after completion of renovations, as applicable. LTV is generally calculated as the total commitment at origination divided by the “as-complete” appraisal. At origination, we typically fund a portion of the commitment at closing and hold back the remaining amount for future draws, subject to inspections, progress reporting and other conditions in the loan documents. These ratios do not reflect interim activity such as construction draws, interest capitalization or partial repayments.
Credit support. Loans are typically supported by a corporate and/or personal guarantee, which may be further secured by a pledge of the guarantor’s interests in the borrower and/or other real estate or assets owned by the guarantor.
Loan economics and terms. Commitments are generally interest-only and bear a variable rate based on SOFR plus a spread (generally ranging from 4% to 17%), with initial terms typically ranging from 6 to 120 months, depending on project size and expected completion timeline. We may extend loans based on our assessment of project status and other underwriting considerations. As of March 31, 2026, the average commitment size was $5.2 million, and the weighted average remaining term to contractual maturity was 13.8 months.
We earn loan origination fees (“points”), which are generally based on the loan term, borrower profile and collateral characteristics. As of March 31, 2026, we earned an average of 1.2% of total commitment at origination. We also may earn past-due fees, cost reimbursements (including for closing, collection and inspection-related expenses), extension fees for renewals or extensions, and amendment fees for loan modifications. Renewals and extensions are generally evaluated under our then-current underwriting criteria, including applicable LTV limitations based on the origination appraisal or an updated appraisal when required. Origination and renewal fees are recognized as income at origination as residential transition loans (“RTLs”) are measured at fair value.
Borrowers and use of proceeds. Borrowers are typically residential real estate investors and developers. Proceeds are generally used to fund construction, renovation, development, acquisition, refinancing and, to a lesser extent, mixed-use projects. Loans are typically structured with partial funding at closing and additional advances disbursed upon completion of agreed construction milestones.
A significant source of new originations has historically been repeat business and referrals. To the extent we originate loans for existing borrowers, these “retention” originations may have lower acquisition costs than originations to new borrowers, which can positively affect profitability.
The following table summarizes certain information related to our portfolio of loans included in the Residential Transitional Lending segment (dollars in thousands):
| Three Months Ended | |||||||||||
| March 31, 2026 | December 31, 2025 | ||||||||||
Loans originated(A) | $ | 1,607,882 | $ | 1,421,962 | |||||||
| Loans repaid | $ | 652,248 | $ | 883,078 | |||||||
| Number of loans originated | 487 | 463 | |||||||||
| As of | |||||||||||
| March 31, 2026 | December 31, 2025 | ||||||||||
Carrying value(B) | $ | 4,438,160 | $ | 3,914,674 | |||||||
| UPB | $ | 4,421,602 | $ | 3,886,696 | |||||||
| Total commitment | $ | 6,492,269 | $ | 5,791,861 | |||||||
Average total commitment(C) | $ | 3,913 | $ | 3,571 | |||||||
Weighted average contractual interest(D) | 9.0 | % | 8.9 | % | |||||||
(A)Based on total commitment at origination.
(B)Includes residential transition loans of consolidated entities of approximately $1.2 billion as of March 31, 2026 and December 31, 2025.
(C)Represents the calculated amount of total commitment divided by the total number of loans in the Residential Transitional Lending segment.
(D)Excludes loan fees and weighted by current UPB.
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The following table summarizes the loan purpose of our portfolio of loans included in the Residential Transitional Lending segment (dollars in thousands):
| March 31, 2026 | |||||||||||||||||||||||||||||
| Number of Loans | % of Loans | Total Commitment | % of Total Commitment | Weighted Average Committed Loan Balance to Value(A) | |||||||||||||||||||||||||
| Construction | 523 | 31.5 | % | $ | 3,420,828 | 52.7 | % | 72.7% / 62.0% | |||||||||||||||||||||
| Bridge | 560 | 33.8 | % | 2,247,461 | 34.6 | % | 67.4% | ||||||||||||||||||||||
| Renovation | 576 | 34.7 | % | 823,980 | 12.7 | % | 80.5% / 66.3% | ||||||||||||||||||||||
| Total | 1,659 | 100.0 | % | $ | 6,492,269 | 100.0 | % | N/A | |||||||||||||||||||||
(A)Weighted by commitment LTV for bridge loans and LTC and LTARV for construction and renovation loans.
See Note 10 to our consolidated financial statements for additional information, including a summary of activity related to residential transition loans from December 31, 2025 to March 31, 2026.
Asset Management
The Asset Management segment provides investment management and advisory services across a range of alternative investment strategies, including private credit, opportunistic credit, fund liquidity solutions, real estate and insurance-related strategies. These activities are conducted primarily through RAM. RAM operates its asset management activities through its wholly owned subsidiaries, including Sculptor, Crestline and the Rithm Advisers, which serve as investment advisers to a range of investment vehicles and managed accounts, including Rithm Property Trust and R-HOME, and generate primarily fee-based revenues.
As of March 31, 2026, the Asset Management segment managed approximately $59 billion in assets under management (“AUM”), of which $37 billion and $19 billion was managed by Sculptor and Crestline, respectively.
Revenues
Revenues in the Asset Management segment consist primarily of management fees and incentive income.
Management fees are generally calculated as a percentage of AUM or invested capital, depending on the structure and governing documents of the applicable investment vehicle, and are typically earned and recognized on a quarterly basis, either in advance or in arrears. Management fees, where applicable, are generally prorated for capital inflows and redemptions during the relevant period.
Incentive income is performance-based and is generally calculated as a percentage of investment profits attributable to fund investors, net of management fees. Incentive income arrangements may be subject to contractual provisions such as hurdle rates, high-water marks and catch-up mechanisms, and incentive income is typically recognized later in the life cycle of an investment vehicle or upon crystallization events. As a result, incentive income may be uneven across reporting periods.
Period-to-period changes in Asset Management revenues are driven primarily by changes in AUM resulting from capital inflows and redemptions, investment performance, market conditions and the timing and realization of incentive income.
Expenses
Expenses in the Asset Management segment consist primarily of compensation and benefits for investment professionals and support personnel, general, administrative and operating expenses, technology and infrastructure costs, professional fees and acquisition-related and integration expenses, where applicable.
Compensation expense may fluctuate based on headcount, compensation structure, performance-based incentives and revenue levels. Period-to-period changes in expenses may also reflect changes in AUM, investments in systems, risk management and compliance infrastructure and costs associated with launching new investment products or integrating acquired businesses.
Operating Results
Operating results for the Asset Management segment are driven by the relationship between revenue growth and expense levels, as well as the mix of management fees and incentive income recognized during the period. Market conditions, investor sentiment and asset valuations may affect both revenues and profitability. In addition, the timing of incentive income
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recognition and acquisition-related amortization and integration costs may result in variability in operating results between periods.
Operating expenses during the period primarily reflected compensation and benefits, amortization of intangible assets, and office and professional expenses.
Assets Under Management
AUM represents the assets for which we provide investment management, advisory or certain other investment-related services. AUM generally includes (i) the net asset value of managed accounts, open-ended and closed-end funds or the gross asset value of real estate and real estate funds, (ii) uncalled capital commitments and (iii) par value of structured credit vehicles (e.g., collateralized loan obligations). AUM includes amounts that are not subject to management fees, incentive income or other amounts earned on AUM. AUM also includes amounts that are invested in other affiliated funds/vehicles. Rithm Capital's calculation of AUM is intended to provide a consistent and comparable measure of managed assets across its businesses; however, it is not based on any specific regulatory definition and may differ from similarly titled measures presented by other asset managers and, as a result, may not be comparable.
Growth in AUM and positive investment performance generally support growth in Asset Management revenues and earnings, while adverse investment performance or sustained investor redemptions may reduce AUM and negatively affect revenues and profitability.
Key Operating Metrics
Management monitors the performance of the Asset Management segment using AUM, net capital inflows and redemptions, management fee rates, incentive income realization and operating margins.
Investment Portfolio
Our Investment Portfolio segment primarily consists of balance sheet investments in residential mortgage loans, SFR properties, consumer loans, non-Agency securities, Excess MSRs and servicer advance investments.
Excess MSRs
Investments in Excess MSRs represent the portion of the mortgage servicing compensation that exceeds the base servicing fee. Our Excess MSR assets include our ownership interests in Excess MSRs and related recapture agreements that were acquired from, and are serviced by, Rocket, as successor by merger to Mr. Cooper.
The following tables summarize the terms of our Excess MSRs:
MSR Component(A) | Excess MSR Carrying Value (millions) | |||||||||||||||||||||||||||||||||||||
| Direct Excess MSRs | Current UPB (billions)(B) | Weighted Average MSR (bps) | Weighted Average Excess MSR (bps) | Interest in Excess MSR (%) | March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||
| Total / Weighted Average | $ | 46.6 | 32 | 20 | 65.0% – 80.0% | $ | 314.9 | $ | 323.6 | |||||||||||||||||||||||||||||
(A)The MSR is a weighted average as of March 31, 2026 and the Excess MSR represents the difference between the weighted average MSR and the base fee (which fee remains constant).
(B)Represents Excess MSRs serviced by Rocket. We also invested in related servicer advance investments, including the base fee component of the related MSR on $11.6 billion UPB underlying these Excess MSRs.
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The following tables summarize the collateral characteristics of the loans underlying our direct Excess MSRs and the Excess MSRs held in a joint venture with Sculptor non-consolidated funds as of March 31, 2026 (dollars in thousands):
| Collateral Characteristics | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current Carrying Amount | Current Principal Balance | Number of Loans | WA FICO Score(A) | WA Coupon | WA Maturity (Months) | Average Loan Age (Months) | Three Month Average CPR(B) | Three Month Average CRR(C) | Three Month Average CDR(D) | Three Month Average Recapture Rate | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total / Weighted Average | $ | 314,933 | $ | 46,627,179 | 389,042 | 719 | 4.6 | % | 218 | 173 | 6.6 | % | 6.3 | % | 0.4 | % | 12.1 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Collateral Characteristics | |||||||||||||||||||||||||||||||||||
| Delinquency | Loans in Foreclosure | REO | Loans in Bankruptcy | ||||||||||||||||||||||||||||||||
90+ Days(E) | |||||||||||||||||||||||||||||||||||
Weighted Average(F) | 0.8 | % | 1.4 | % | 0.2 | % | 0.6 | % | |||||||||||||||||||||||||||
(A)Based on the weighted average of information provided by the loan servicer on a monthly basis. The loan servicer generally updates the FICO score when loans are refinanced or become delinquent.
(B)Represents the annualized rate of the prepayments during the quarter as a percentage of the total principal balance of the pool.
(C)Represents the annualized rate of the voluntary prepayments during the quarter as a percentage of the total principal balance of the pool.
(D)Represents the annualized rate of the involuntary prepayments (defaults) during the quarter as a percentage of the total principal balance of the pool.
(E)Represents the percentage of the total principal balance of the pool that corresponds to loans that are delinquent by 90 or more days.
(F)Weighted averages exclude collateral information for which collateral data was not available as of the report date.
Servicer Advance Investments
Our servicer advance investments relate to specified pools of residential mortgage loans for which we have contractually assumed the obligation to fund servicing advances. These investments include (i) the outstanding servicer advances associated with the specified pools, (ii) commitments to purchase future servicer advances and (iii) the right to receive the base servicing fee component of the related MSRs.
The following is a summary of our servicer advance investments, including the right to the base fee component of the related MSRs (dollars in thousands):
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| Amortized Cost Basis | Carrying Value(A) | UPB of Underlying Residential Mortgage Loans | Outstanding Servicer Advances | Servicer Advances to UPB of Underlying Residential Mortgage Loans | Carrying Value(A) | ||||||||||||||||||||||||||||||
| Servicer advance investments | $ | 273,459 | $ | 284,260 | $ | 11,568,977 | $ | 252,683 | 2.2 | % | $ | 294,322 | |||||||||||||||||||||||
(A)Represents the fair value of the servicer advance investments, including the base fee component of the related MSRs.
The following summarizes additional information regarding our servicer advance investments and related financing, as of and for the three months ended March 31, 2026 (dollars in thousands):
| Weighted Average Discount Rate | Weighted Average Life (Years)(C) | Face Amount of Secured Notes and Bonds Payable | LTV(A) | Cost of Funds(B) | ||||||||||||||||||||||||||||||||||||||||||||||
| Gross | Net(D) | Gross | Net | |||||||||||||||||||||||||||||||||||||||||||||||
Servicer advance investments(E) | 6.5 | % | 7.1 | $ | 212,172 | 82.5 | % | 85.3 | % | 6.2 | % | 5.1 | % | |||||||||||||||||||||||||||||||||||||
(A)Based on outstanding servicer advances, excluding purchased but unsettled servicer advances.
(B)Represents the annualized measure of the cost associated with borrowings. Gross cost of funds primarily includes interest expense and facility fees. Net cost of funds excludes facility fees.
(C)Represents the weighted average expected timing of the receipt of expected net cash flows for this investment.
(D)Ratio of face amount of borrowings to par amount of servicer advance collateral, net of any general reserve.
(E)The following table summarizes the types of advances included in servicer advance investments (dollars in thousands):
| March 31, 2026 | ||||||||
| Principal and interest advances | $ | 39,304 | ||||||
| Escrow advances (taxes and insurance advances) | 117,798 | |||||||
| Foreclosure advances | 95,581 | |||||||
| Total | $ | 252,683 | ||||||
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Non-Agency Securities
Within our non-Agency securities portfolio, we retain and hold certain risk retention bonds from securitizations that we do not consolidate, in compliance with applicable risk retention requirements under the Dodd-Frank Act and the rules promulgated thereunder. We also hold bonds issued in connection with our consolidated PLS, which are eliminated in consolidation. The related equity value is reflected within assets of consolidated entities and liabilities of consolidated entities on our consolidated balance sheets and is excluded from the tables below. As of March 31, 2026, approximately 80.6% of our non-Agency securities portfolio consisted of bonds retained to satisfy risk retention requirements.
The following table summarizes our non-Agency securities portfolio (dollars in thousands):
As of and for the Three Months Ended March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||
| Asset Type | Outstanding Face Amount(A) | Amortized Cost Basis | Gross Unrealized | Carrying Value(B) | Outstanding Repurchase Agreements(C) | Carrying Value(B) | ||||||||||||||||||||||||||||||||||||||
| Gains | Losses | |||||||||||||||||||||||||||||||||||||||||||
| Non-Agency securities | $ | 8,582,596 | $ | 779,693 | $ | 99,628 | $ | (44,988) | $ | 834,332 | $ | 960,358 | $ | 759,633 | ||||||||||||||||||||||||||||||
(A)The total outstanding face amount includes residual, interest only and servicing strips for which no principal payment is expected.
(B)Carrying value which is equal to the fair value for all securities.
(C)Includes repurchase agreements on non-Agency securities retained through consolidated securitizations.
The following table summarizes the characteristics of our non-Agency securities portfolio and of the collateral underlying our non-Agency securities as of March 31, 2026 (dollars in thousands):
Collateral Characteristics(A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Outstanding Face Amount | Amortized Cost Basis | Carrying Value | Number of Securities | Weighted Average Life (Years) | Weighted Average Coupon(B) | Average Loan Age (Years) | Collateral Factor(C) | Three Month CPR(D) | Delinquency(D) | Cumulative Losses to Date | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total / weighted average | $ | 8,582,596 | $ | 779,693 | $ | 834,332 | 658 | 4.1 | 4.6 | % | 12.9 | 0.5 | 9.0 | % | 2.7 | % | 0.7 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
(A)Excludes $156.0 million carrying value of non-Agency securities that are backed by assets other than residential mortgages.
(B)Excludes interest only, residual and other bonds with a carrying value of $175.1 million for which no coupon payment is expected.
(C)Represents the ratio of original UPB of loans still outstanding.
(D)Three-month average constant prepayment rate and default rates.
The following table summarizes the net interest spread of our non-Agency securities portfolio as of March 31, 2026:
Net Interest Spread(A) | |||||
| Weighted average asset yield | 5.8 | % | |||
| Weighted average funding cost | 5.2 | % | |||
| Net Interest Spread | 0.6 | % | |||
(A)The non-Agency securities portfolio consists of 30.9% floating rate securities and 69.1% fixed-rate securities (accounted for on an amortized cost basis).
We finance a significant portion of our non-Agency securities investments through short-term borrowings under master uncommitted repurchase agreements. These borrowings generally bear interest at rates offered by counterparties for the applicable repurchase term (for example, 30 or 60 days), typically calculated as a specified margin over SOFR. As of March 31, 2026 and December 31, 2025, we had pledged non-Agency securities, including securities retained through consolidated securitizations, with an aggregate carrying value of approximately $1.4 billion and $1.3 billion, respectively, as collateral for repurchase agreement borrowings.
A portion of the collateral securing these borrowings is subject to daily mark-to-market valuation and related margin calls. The remaining collateral generally is not subject to daily margin calls unless the collateral coverage percentage—calculated as the current carrying value of outstanding debt divided by the market value of the underlying collateral—reaches or exceeds a specified collateral trigger. The difference between the collateral coverage percentage and the collateral trigger is commonly referred to as a “margin holiday.” See Note 17 to our consolidated financial statements for additional information regarding our non-Agency securities financing arrangements, including a summary of related activity from December 31, 2025 to March 31, 2026.
Residential Mortgage Loans
We accumulate our residential mortgage loan portfolio through loan originations, open-market and bulk acquisitions, and the exercise of call rights. Substantially all of these loans are serviced by Newrez.
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We account for residential mortgage loans based on our strategy for each loan and whether the loan was performing or non-performing at acquisition. Acquired performing loans are loans for which, at the time of acquisition, we believe the borrower is likely to continue making payments in accordance with the contractual terms. Purchased non-performing loans are loans for which, at the time of acquisition, we believe the borrower is not likely to make payments in accordance with the contractual terms (i.e., credit-impaired).
Residential mortgage loans are reported in the following categories:
•Loans held-for-investment (“HFI”), at fair value;
•Loans HFS, at lower of cost or fair value;
•Loans HFS, at fair value; and
•Investments of consolidated CFEs, which represent mortgage loans held by certain PLS trusts that we consolidate because we are determined to be the primary beneficiary. Under the CFE election, these assets are measured based on the fair value of the more observable liabilities of the consolidated CFEs. The assets of the consolidated CFEs may be used only to settle the obligations of the respective CFEs, and creditors of the CFEs do not have recourse to Rithm Capital Corp.
As of March 31, 2026, we held approximately $5.1 billion of outstanding face amount of residential mortgage loans classified as residential mortgage loans on our consolidated balance sheets (see below). These investments were financed in part through secured financing agreements with an aggregate face amount of approximately $4.6 billion. Our acquisitions during the period included open-market purchases, originations through Newrez, bulk acquisitions and loans acquired through the exercise of call rights.
The following table presents the total residential mortgage loans outstanding by loan type (dollars in thousands):
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||
| Outstanding Face Amount | Carrying Value | Loan Count | Weighted Average Yield | Weighted Average Life (Years)(A) | Carrying Value | |||||||||||||||||||||||||||||||||
Investments of consolidated CFEs(B) | $ | 3,243,943 | $ | 3,137,744 | 8,090 | 6.0 | % | 25.8 | $ | 3,265,142 | ||||||||||||||||||||||||||||
| Residential mortgage loans, HFI, at fair value | $ | 337,179 | $ | 308,284 | 6,474 | 7.7 | % | 3.5 | $ | 324,688 | ||||||||||||||||||||||||||||
| Residential Mortgage Loans, HFS: | ||||||||||||||||||||||||||||||||||||||
| Acquired performing loans | 47,285 | 42,904 | 1,467 | 6.6 | % | 3.3 | 45,861 | |||||||||||||||||||||||||||||||
Acquired non-performing loans(C) | 14,097 | 11,834 | 160 | 8.7 | % | 3.0 | 10,930 | |||||||||||||||||||||||||||||||
| Residential mortgage loans, HFS | 61,382 | 54,738 | 1,627 | 7.1 | % | 3.2 | 56,791 | |||||||||||||||||||||||||||||||
| Residential Mortgage Loans, HFS, at Fair Value: | ||||||||||||||||||||||||||||||||||||||
Acquired performing loans(D) | 953,717 | 960,281 | 2,509 | 6.2 | % | 10.8 | 1,612,154 | |||||||||||||||||||||||||||||||
Acquired non-performing loans(C)(E) | 422,929 | 395,504 | 1,692 | 5.4 | % | 27.8 | 299,413 | |||||||||||||||||||||||||||||||
| Originated loans | 3,364,858 | 3,418,934 | 10,525 | 6.2 | % | 28.6 | 3,515,914 | |||||||||||||||||||||||||||||||
| Residential mortgage loans, HFS, at fair value | 4,741,504 | 4,774,719 | 14,726 | 6.1 | % | 24.9 | 5,427,481 | |||||||||||||||||||||||||||||||
| Total Residential Mortgage Loans | $ | 5,140,065 | $ | 5,137,741 | 22,827 | $ | 5,808,960 | |||||||||||||||||||||||||||||||
(A)For loans classified as Level 3 in the fair value hierarchy, the weighted average life is based on the expected timing of the receipt of cash flows. For Level 2 loans, the weighted average life is based on the contractual term of the loan.
(B)Residential mortgage loans of consolidated CFEs are classified as Level 2 in the fair value hierarchy and valued based on the fair value of the more observable financial liabilities under the CFE election.
(C)Loans are generally placed on non-accrual status when principal or interest is 90 days or more past due.
(D)Includes $216.8 million UPB of Ginnie Mae early buyout options.
(E)Includes $414.2 million UPB of Ginnie Mae early buyout options on accrual status as recovery of contractual cash flows are guaranteed by the FHA as of March 31, 2026.
We evaluate the credit quality of our residential mortgage loan portfolio using indicators that include delinquency status, LTV ratios and geographic concentration.
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We finance a significant portion of our residential mortgage loan investments through repurchase agreements. These recourse borrowings generally bear variable interest rates for the term of the applicable repurchase transaction (typically less than one year) at a specified margin over SOFR. As of March 31, 2026 and December 31, 2025, we had pledged residential mortgage loans with a carrying value of approximately $5.1 billion and $5.8 billion, respectively, as collateral for borrowings under repurchase agreements. Certain of these financings are subject to daily mark-to-market adjustments and related margin calls. Other financings are not subject to daily margin calls unless the collateral coverage percentage—calculated as the current carrying value of outstanding debt divided by the market value of the underlying collateral—reaches or exceeds a specified trigger. The difference between the collateral coverage percentage and the applicable trigger is referred to as a “margin holiday.” See Note 17 to our consolidated financial statements for additional information regarding the financing of our residential mortgage loans, including a summary of related activity from December 31, 2025 to March 31, 2026.
See Note 7 to our consolidated financial statements for additional information regarding our residential mortgage loans, including a summary of related activity from December 31, 2025 to March 31, 2026.
Consumer Loans
The tables below summarize the carrying value of our consumer loans and present selected collateral characteristics for our consumer loan portfolio. This portfolio includes (i) the Upgrade loans, (ii) the Marcus loans and (iii) the SpringCastle loans. These loans are held by Rithm Capital through certain limited liability companies.
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||
| UPB | Carrying Value | Weighted Average Coupon | Weighted Average Expected Life (Years) | Carrying Value | |||||||||||||||||||||||||
| SpringCastle | $ | 154,569 | $ | 155,406 | 18.0 | % | 3.5 | $ | 167,807 | ||||||||||||||||||||
| Marcus | 258,897 | 128,884 | 11.2 | % | 0.6 | 166,473 | |||||||||||||||||||||||
| Upgrade | 544,915 | 521,004 | 13.4 | % | 10.8 | 450,119 | |||||||||||||||||||||||
| Total Consumer Loans | $ | 958,381 | $ | 805,294 | 13.6 | % | 6.9 | $ | 784,399 | ||||||||||||||||||||
| March 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Number of Loans | Adjustable Rate Loan % | Average Loan Age (Months) | Delinquency 90+ Days(A) | 12-Month CRR(B) | 12-Month CDR(C) | ||||||||||||||||||||||||||||||||||||||||||||||||
| SpringCastle | 27,283 | 14.8 | % | 258 | 1.9 | % | 13.6 | % | 5.5 | % | |||||||||||||||||||||||||||||||||||||||||||
| Marcus | 100,702 | — | % | 46 | 55.9 | % | 23.4 | % | 2.9 | % | |||||||||||||||||||||||||||||||||||||||||||
| Upgrade | 52,471 | — | % | 7 | 0.1 | % | 30.3 | % | 1.1 | % | |||||||||||||||||||||||||||||||||||||||||||
| Total / Weighted Average | 180,456 | 2.4 | % | 58 | 15.5 | % | 25.7 | % | 2.3 | % | |||||||||||||||||||||||||||||||||||||||||||
(A) Represents the percentage of the total principal balance of the pool that corresponds to loans that are delinquent by 90 or more days.
(B) Represents the annualized rate of the voluntary prepayments during the three months as a percentage of the total principal balance of the pool.
(C) Represents the annualized rate of the involuntary prepayments (defaults) during the three months as a percentage of the total principal balance of the pool.
We finance our consumer loan investments through a combination of securitization and secured borrowing arrangements. The SpringCastle loans are financed with securitized, non-recourse long-term notes with a stated maturity date of September 2037. The Marcus loans are financed with long-term notes with a stated maturity date of June 2028. The Upgrade loans are financed primarily through a secured revolving credit facility that matures in July 2026. See Note 17 to our consolidated financial statements for further information regarding the financing of our consumer loans, including a summary of activity from December 31, 2025 to March 31, 2026.
See Note 8 to our consolidated financial statements for additional information, including a summary of activity related to consumer loans from December 31, 2025 to March 31, 2026.
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Single-Family Rental Properties
As of March 31, 2026, our SFR portfolio consisted of approximately 4,025 properties with an aggregate carrying value of approximately $1.0 billion. The SFR portfolio generates rental income under lease agreements that typically have initial terms of one to two years. Operating results are influenced by rental rates, occupancy levels, tenant turnover and local market conditions. We incur ongoing operating expenses associated with the portfolio, including property taxes, insurance, maintenance and property management costs. Our SFR property acquisitions were financed through a combination of credit facilities, term loans and securitization structures. See Note 17 to our consolidated financial statements for additional information regarding the financing of our SFR properties.
Our Investment Portfolio segment also includes results from certain wholly owned subsidiaries and minority investments that provide services across the mortgage and real estate sectors. This includes our strategic partnership with Darwin through APM, which provides property management services. All of our SFR properties are currently managed by APM.
Commercial Real Estate
Following the Elecor Acquisition in December 2025, we own and operate a portfolio of Class A office properties in New York City and San Francisco, which are managed as part of our broader real estate platform, totaling approximately 12.2 million square feet.
The key metrics related to Elecor CRE properties are included in the tables below.
Quarterly Leasing Information:
| Three Months Ended March 31, 2026 | Period from December 19, 2025 to December 31, 2025(A) | ||||||||||
| Lease count | 9 | 3 | |||||||||
| Sq ft leased (total) | 103,143 | 54,010 | |||||||||
| Rithm Capital’s share (sq ft) | 67,432 | 24,699 | |||||||||
| Weighted average initial rent ($ per sq ft) | $ | 96.11 | $ | 71.17 | |||||||
| Weighted average lease term (years) | 9.2 | 1.3 | |||||||||
(A) Represents activity from December 19, 2025, the Elecor acquisition date, through December 31, 2025.
Same Store Leased Occupancy:
| March 31, 2026 | December 31, 2025 | ||||||||||
| New York City | 92.1 | % | 92.8 | % | |||||||
| San Francisco | 59.1 | % | 62.2 | % | |||||||
| Total | 85.7 | % | 86.9 | % | |||||||
Same store leased occupancy (core properties owned by Elecor in a similar manner during both reporting periods) across the Elecor portfolio was 85.7% as of March 31, 2026, compared to 86.9% as of December 31, 2025, a decrease of 120 basis points. This decrease was driven primarily by lease expirations in the three months, partially offset by new leases executed across the portfolio. Year-to-date leasing activity has been executed at rents 16.7% above the full-year 2025 average, reflecting improving tenant demand for premier Class A office space across the Elecor portfolio.
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Lease Expiration Schedule:
| Year of Expiration | Expiring Sq Ft(A) | % of Total Sq Ft | Annualized Base Rent (in millions)(A) | % of Total Portfolio ABR | |||||||||||||||||||||||||
| April 1 through December 31, 2026 | 377,390 | 5.6 | % | $ | 36,379 | 6.1 | % | ||||||||||||||||||||||
| 2027 | 209,532 | 3.1 | % | 18,791 | 3.2 | % | |||||||||||||||||||||||
| 2028 | 167,121 | 2.5 | % | 13,649 | 2.3 | % | |||||||||||||||||||||||
| 2029 | 508,543 | 7.5 | % | 42,593 | 7.2 | % | |||||||||||||||||||||||
| 2030 | 497,143 | 7.3 | % | 49,224 | 8.3 | % | |||||||||||||||||||||||
| 2031 and thereafter | 5,028,360 | 74.0 | % | 432,421 | 72.9 | % | |||||||||||||||||||||||
| Total | 6,788,089 | 100.0 | % | $ | 593,057 | 100.0 | % | ||||||||||||||||||||||
(A) Amounts are presented at Rithm share.
CRITICAL ACCOUNTING POLICIES AND USE OF ESTIMATES
Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP” or “U.S. GAAP”). The preparation of financial statements in conformity with GAAP requires the use of estimates and assumptions that could affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses. Actual results could differ from these estimates. We believe that the estimates and assumptions utilized in the preparation of the consolidated financial statements are prudent and reasonable. Actual results historically have generally been in line with our estimates and judgments used in applying each of the accounting policies described below, as modified periodically to reflect current market conditions.
The mortgage and financial sectors operate in a challenging and uncertain economic environment. Financial and real estate companies continue to be affected by, among other things, market volatility, heightened interest rates and inflationary pressures. We believe the estimates and assumptions underlying our consolidated financial statements are reasonable and supportable based on the information available as of March 31, 2026; however, uncertainty over the current macroeconomic conditions makes any estimates and assumptions as of March 31, 2026, inherently less certain than they would be absent the current economic environment. Actual results may materially differ from those estimates. Market volatility and inflationary pressures and their impact on the current financial, economic and capital markets environment and future developments in these and other areas present uncertainty and risk with respect to our financial condition, results of operations, liquidity and ability to pay distributions.
Our critical accounting policies as of March 31, 2026, which represent our accounting policies that are most affected by judgments, estimates and assumptions, included all of the critical accounting policies referred to in the 2025 Form 10-K.
RECENT ACCOUNTING PRONOUNCEMENTS
See Note 2 to our consolidated financial statements in this Quarterly Report on Form 10-Q.
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RESULTS OF OPERATIONS
Factors Impacting Comparability of Our Results of Operations
Our net income is primarily generated from net interest income, servicing fee revenue less cost to service, gain on sale of loans less cost to originate, asset management fees less expenses, and property rental revenue less operating costs. Changes in various factors such as market interest rates, prepayment speeds, estimated future cash flows, servicing costs and credit quality could affect the amount of basis premium to be amortized or discount to be accreted into interest income for a given period. Prepayment speeds vary according to the type of investment, conditions in the financial markets, competition and other factors, none of which can be predicted with any certainty. Additionally, changes in these inputs along with other factors such as delinquency rates and recapture rates may significantly impact the fair value of our MSRs and as a result, our earnings. Our operating results may also be affected by credit losses in excess of initial estimates or unanticipated credit events experienced by borrowers whose mortgage loans underlie the MSRs, residential transition loans or the non-Agency securities held in our investment portfolio. Asset management fees are directly related to growth in AUM and investment performance of our funds. Decline in investment performance may slow our AUM growth and increase the potential for redemptions from our funds. Property rental revenue is directly related to occupancy.
During the three months ended March 31, 2026, interest rates decreased in comparison to the three months ended March 31, 2025. Changes in interest rates can inversely impact a borrower’s ability or willingness to enter into mortgage transactions, including residential, business purpose and commercial loans. On the other hand, lower interest rates also decrease our financing costs.
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Summary of Results of Operations
The following table summarizes the changes in our results of operations for the three months ended March 31, 2026 compared to the three months ended December 31, 2025 and the three months ended March 31, 2026 compared to the three months ended March 31, 2025. Our results of operations are not necessarily indicative of our future performance (dollars in thousands).
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
| March 31, 2026 | December 31, 2025 | March 31, 2025 | QoQ Change | YoY Change | |||||||||||||||||||||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||||||||||||||||||||
| Servicing fee revenue, net and interest income from MSRs and MSR financing receivables | $ | 579,288 | $ | 570,070 | $ | 570,801 | $ | 9,218 | $ | 8,487 | |||||||||||||||||||||||||||||||||||||
Change in fair value of MSRs and MSR financing receivables, net of economic hedges (includes realization of cash flows of $(211,456), $(232,554) and $(146,891), respectively) | (204,229) | (421,815) | (333,378) | 217,586 | 129,149 | ||||||||||||||||||||||||||||||||||||||||||
| Servicing revenue, net | 375,059 | 148,255 | 237,423 | 226,804 | 137,636 | ||||||||||||||||||||||||||||||||||||||||||
| Interest income | 461,877 | 500,814 | 441,260 | (38,937) | 20,617 | ||||||||||||||||||||||||||||||||||||||||||
| Gain on originated residential mortgage loans, HFS, net | 208,250 | 203,731 | 159,789 | 4,519 | 48,461 | ||||||||||||||||||||||||||||||||||||||||||
| Asset management revenue | 106,587 | 359,489 | 87,672 | (252,902) | 18,915 | ||||||||||||||||||||||||||||||||||||||||||
| Rental revenue | 191,691 | 46,202 | 19,402 | 145,489 | 172,289 | ||||||||||||||||||||||||||||||||||||||||||
| Other revenue | 36,772 | 32,258 | 31,371 | 4,514 | 5,401 | ||||||||||||||||||||||||||||||||||||||||||
| 1,380,236 | 1,290,749 | 976,917 | 89,487 | 403,319 | |||||||||||||||||||||||||||||||||||||||||||
| Expenses | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense and warehouse line fees | 430,662 | 422,821 | 419,054 | 7,841 | 11,608 | ||||||||||||||||||||||||||||||||||||||||||
| General, administrative and operating | 336,002 | 261,366 | 212,978 | 74,636 | 123,024 | ||||||||||||||||||||||||||||||||||||||||||
| Compensation and benefits | 378,410 | 453,932 | 271,467 | (75,522) | 106,943 | ||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 92,644 | 35,985 | 24,568 | 56,659 | 68,076 | ||||||||||||||||||||||||||||||||||||||||||
| 1,237,718 | 1,174,104 | 928,067 | 63,614 | 309,651 | |||||||||||||||||||||||||||||||||||||||||||
| Other Income (Loss) | |||||||||||||||||||||||||||||||||||||||||||||||
| Realized and unrealized gains (losses), net | (15,154) | 50,876 | (1,143) | (66,030) | (14,011) | ||||||||||||||||||||||||||||||||||||||||||
| Other income, net | 26,876 | 38,804 | 9,073 | (11,928) | 17,803 | ||||||||||||||||||||||||||||||||||||||||||
| 11,722 | 89,680 | 7,930 | (77,958) | 3,792 | |||||||||||||||||||||||||||||||||||||||||||
| Income before Income Taxes | 154,240 | 206,325 | 56,780 | (52,085) | 97,460 | ||||||||||||||||||||||||||||||||||||||||||
| Income tax expense (benefit) | 44,762 | 115,747 | (23,930) | (70,985) | 68,692 | ||||||||||||||||||||||||||||||||||||||||||
| Net Income | 109,478 | 90,578 | 80,710 | 18,900 | 28,768 | ||||||||||||||||||||||||||||||||||||||||||
| Non-controlling interests in income of consolidated subsidiaries | (146) | 1,234 | 1,086 | (1,380) | (1,232) | ||||||||||||||||||||||||||||||||||||||||||
| Redeemable non-controlling interests in income of consolidated subsidiaries | 6,946 | 4,353 | 813 | 2,593 | 6,133 | ||||||||||||||||||||||||||||||||||||||||||
| Net Income Attributable to Rithm Capital Corp. | 102,678 | 84,991 | 78,811 | 17,687 | 23,867 | ||||||||||||||||||||||||||||||||||||||||||
| Change in redemption value of redeemable non-controlling interests | — | — | 15,611 | — | (15,611) | ||||||||||||||||||||||||||||||||||||||||||
| Dividends on preferred stock | 34,847 | 31,875 | 26,677 | 2,972 | 8,170 | ||||||||||||||||||||||||||||||||||||||||||
| Net Income Attributable to Common Stockholders | $ | 67,831 | $ | 53,116 | $ | 36,523 | $ | 14,715 | $ | 31,308 | |||||||||||||||||||||||||||||||||||||
106
Servicing Revenue, Net
Servicing revenue, net consists of the following:
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | March 31, 2026 | December 31, 2025 | March 31, 2025 | QoQ Change | YoY Change | ||||||||||||||||||||||||||||||||||||||||||
| Servicing fee revenue, net and interest income from MSRs and MSR financing receivables | $ | 530,599 | $ | 522,754 | $ | 526,810 | $ | 7,845 | $ | 3,789 | |||||||||||||||||||||||||||||||||||||
| Ancillary and other fees | 48,689 | 47,316 | 43,991 | 1,373 | 4,698 | ||||||||||||||||||||||||||||||||||||||||||
| Servicing fee revenue, net and fees | 579,288 | 570,070 | 570,801 | 9,218 | 8,487 | ||||||||||||||||||||||||||||||||||||||||||
| Change in Fair Value due to: | |||||||||||||||||||||||||||||||||||||||||||||||
| Realization of cash flows | (211,456) | (232,554) | (146,891) | 21,098 | (64,565) | ||||||||||||||||||||||||||||||||||||||||||
Change in valuation inputs and assumptions, net of realized gains (losses)(A) | 361,586 | (249,992) | (395,025) | 611,578 | 756,611 | ||||||||||||||||||||||||||||||||||||||||||
| Gains (losses) on MSR economic hedges | (354,359) | 60,731 | 208,538 | (415,090) | (562,897) | ||||||||||||||||||||||||||||||||||||||||||
| Servicing Revenue, Net | $ | 375,059 | $ | 148,255 | $ | 237,423 | $ | 226,804 | $ | 137,636 | |||||||||||||||||||||||||||||||||||||
(A)The following table summarizes the components of servicing revenue, net related to changes in valuation inputs and assumptions:
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | March 31, 2026 | December 31, 2025 | March 31, 2025 | QoQ Change | YoY Change | ||||||||||||||||||||||||||||||||||||||||||
| Changes in interest rates and prepayment speeds | $ | 258,761 | $ | (23,831) | $ | (341,713) | $ | 282,592 | $ | 600,474 | |||||||||||||||||||||||||||||||||||||
| Changes in discount rates | 140,976 | 4,214 | (4,323) | 136,762 | 145,299 | ||||||||||||||||||||||||||||||||||||||||||
| Changes in other factors | (38,151) | (230,375) | (48,989) | 192,224 | 10,838 | ||||||||||||||||||||||||||||||||||||||||||
| Change in Valuation and Assumptions | $ | 361,586 | $ | (249,992) | $ | (395,025) | $ | 611,578 | $ | 756,611 | |||||||||||||||||||||||||||||||||||||
The table below includes a further breakdown of servicing fee revenue, net and fees for the periods presented:
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | March 31, 2026 | December 31, 2025 | March 31, 2025 | QoQ Change | YoY Change | ||||||||||||||||||||||||||||||||||||||||||
| MSR-owned assets | $ | 457,617 | $ | 447,207 | $ | 449,710 | $ | 10,410 | $ | 7,907 | |||||||||||||||||||||||||||||||||||||
| Residential whole loans | 2,877 | 2,891 | 2,435 | (14) | 442 | ||||||||||||||||||||||||||||||||||||||||||
| Third-party servicing revenue | 56,812 | 54,268 | 53,954 | 2,544 | 2,858 | ||||||||||||||||||||||||||||||||||||||||||
| Incentive | 10,931 | 13,750 | 18,284 | (2,819) | (7,353) | ||||||||||||||||||||||||||||||||||||||||||
| Boarding | 2,362 | 4,638 | 2,427 | (2,276) | (65) | ||||||||||||||||||||||||||||||||||||||||||
| Ancillary and other fees | 48,689 | 47,316 | 43,991 | 1,373 | 4,698 | ||||||||||||||||||||||||||||||||||||||||||
Servicing Fee Revenue, Net and Fees(A) | $ | 579,288 | $ | 570,070 | $ | 570,801 | $ | 9,218 | $ | 8,487 | |||||||||||||||||||||||||||||||||||||
(A)In addition to third-party servicing revenue, includes other fees earned from third parties of $30.2 million, $29.7 million and $22.0 million for the three months ended March 31, 2026, December 31, 2025 and March 31, 2025, respectively.
The table below summarizes the UPB of our MSRs, MSR financing receivables and third-party servicing:
| UPB | |||||||||||||||||||||||||||||||||||
| (dollars in millions) | March 31, 2026 | December 31, 2025 | March 31, 2025 | QoQ Change | YoY Change | ||||||||||||||||||||||||||||||
| GSE | $ | 404,243 | $ | 412,978 | $ | 447,489 | $ | (8,735) | $ | (43,246) | |||||||||||||||||||||||||
| Non-Agency | 290,703 | 284,234 | 254,347 | 6,469 | 36,356 | ||||||||||||||||||||||||||||||
| Ginnie Mae | 155,425 | 154,535 | 143,020 | 890 | 12,405 | ||||||||||||||||||||||||||||||
| Total | $ | 850,371 | $ | 851,747 | $ | 844,856 | $ | (1,376) | $ | 5,515 | |||||||||||||||||||||||||
The table below summarizes the total UPB of our servicing portfolio (owned MSRs and third-party servicing) by Performing Servicing, Special Servicing and serviced by third-parties:
| UPB | |||||||||||||||||||||||||||||||||||
| (dollars in millions) | March 31, 2026 | December 31, 2025 | March 31, 2025 | QoQ Change | YoY Change | ||||||||||||||||||||||||||||||
| Performing Servicing | $ | 529,724 | $ | 529,123 | $ | 522,191 | $ | 601 | $ | 7,533 | |||||||||||||||||||||||||
| Special Servicing | 269,554 | 268,508 | 264,367 | 1,046 | 5,187 | ||||||||||||||||||||||||||||||
| Serviced by third-parties | 51,093 | 54,116 | 58,298 | (3,023) | (7,205) | ||||||||||||||||||||||||||||||
| Total Servicing Portfolio | $ | 850,371 | $ | 851,747 | $ | 844,856 | $ | (1,376) | $ | 5,515 | |||||||||||||||||||||||||
107
Three months ended March 31, 2026 compared to the three months ended December 31, 2025
Servicing revenue, net was $375.1 million for the three months ended March 31, 2026, an increase of $226.8 million, compared to $148.3 million for the three months ended December 31, 2025. The increase was primarily attributable to slower prepayment speeds, resulting in $21.1 million less realization of cash flows, and a $196.5 million increase in hedged MSR mark-to-market driven by lower discount rates and delinquency rates. Servicing fee revenue, net and fees increased $9.2 million, primarily driven by lower interest shortfall and higher subservicing revenue quarter-over-quarter.
Weighted average mortgage servicing revenue remained comparable quarter-over-quarter at approximately 35 bps.
Three months ended March 31, 2026 compared to the three months ended March 31, 2025
Servicing revenue, net was $375.1 million for the three months ended March 31, 2026, an increase of $137.6 million, compared to $237.4 million for the three months ended March 31, 2025. The increase was primarily attributable to a $193.7 million increase in hedged MSR mark-to-market driven by lower discount rates, partially offset by $64.6 million higher realization of cash flows driven by higher prepayment speeds year-over-year. Servicing fee revenue, net and fees increased $8.5 million driven by portfolio growth, partially offset by higher servicer advances provision year-over-year.
Weighted average mortgage servicing revenue remained comparable year-over-year at approximately 35 bps.
Interest Income
The following table includes the breakdown of interest income by segment for the periods presented:
| (dollars in thousands) | Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
| Segment | March 31, 2026 | December 31, 2025 | March 31, 2025 | QoQ Change | YoY Change | |||||||||||||||||||||||||||||||||||||||||||||
| Origination & Servicing | $ | 234,877 | $ | 305,075 | $ | 292,561 | $ | (70,198) | $ | (57,684) | ||||||||||||||||||||||||||||||||||||||||
| Residential Transitional Lending | 87,659 | 82,075 | 66,508 | 5,584 | 21,151 | |||||||||||||||||||||||||||||||||||||||||||||
| Asset Management | 38,897 | 16,470 | 9,413 | 22,427 | 29,484 | |||||||||||||||||||||||||||||||||||||||||||||
| Investment Portfolio | 95,967 | 93,696 | 71,790 | 2,271 | 24,177 | |||||||||||||||||||||||||||||||||||||||||||||
| Commercial Real Estate | 1,832 | 337 | — | 1,495 | 1,832 | |||||||||||||||||||||||||||||||||||||||||||||
| Corporate Category | 2,645 | 3,161 | 988 | (516) | 1,657 | |||||||||||||||||||||||||||||||||||||||||||||
| Total Interest Income | $ | 461,877 | $ | 500,814 | $ | 441,260 | $ | (38,937) | $ | 20,617 | ||||||||||||||||||||||||||||||||||||||||
Three months ended March 31, 2026 compared to the three months ended December 31, 2025
Interest income was $461.9 million for the three months ended March 31, 2026, a decrease of $38.9 million, compared to $500.8 million for the three months ended December 31, 2025. The decrease was primarily attributable to (i) lower interest income from custodial balances at the mortgage company, driven by seasonally lower custodial balances and a lower average earnings rate resulting from the decline in interest rates toward the end of 2025, and (ii) lower interest income from on-balance sheet Non-QM loans due to securitizations during the three months ended March 31, 2026. The decrease was partially offset by a full quarter of interest income earned from insurance company investments acquired in December 2025, as well as growth in the RTL portfolio.
Three months ended March 31, 2026 compared to the three months ended March 31, 2025
Interest income was $461.9 million for the three months ended March 31, 2026, an increase of $20.6 million, compared to $441.3 million for the three months ended March 31, 2025. The increase was primarily attributable to growth in Non-QM and RTL portfolios, as well as a full quarter of interest income earned from insurance company investments acquired in December 2025, partially offset by net securities sales.
108
Gain on Originated Residential Mortgage Loans, HFS, Net
The following table provides information regarding gain on originated residential mortgage loans, HFS, net as a percentage of pull through adjusted lock volume, by channel:
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | March 31, 2026 | December 31, 2025 | March 31, 2025 | QoQ Change | YoY Change | ||||||||||||||||||||||||||||||||||||||||||
| Pull through adjusted lock volume | $ | 16,959,017 | $ | 17,275,692 | $ | 12,451,587 | $ | (316,675) | $ | 4,507,430 | |||||||||||||||||||||||||||||||||||||
| Gain on Originated Residential Mortgage Loans, as a Percentage of Pull Through Adjusted Lock Volume, by Channel: | |||||||||||||||||||||||||||||||||||||||||||||||
| Direct to Consumer | 2.52 | % | 1.77 | % | 3.20 | % | |||||||||||||||||||||||||||||||||||||||||
| Retail / Joint Venture | 2.88 | % | 3.40 | % | 3.48 | % | |||||||||||||||||||||||||||||||||||||||||
| Wholesale | 1.20 | % | 1.53 | % | 1.33 | % | |||||||||||||||||||||||||||||||||||||||||
| Correspondent | 0.44 | % | 0.58 | % | 0.55 | % | |||||||||||||||||||||||||||||||||||||||||
| Total Gain on Originated Residential Mortgage Loans, as a Percentage of Pull Through Adjusted Lock Volume | 1.09 | % | 1.12 | % | 1.23 | % | |||||||||||||||||||||||||||||||||||||||||
The following table summarizes funded loan production by channel:
| UPB | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in millions) | March 31, 2026 | December 31, 2025 | March 31, 2025 | QoQ Change | YoY Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Production by Channel: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Direct to Consumer | $ | 2,473 | $ | 2,846 | $ | 1,170 | $ | (373) | $ | 1,303 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Retail / Joint Venture | 712 | 824 | 580 | (112) | 132 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wholesale | 2,562 | 3,672 | 1,537 | (1,110) | 1,025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Correspondent | 9,726 | 11,473 | 8,542 | (1,747) | 1,184 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Production by Channel | $ | 15,473 | $ | 18,815 | $ | 11,829 | $ | (3,342) | $ | 3,644 | |||||||||||||||||||||||||||||||||||||||||||||||||
| % Purchase | 51 | % | 58 | % | 73 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| % Refinance | 49 | % | 42 | % | 27 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Three months ended March 31, 2026 compared to the three months ended December 31, 2025
Gain on originated residential mortgage loans, HFS, net was $208.3 million for the three months ended March 31, 2026, an increase of $4.5 million, compared to $203.7 million for the three months ended December 31, 2025. The increase was primarily attributable to gains from mortgage loan origination derivatives partially offset by narrower gain on sale margins and reduction in pull through adjusted lock volume.
For the three months ended March 31, 2026, funded loan origination volume was $15.5 billion, down from $18.8 billion in the three months ended December 31, 2025. Refinance activity represented 49% of total funded origination volume, up from 42% in three months ended December 31, 2025, driven by slight decline in interest rates. Gain on sale margin for the three months ended March 31, 2026 was 1.09%, 3 bps lower than 1.12% for the three months ended December 31, 2025, primarily due to narrower margins in the Wholesale and Correspondent channels.
Three months ended March 31, 2026 compared to the three months ended March 31, 2025
Gain on originated residential mortgage loans, HFS, net was $208.3 million for the three months ended March 31, 2026, an increase of $48.5 million, compared to $159.8 million for the three months ended March 31, 2025. The increase was primarily attributable to an increase in pull through adjusted lock volume in the Direct to Consumer, Wholesale and Correspondent channels, partially offset by narrower gain on sale margins.
For the three months ended March 31, 2026, funded loan origination volume was $15.5 billion, up from $11.8 billion in the three months ended March 31, 2025. Refinance activity represented 49% of total funded origination volume, up from 27% in the three months ended March 31, 2025, driven by decline in interest rates. Gain on sale margin for the three months ended March 31, 2026 was 1.09%, 14 bps lower than 1.23% for the three months ended March 31, 2025, primarily due to narrower gain on sale margins across channels.
109
Asset Management Revenue
Three months ended March 31, 2026 compared to the three months ended December 31, 2025
Asset management revenue was $106.6 million for the three months ended March 31, 2026, a decrease of $252.9 million, compared to $359.5 million for the three months ended December 31, 2025. The decrease was primarily attributable to incentive income crystallizations and recognition in the fourth quarter. Management fees increased quarter-over-quarter attributable to a full quarter of earnings from Crestline acquired in December 2025.
Three months ended March 31, 2026 compared to the three months ended March 31, 2025
Asset management revenue was $106.6 million for the three months ended March 31, 2026, an increase of $18.9 million, compared to $87.7 million for the three months ended March 31, 2025. The increase was primarily attributable to a full quarter of earnings from Crestline, which was acquired in December 2025, as well as an increase in fee earning AUM, partially offset by less first quarter crystallizations recognized through incentive income year-over-year.
Rental Revenue
Three months ended March 31, 2026 compared to the three months ended December 31, 2025
Rental revenue was $191.7 million for the three months ended March 31, 2026, an increase of $145.5 million, compared to $46.2 million for the three months ended December 31, 2025. The increase was driven by a full quarter of earnings from Elecor, which was acquired in December 2025. Elecor generated $171.2 million of the total rental revenue earned in the first quarter of 2026, with the remainder earned from our SFR business.
Three months ended March 31, 2026 compared to the three months ended March 31, 2025
Rental revenue was $191.7 million for the three months ended March 31, 2026, an increase of $172.3 million, compared to $19.4 million for the three months ended March 31, 2025. The increase was driven by a full quarter of earnings from Elecor, which was acquired in December 2025. Elecor generated $171.2 million of the total rental revenue earned in the first quarter of 2026, with the remainder earned from our SFR business.
Other Revenue
Three months ended March 31, 2026 compared to the three months ended December 31, 2025
Other revenue was $36.8 million for the three months ended March 31, 2026, an increase of $4.5 million, compared to $32.3 million for the three months ended December 31, 2025. The increase was driven by a full quarter of earnings from Elecor, which was acquired in December 2025.
Three months ended March 31, 2026 compared to the three months ended March 31, 2025
Other revenue was $36.8 million for the three months ended March 31, 2026, an increase of $5.4 million, compared to $31.4 million for the three months ended March 31, 2025. The increase was driven by a full quarter of earnings from Elecor, which was acquired in December 2025.
110
Interest Expense and Warehouse Line Fees
The following table includes the breakdown of interest expense and warehouse line fees by segment for the periods presented:
| (dollars in thousands) | Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
| Segment | March 31, 2026 | December 31, 2025 | March 31, 2025 | QoQ Change | YoY Change | |||||||||||||||||||||||||||||||||||||||||||||
| Origination & Servicing | $ | 215,797 | $ | 254,331 | $ | 292,948 | $ | (38,534) | $ | (77,151) | ||||||||||||||||||||||||||||||||||||||||
| Residential Transitional Lending | 35,659 | 34,960 | 31,701 | 699 | 3,958 | |||||||||||||||||||||||||||||||||||||||||||||
| Asset Management | 6,173 | 6,720 | 14,089 | (547) | (7,916) | |||||||||||||||||||||||||||||||||||||||||||||
| Investment Portfolio | 76,555 | 87,927 | 59,636 | (11,372) | 16,919 | |||||||||||||||||||||||||||||||||||||||||||||
| Commercial Real Estate | 58,462 | 8,188 | — | 50,274 | 58,462 | |||||||||||||||||||||||||||||||||||||||||||||
| Corporate Category | 38,016 | 30,695 | 20,680 | 7,321 | 17,336 | |||||||||||||||||||||||||||||||||||||||||||||
| Total Interest Expense and Warehouse Line Fees | $ | 430,662 | $ | 422,821 | $ | 419,054 | $ | 7,841 | $ | 11,608 | ||||||||||||||||||||||||||||||||||||||||
Three months ended March 31, 2026 compared to the three months ended December 31, 2025
Interest expense and warehouse line fees were $430.7 million for the three months ended March 31, 2026, an increase of $7.8 million, compared to $422.8 million for the three months ended December 31, 2025. The increase was primarily attributable (i) a full quarter of interest expense incurred by Elecor acquired in December 2025, (ii) an increase in average borrowing on MSRs and (iii) an increase in borrowing to support growth of the RTL portfolio. The increase was partially offset by Non-QM securitizations, reduction in mortgage loan production volume, lower Agency securities held and lower average cost of borrowing during the three months ended March 31, 2026.
Three months ended March 31, 2026 compared to the three months ended March 31, 2025
Interest expense and warehouse line fees were $430.7 million for the three months ended March 31, 2026, an increase of $11.6 million, compared to $419.1 million for the three months ended March 31, 2025. The increase was primarily attributable to (i) a full quarter of interest expense incurred by Elecor acquired in December 2025, (ii) an increase in average borrowing on MSRs and (iii) an increase in borrowing to support growth of the RTL portfolio. The increase was partially offset by lower Agency securities held and lower average cost of borrowing during the three months ended March 31, 2026.
111
General, Administrative and Operating
General, administrative and operating expense consists of the following:
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | March 31, 2026 | December 31, 2025 | March 31, 2025 | QoQ Change | YoY Change | ||||||||||||||||||||||||||||||||||||||||||
| Legal and professional | $ | 37,898 | $ | 59,144 | $ | 24,638 | $ | (21,246) | $ | 13,260 | |||||||||||||||||||||||||||||||||||||
| Loan origination | 19,886 | 17,180 | 14,677 | 2,706 | 5,209 | ||||||||||||||||||||||||||||||||||||||||||
| Occupancy | 17,167 | 16,449 | 14,490 | 718 | 2,677 | ||||||||||||||||||||||||||||||||||||||||||
| Subservicing | 11,852 | 11,623 | 16,756 | 229 | (4,904) | ||||||||||||||||||||||||||||||||||||||||||
| Loan servicing | 37,769 | 27,499 | 41,400 | 10,270 | (3,631) | ||||||||||||||||||||||||||||||||||||||||||
| Property and maintenance | 106,355 | 38,597 | 27,583 | 67,758 | 78,772 | ||||||||||||||||||||||||||||||||||||||||||
| Information technology | 34,619 | 32,774 | 29,691 | 1,845 | 4,928 | ||||||||||||||||||||||||||||||||||||||||||
| Insurance-related expenses | 19,855 | 5,392 | — | 14,463 | 19,855 | ||||||||||||||||||||||||||||||||||||||||||
Other | 50,601 | 52,708 | 43,743 | (2,107) | 6,858 | ||||||||||||||||||||||||||||||||||||||||||
| General, Administrative and Operating Expense | $ | 336,002 | $ | 261,366 | $ | 212,978 | $ | 74,636 | $ | 123,024 | |||||||||||||||||||||||||||||||||||||
The following table includes the breakdown of general, administrative and operating expense by segment for the periods presented:
| (dollars in thousands) | Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
| Segment | March 31, 2026 | December 31, 2025 | March 31, 2025 | QoQ Change | YoY Change | |||||||||||||||||||||||||||||||||||||||||||||
| Origination & Servicing | $ | 151,269 | $ | 159,952 | $ | 143,767 | $ | (8,683) | $ | 7,502 | ||||||||||||||||||||||||||||||||||||||||
| Residential Transitional Lending | 6,537 | 9,073 | 4,831 | (2,536) | 1,706 | |||||||||||||||||||||||||||||||||||||||||||||
| Asset Management | 49,811 | 48,215 | 31,591 | 1,596 | 18,220 | |||||||||||||||||||||||||||||||||||||||||||||
| Investment Portfolio | 25,109 | 26,661 | 22,992 | (1,552) | 2,117 | |||||||||||||||||||||||||||||||||||||||||||||
| Commercial Real Estate | 84,000 | 13,124 | — | 70,876 | 84,000 | |||||||||||||||||||||||||||||||||||||||||||||
| Corporate Category | 19,276 | 4,341 | 9,797 | 14,935 | 9,479 | |||||||||||||||||||||||||||||||||||||||||||||
| Total General, Administrative and Operating Expense | $ | 336,002 | $ | 261,366 | $ | 212,978 | $ | 74,636 | $ | 123,024 | ||||||||||||||||||||||||||||||||||||||||
Three months ended March 31, 2026 compared to the three months ended December 31, 2025
General, administrative and operating expenses were $336.0 million for the three months ended March 31, 2026, an increase of $74.6 million, compared to $261.4 million for the three months ended December 31, 2025. The increase was primarily attributable a full quarter of expenses incurred by Elecor and Crestline, driving majority of the $67.8 million increase in Elecor property and maintenance expense. The increase was partially offset by lower legal expenses following the close of these acquisitions. Additionally, there were higher loan servicing expenses from an increase in Non-QM securitizations during the three months ended March 31, 2026.
Three months ended March 31, 2026 compared to the three months ended March 31, 2025
General, administrative and operating expenses were $336.0 million for the three months ended March 31, 2026, an increase of $123.0 million, compared to $213.0 million for the three months ended March 31, 2025. The increase was primarily attributable to expenses incurred by Elecor and Crestline, which were both acquired in December 2025, driving majority of the $78.8 million increase in property and maintenance expense.
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Compensation and Benefits
The following table includes the breakdown of compensation and benefits expense by segment for the periods presented:
| (dollars in thousands) | Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
| Segment | March 31, 2026 | December 31, 2025 | March 31, 2025 | QoQ Change | YoY Change | |||||||||||||||||||||||||||||||||||||||||||||
| Origination & Servicing | $ | 207,074 | $ | 213,425 | $ | 172,702 | $ | (6,351) | $ | 34,372 | ||||||||||||||||||||||||||||||||||||||||
| Residential Transitional Lending | 20,822 | 17,583 | 14,391 | 3,239 | 6,431 | |||||||||||||||||||||||||||||||||||||||||||||
| Asset Management | 113,016 | 187,273 | 65,330 | (74,257) | 47,686 | |||||||||||||||||||||||||||||||||||||||||||||
| Investment Portfolio | 5,115 | 795 | 1,162 | 4,320 | 3,953 | |||||||||||||||||||||||||||||||||||||||||||||
| Commercial Real Estate | 11,282 | 14,285 | — | (3,003) | 11,282 | |||||||||||||||||||||||||||||||||||||||||||||
| Corporate Category | 21,101 | 20,571 | 17,882 | 530 | 3,219 | |||||||||||||||||||||||||||||||||||||||||||||
| Total Compensation and Benefits Expense | $ | 378,410 | $ | 453,932 | $ | 271,467 | $ | (75,522) | $ | 106,943 | ||||||||||||||||||||||||||||||||||||||||
Three months ended March 31, 2026 compared to the three months ended December 31, 2025
Compensation and benefits expenses were $378.4 million for the three months ended March 31, 2026, a decrease of $75.5 million, compared to $453.9 million for the three months ended December 31, 2025. The decrease was primarily due to the timing of bonus accruals in the fourth quarter of 2025 linked to fund performance.
Three months ended March 31, 2026 compared to the three months ended March 31, 2025
Compensation and benefits expenses were $378.4 million for the three months ended March 31, 2026, an increase of $106.9 million, compared to $271.5 million for the three months ended March 31, 2025. The increase was primarily driven by higher overall compensation costs, driven by increased headcount following the acquisitions of Elecor and Crestline in December 2025.
Depreciation and Amortization
The following table includes the breakdown of depreciation and amortization expense by segment for the periods presented:
| (dollars in thousands) | Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
| Segment | March 31, 2026 | December 31, 2025 | March 31, 2025 | QoQ Change | YoY Change | |||||||||||||||||||||||||||||||||||||||||||||
| Origination & Servicing | $ | 6,088 | $ | 6,171 | $ | 7,659 | $ | (83) | $ | (1,571) | ||||||||||||||||||||||||||||||||||||||||
| Residential Transitional Lending | 1,943 | 1,939 | 1,567 | 4 | 376 | |||||||||||||||||||||||||||||||||||||||||||||
| Asset Management | 11,526 | 8,594 | 7,384 | 2,932 | 4,142 | |||||||||||||||||||||||||||||||||||||||||||||
| Investment Portfolio | 8,482 | 8,927 | 7,954 | (445) | 528 | |||||||||||||||||||||||||||||||||||||||||||||
| Commercial Real Estate | 64,605 | 10,354 | — | 54,251 | 64,605 | |||||||||||||||||||||||||||||||||||||||||||||
| Corporate Category | — | — | 4 | — | (4) | |||||||||||||||||||||||||||||||||||||||||||||
| Total Depreciation and Amortization Expense | $ | 92,644 | $ | 35,985 | $ | 24,568 | $ | 56,659 | $ | 68,076 | ||||||||||||||||||||||||||||||||||||||||
Three months ended March 31, 2026 compared to the three months ended December 31, 2025
Depreciation and amortization expense was $92.6 million for the three months ended March 31, 2026, an increase of $56.7 million, compared to $36.0 million for the three months ended December 31, 2025. The increase was driven by a full quarter of expense incurred by Elecor and Crestline, which were both acquired in December 2025, adding CRE and lease and other intangibles to the consolidated portfolio.
Three months ended March 31, 2026 compared to the three months ended March 31, 2025
Depreciation and amortization expense was $92.6 million for the three months ended March 31, 2026, an increase of $68.1 million, compared to $24.6 million for the three months ended March 31, 2025. The increase was driven by a full quarter of expense incurred by Elecor and Crestline, which were both acquired in December 2025, adding CRE and lease and other intangibles to the consolidated portfolio.
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Other Income (Loss)
The following table summarizes the components of other income (loss):
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | March 31, 2026 | December 31, 2025 | March 31, 2025 | QoQ Change | YoY Change | ||||||||||||||||||||||||||||||||||||||||||
Real estate and other securities | $ | (27,204) | $ | 5,649 | $ | 8,454 | $ | (32,853) | $ | (35,658) | |||||||||||||||||||||||||||||||||||||
Residential mortgage loans and REO | (3,705) | 5,290 | 2,544 | (8,995) | (6,249) | ||||||||||||||||||||||||||||||||||||||||||
Derivative and hedging instruments | 2,876 | (3,008) | (9,815) | 5,884 | 12,691 | ||||||||||||||||||||||||||||||||||||||||||
| Notes and bonds payable | (12,270) | 717 | 4,848 | (12,987) | (17,118) | ||||||||||||||||||||||||||||||||||||||||||
Consolidated entities(A) | 19,064 | 15,771 | 16,442 | 3,293 | 2,622 | ||||||||||||||||||||||||||||||||||||||||||
| Insurance company investments | 1,272 | 2,606 | — | (1,334) | 1,272 | ||||||||||||||||||||||||||||||||||||||||||
Other gains (losses)(B) | 4,813 | 23,851 | (23,616) | (19,038) | 28,429 | ||||||||||||||||||||||||||||||||||||||||||
| Realized and unrealized gains (losses), net | (15,154) | 50,876 | (1,143) | (66,030) | (14,011) | ||||||||||||||||||||||||||||||||||||||||||
| Other income, net | 26,876 | 38,804 | 9,073 | (11,928) | 17,803 | ||||||||||||||||||||||||||||||||||||||||||
| Other Income, Net | $ | 11,722 | $ | 89,680 | $ | 7,930 | $ | (77,958) | $ | 3,792 | |||||||||||||||||||||||||||||||||||||
(A)Includes change in the fair value of the consolidated CFEs’ financial assets and liabilities and related interest and other income.
(B)Includes excess MSRs, servicer advance investments, consumer loans, residential transition loans and other.
Three months ended March 31, 2026 compared to the three months ended December 31, 2025
Other income, net was $11.7 million for the three months ended March 31, 2026, a decrease of $78.0 million, compared to $89.7 million for the three months ended December 31, 2025.
The decrease was primarily attributable to realized and unrealized losses on real estate and other securities, as well as losses related to REO and notes and bonds payable. Losses on real estate and other securities were driven by increases in the 10-year Treasury rate, while changes in notes and bonds payable were primarily due to the early extinguishment of debt.
The decrease in other gains reflects lower gains on preferred stock from certain equity method investments and residential transition loans, along with increased losses on consumer loans.
The decrease in other income, net was primarily attributable to a non-recurring loan recovery in the three months ended December 31, 2025, which was partially offset by increases in pickup from equity method investments.
Three months ended March 31, 2026 compared to the three months ended March 31, 2025
Other income, net was $11.7 million for the three months ended March 31, 2026, an increase of $3.8 million, compared to $7.9 million for the three months ended March 31, 2025.
The increase was primarily attributable to realized and unrealized gains related to derivative and hedging instruments and other gains, partially offset by losses on real estate and other securities and notes and bonds payable. Other gains was primarily attributable to lower losses related to the consumer loan portfolio.
Losses on real estate and other securities were driven by increases in the 10-year Treasury rate, while changes in notes and bonds payable were primarily due to the early extinguishment of debt.
The increase in other income, net was primarily attributable to higher gains on equity method investments and rental revenue associated with Elecor, which was acquired in December 2025.
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Income Tax Expense (Benefit)
Three months ended March 31, 2026 compared to the three months ended December 31, 2025
Income tax expense decreased $71.0 million, which represents the net of a $1.9 million current tax expense increase and $72.9 million deferred tax expense decrease. The change in deferred tax expense was primarily driven by changes in the fair value of MSRs and swaps held within taxable entities. Current tax expense is driven primarily by income from foreign operations.
Three months ended March 31, 2026 compared to the three months ended March 31, 2025
Income tax expense increased $68.7 million, which represents the net of a $11.3 million decrease in current tax expense and $80 million deferred tax expense increase. The change in deferred tax expense was primarily driven by changes in the fair value of MSRs and swaps held within taxable entities. The change in current tax expense is driven primarily by income from foreign operations.
Non-Controlling Interests in Income (Loss) of Consolidated Subsidiaries
Three months ended March 31, 2026 compared to the three months ended December 31, 2025
Non-controlling interests in income (loss) of consolidated subsidiaries was $(0.1) million for the three months ended March 31, 2026, a decrease of $1.4 million, compared to $1.2 million for the three months ended December 31, 2025. The decrease was driven by losses attributable to non-controlling interests in our commercial real estate and asset management segment. This was offset by gains attributable to non-controlling interests in our investment portfolio.
Three months ended March 31, 2026 compared to the three months ended March 31, 2025
Non-controlling interests in income (loss) of consolidated subsidiaries was $(0.1) million for the three months ended March 31, 2026, a decrease of $1.2 million, compared to $1.1 million for the three months ended March 31, 2025. The decrease was driven by losses attributable to non-controlling interests in our commercial real estate and asset management segment. This was offset by gains attributable to non-controlling interests in our investment portfolio.
Redeemable Non-Controlling Interests in Income of Consolidated Subsidiaries
Three months ended March 31, 2026 compared to the three months ended December 31, 2025
Redeemable non-controlling interests in income of consolidated subsidiaries was $6.9 million for the three months ended March 31, 2026, an increase of $2.6 million, compared to $4.4 million for the three months ended December 31, 2025. The increase was primarily driven by higher income attributable to redeemable non-controlling interests in a consolidated joint venture during the current period.
Three months ended March 31, 2026 compared to the three months ended March 31, 2025
Redeemable non-controlling interests in income of consolidated subsidiaries was $6.9 million for the three months ended March 31, 2026, an increase of $6.1 million, compared to $0.8 million for the three months ended March 31, 2025. The increase was primarily driven by higher income attributable to redeemable non-controlling interests in a consolidated joint venture, including interests that were newly established during the first quarter of 2025 and therefore had limited comparable activity in the prior-year period, as well as higher income attributable to redeemable non-controlling interests related to the Company-sponsored SPAC.
LIQUIDITY AND CAPITAL RESOURCES
Overview
Liquidity is a measurement of our ability to meet potential cash requirements, including ongoing commitments to repay borrowings, fund and maintain investments and other general business needs.
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We must distribute annually at least 90% of our REIT taxable income to maintain our status as a REIT under the Internal Revenue Code. A portion of this requirement may be able to be met through stock dividends, rather than cash, subject to limitations based on the value of our stock. Our ability to utilize funds generated by the MSRs held in our servicer subsidiaries, NRM and Newrez, is subject to and limited by regulatory requirements established by the Federal Housing Finance Agency (the “FHFA”), Fannie Mae and Freddie Mac private label servicing and Ginnie Mae for Ginnie Mae servicing, as summarized below. Moreover, our ability to access and utilize cash generated from our regulated entities is an important part of our dividend paying ability. As of March 31, 2026, approximately $1.4 billion of available liquidity was held at NRM and Newrez, of which $0.8 billion was in excess of the regulatory liquidity requirements. NRM and Newrez are expected to maintain compliance with applicable liquidity and net worth requirements.
The FHFA and Ginnie Mae capital and liquidity standards require all loan sellers and servicers to maintain a minimum tangible net worth of $2.5 million plus 25 bps for Fannie Mae, Freddie Mac and private label servicing UPB plus 35 bps for Ginnie Mae servicing UPB, a tangible net worth to tangible asset ratio of 6% or greater and a base liquidity of 3.5 bps of Fannie Mae, Freddie Mac and private label servicing UPB plus 10 bps for Ginnie Mae servicing UPB. Furthermore, specific to the FHFA, all non-banks have to hold additional origination liquidity of 50 bps times loans HFS plus pipeline loans. Large non-banks with greater than $50 billion UPB in servicing will have to hold an additional liquidity buffer of 2 bps on Fannie Mae and Freddie Mac servicing UPB and 5 bps on Ginnie Mae servicing UPB. As of March 31, 2026, Rithm Capital maintained compliance with the required capital and liquidity standards. Non-compliance with the capital and liquidity requirements can result in the FHFA and Ginnie Mae taking various remedial actions up to and including removing our ability to sell loans to and service loans on behalf of the FHFA and Ginnie Mae. Additionally, Ginnie Mae introduced Risk Based Capital Ratio (“RBCR”) requirements for institutions seeking approval as Ginnie Mae single-family issuers (including those that are non-depository mortgage companies). These institutions are required to maintain a RBCR of at least 6% in addition to continuing to maintain a leverage ratio of at least 6%. In connection with the implementation of this requirement, Ginnie Mae also introduced risk-based capital relief for hedging of MSRs, whereby issuers who have a track record of managing their interest rate exposure through MSRs hedging and who meet prescribed eligibility requirements may qualify for RBCR requirement relief. Compliance with these capital and liquidity requirements may require us to maintain elevated levels of capital and liquidity, which could constrain our operations and adversely affect our returns.
If the regulatory capital requirements imposed on our lenders change, they may be required to significantly increase the cost of the financing that they provide to us. Our lenders also have revised and may continue to revise their eligibility requirements for the types of assets they are willing to finance or the terms of such financings, including haircuts and requiring additional collateral in the form of cash, based on, among other factors, the regulatory environment and their management of actual and perceived risk. Moreover, the amount of financing we receive under our secured financing agreements will be directly related to our lenders’ valuation of our assets that cover the outstanding borrowings.
Use of Funds
Our primary uses of funds are the payment of interest, compensation expense, servicing and subservicing expenses, payment of outstanding commitments (including margins and loan originations), payment of other operating expenses, repayment of borrowings and hedge obligations, payment of dividends and funding of future servicer advances.
As of March 31, 2026, our total outstanding debt obligations amounted to $35.4 billion and are comprised of secured financing agreements, secured notes and bonds payable, Senior Unsecured Notes (as defined below) and notes payable of consolidated entities. Certain debt obligations are the obligations of our consolidated subsidiaries, which own the related collateral. In some cases, such collateral is not available to other creditors of ours. In particular, the obligations and liabilities of CFEs may only be satisfied with the assets of the respective CFE, and creditors do not have recourse to Rithm Capital Corp.
We have margin exposure on $13.9 billion of secured financing agreements. To the extent that the value of the collateral underlying these secured financing agreements declines below the collateral margin trigger, we may be required to post margin, which could significantly impact our liquidity.
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Short-Term Borrowings
The following tables provide additional information regarding our short-term borrowings (dollars in thousands):
| Three Months Ended March 31, 2026 | |||||||||||||||||||||||
Outstanding Balance at March 31, 2026 | Average Daily Amount Outstanding(A) | Maximum Amount Outstanding | Weighted Average Daily Interest Rate | ||||||||||||||||||||
| Secured Financing Agreements: | |||||||||||||||||||||||
| Government and government-backed securities | $ | 5,023,687 | $ | 5,080,041 | $ | 5,130,519 | 4.1 | % | |||||||||||||||
| Non-Agency securities | 960,358 | 953,581 | 982,930 | 5.4 | % | ||||||||||||||||||
| Residential mortgage loans | 4,185,242 | 4,205,495 | 5,497,951 | 5.2 | % | ||||||||||||||||||
Residential transition loans | 1,089,040 | 923,732 | 1,089,040 | 6.0 | % | ||||||||||||||||||
| Secured Notes and Bonds Payable: | |||||||||||||||||||||||
| MSRs | 2,629,627 | 2,540,807 | 2,629,627 | 6.9 | % | ||||||||||||||||||
| Servicer advances | 782,058 | 798,808 | 816,898 | 5.3 | % | ||||||||||||||||||
| Residential mortgage loans | — | — | — | — | % | ||||||||||||||||||
| Total / Weighted Average | $ | 14,670,012 | $ | 14,502,464 | $ | 16,146,965 | 5.2 | % | |||||||||||||||
(A)Represents the average for the period the debt was outstanding.
Average Daily Amount Outstanding(A) | |||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||
| March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | ||||||||||||||||||||
| Secured Financing Agreements: | |||||||||||||||||||||||
| Government and government-backed securities | $ | 5,080,041 | $ | 7,486,216 | $ | 7,635,112 | $ | 9,407,987 | |||||||||||||||
| Non-Agency securities | 953,581 | 908,897 | 889,135 | 831,541 | |||||||||||||||||||
| Residential mortgage loans and REO | 4,205,495 | 4,816,525 | 3,567,661 | 3,223,464 | |||||||||||||||||||
Residential transition loans | 923,732 | 524,960 | 537,259 | 379,593 | |||||||||||||||||||
(A)Represents the average for the period the debt was outstanding.
Unsecured Notes
On June 20, 2025, the Company issued $500.0 million aggregate principal amount of its 2030 Senior Notes due July 15, 2030, with interest payable semi-annually in arrears on each of January 15th and July 15th, commencing on January 15, 2026. Net proceeds from the issuance of the 2030 Senior Notes were approximately $495.0 million, net of commissions and estimated offering expenses payable by the Company. The 2030 Senior Notes mature on July 15, 2030 and are redeemable at any time from time to time on or after July 15, 2027, at prices ranging from 104% to 100% of the principal amount.
On March 19, 2024, the Company issued $775.0 million aggregate principal amount of its 2029 Senior Notes due April 1, 2029, with interest payable semi-annually in arrears on each of April 1st and October 1st, commencing on October 1, 2024. Net proceeds from the issuance of the 2029 Senior Notes were approximately $759.0 million, net of discount and commissions and estimated offering expenses payable by the Company. The 2029 Senior Notes mature on April 1, 2029 and are redeemable at any time and from time to time on or after April 1, 2026, at prices ranging from 104% to 100% of the principal amount.
The Company’s senior unsecured notes due October 15, 2025 (the “2025 Senior Notes” and, together with the 2030 Senior Notes and the 2029 Senior Notes, the “Senior Unsecured Notes”) were fully redeemed during the second quarter of 2025.
The Indenture, dated March 19, 2024, pursuant to which the 2029 Senior Notes were issued (the “2029 Notes Indenture”) and the Indenture, dated June 20, 2025, pursuant to which the 2030 Senior Notes were issued (the “2030 Notes Indenture”), each contain a requirement that the Company maintain Total Unencumbered Assets (as defined in each of the 2030 Notes Indenture and the 2029 Notes Indenture) of not less than 120% of the aggregate principal amount of the outstanding unsecured debt of the Company. For more information regarding our indebtedness, refer to Note 17 of the consolidated financial statements.
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Maturities
Our debt obligations as of March 31, 2026, as summarized in Note 17 to our consolidated financial statements, had contractual maturities as follows (dollars in thousands):
| Year Ending | Non-recourse(A) | Recourse(B) | Total | |||||||||||||||||
| April 1 through December 31, 2026 | $ | 2,935,130 | $ | 12,210,537 | $ | 15,145,667 | ||||||||||||||
| 2027 | 2,948,353 | 2,071,295 | 5,019,648 | |||||||||||||||||
| 2028 | 971,512 | 984,725 | 1,956,237 | |||||||||||||||||
| 2029 | 1,440,000 | 3,432,971 | 4,872,971 | |||||||||||||||||
| 2030 | 1,877,621 | 575,000 | 2,452,621 | |||||||||||||||||
| 2031 and thereafter | 5,458,062 | 250,000 | 5,708,062 | |||||||||||||||||
| $ | 15,630,678 | $ | 19,524,528 | $ | 35,155,206 | |||||||||||||||
(A)Includes secured financing agreements, secured notes and bonds payable, unsecured notes net of issuance costs, and notes payable of consolidated CFEs of $2.2 billion, $8.5 billion, $0.0 billion and $4.9 billion, respectively.
(B)Includes secured financing agreements, secured notes and bonds payable, unsecured notes net of issuance costs, and notes payable of consolidated CFEs of $11.9 billion, $6.3 billion, $1.3 billion and $0.0 billion, respectively.
Covenants
Certain of the debt obligations are subject to customary loan covenants and event of default provisions, including event of default provisions triggered by certain specified declines in our equity or failure to maintain a specified tangible net worth, liquidity or indebtedness to tangible net worth ratio. We were in compliance with all of our debt covenants as of March 31, 2026.
Source of Funds
Our primary sources of funds are cash provided by operating activities (primarily income from loan originations and servicing, as well as management fees and incentive income), sales of and repayments from our investments, potential debt financing sources, including securitizations, and the issuance of equity securities, when feasible and appropriate. Our total cash and cash equivalents at March 31, 2026 was $1.6 billion.
Currently, our primary sources of financing are secured financing agreements and secured notes and bonds payable, although we have in the past and may in the future also pursue one or more other sources of financing such as securitizations and other secured and unsecured forms of borrowing. As of March 31, 2026, we had outstanding secured financing agreements with an aggregate face amount of approximately $13.9 billion to finance our investments. The financing of our entire Agency RMBS portfolio, which generally has 30- to 90-day terms, is subject to margin calls. Under secured financing agreements, we sell a security to a counterparty and concurrently agree to repurchase the same security at a later date for a higher specified price. The sale price represents financing proceeds and the difference between the sale and repurchase prices represents interest on the financing. The price at which the security is sold generally represents the market value of the security less a discount or “haircut,” which can range broadly. During the term of the secured financing agreement, the counterparty holds the security as collateral. If the agreement is subject to margin calls, the counterparty monitors and calculates what it estimates to be the value of the collateral during the term of the agreement. If this value declines by more than a de minimis threshold, the counterparty could require us to post additional collateral, or margin, in order to maintain the initial haircut on the collateral. This margin is typically required to be posted in the form of cash and cash equivalents. Furthermore, we may, from time to time, be a party to derivative agreements or financing arrangements that may be subject to margin calls based on the value of such instruments. In addition, $6.9 billion face amount of our MSR financing is subject to mandatory monthly repayment to the extent that the outstanding balance exceeds the market value (as defined in the related agreement) of the financed asset multiplied by the contractual maximum LTV ratio. We seek to maintain adequate cash reserves and other sources of available liquidity to meet any margin calls or related requirements resulting from decreases in value related to a reasonably possible (in our opinion) change in interest rates.
Our ability to obtain borrowings and to raise future equity capital is dependent on our ability to access borrowings and the capital markets on attractive terms. We continually monitor market conditions for financing opportunities and at any given time may be entering or pursuing one or more of the transactions described above. Our senior management team has extensive long-term relationships with investment banks, brokerage firms and commercial banks, which we believe enhance our ability to source and finance asset acquisitions on attractive terms and access borrowings and the capital markets at attractive levels.
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Our ability to fund our operations, meet financial obligations and finance acquisitions may be impacted by our ability to secure and maintain our secured financing agreements, credit facilities and other financing arrangements. Because secured financing agreements and credit facilities are short-term commitments of capital, lender responses to market conditions may make it more difficult for us to renew or replace, on a continuous basis, our maturing short-term borrowings and have imposed, and may continue to impose, more onerous conditions when rolling such financings. If we are not able to renew our existing facilities or arrange for new financing on terms acceptable to us, if we default on our covenants or are otherwise unable to access funds under our financing facilities or if we are required to post more collateral or face larger haircuts, we may have to curtail our asset acquisition activities and/or dispose of assets. As of March 31, 2026, our total borrowing capacity under our secured financing arrangements was $27.3 billion with $9.7 billion of available financing under these arrangements. Although available financing is uncommitted, Rithm Capital’s unused borrowing capacity is available if Rithm Capital has additional eligible collateral to pledge and meets other borrowing conditions as set forth in the applicable agreements, including any applicable advance rate.
The use of TBA dollar roll transactions generally increases our funding diversification, expands our available pool of assets and increases our overall liquidity position, as TBA contracts typically have lower implied haircuts relative to Agency RMBS pools funded with repurchase financing. TBA dollar roll transactions may also have a lower implied cost of funds than comparable repurchase funded transactions offering incremental return potential. However, if it were to become uneconomical to roll our TBA contracts into future months it may be necessary to take physical delivery of the underlying securities and fund those assets with cash or other financing sources, which could reduce our liquidity position.
With respect to the next 12 months, we expect that our cash on hand, combined with our cash flow provided by operations and our ability to extend or refinance our secured financing agreements and servicer advance financings will be sufficient to satisfy our anticipated liquidity needs with respect to our current investment portfolio, including related financings, potential margin calls, loan origination and operating expenses. Our ability to extend or refinance short-term borrowings is critical to our liquidity outlook. We have a significant amount of near-term maturities, which we expect to be able to refinance. If we cannot repay or refinance our debt on favorable terms, we will need to seek out other sources of liquidity. While it is inherently more difficult to forecast beyond the next 12 months, we currently expect to meet our long-term liquidity requirements through our cash on hand and, if needed, additional borrowings, proceeds received from secured financing agreements and other financings, proceeds from equity offerings and the liquidation or refinancing of our assets.
These short-term and long-term expectations are forward-looking and subject to a number of uncertainties and assumptions, including those described under “—Market Considerations” as well as Part I, Item 1A. “Risk Factors” of the 2025 Form 10-K. If our assumptions about our liquidity prove to be incorrect, we could be subject to a shortfall in liquidity in the future, and such a shortfall may occur rapidly and with little or no notice, which could limit our ability to address the shortfall on a timely basis and could have a material adverse effect on our business.
Stockholders’ Equity
Preferred Stock
Pursuant to our certificate of incorporation, we are authorized to designate and issue up to 100.0 million shares of preferred stock, par value of $0.01 per share, in one or more classes or series.
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The following table summarizes our preferred shares outstanding (dollars in thousands, except share and per share amounts):
| Number of Shares | Liquidation Preference(A) | Carrying Value(C) | Dividends Declared per Share | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| March 31, 2026 | December 31, 2025 | March 31, 2026 | December 31, 2025 | March 31, 2026 | December 31, 2025 | Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series(B) | Issuance Discount | 2026 | 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series A, issued July 2019(D)(G)(I) | 4,200,068 | 4,200,068 | $ | 105,002 | $ | 105,002 | 3.15 | % | $ | 99,822 | $ | 99,822 | $ | 0.60 | $ | 0.64 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series B, issued August 2019(D)(G) | 11,260,712 | 11,260,712 | 281,518 | 281,518 | 3.15 | % | 272,654 | 272,654 | 0.59 | 0.63 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series C, issued February 2020(D)(H) | 15,903,342 | 15,903,342 | 397,584 | 397,584 | 3.15 | % | 385,289 | 385,289 | 0.55 | 0.59 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series D, 7.00% issued September 2021(E) | 18,600,000 | 18,600,000 | 465,000 | 465,000 | 3.15 | % | 449,489 | 449,489 | 0.44 | 0.44 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series E, 8.75% issued September 2025(F) | 7,600,000 | 7,600,000 | 190,000 | 190,000 | 3.15 | % | 183,536 | 183,536 | 0.55 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series F, 8.75% issued January 2026(E) | 10,000,000 | — | $ | 250,000 | $ | — | 3.15 | % | $ | 242,125 | $ | — | $ | 0.69 | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | 67,564,122 | 57,564,122 | $ | 1,689,104 | $ | 1,439,104 | $ | 1,632,915 | $ | 1,390,790 | $ | 3.42 | $ | 2.30 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(A)Each series has a liquidation preference or par value of $25.00 per share.
(B)Under certain circumstances upon a change of control, our Series A, Series B, Series C, Series D, Series E and Series F (each as defined below) are convertible to shares of our common stock.
(C)Carrying value reflects par value less discount and issuance costs.
(D)Fixed-to-floating rate cumulative redeemable preferred.
(E)Fixed-rate reset cumulative redeemable preferred.
(F)Fixed-rate cumulative redeemable preferred.
(G)Effective August 15, 2024, dividends on each of the Company’s 7.50% Series A Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (the “Series A”) and the Company’s 7.125% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (the “Series B”) accrue at a floating rate. For the first quarter 2026 dividends, the Series A accrued dividends at a percentage of the $25.00 liquidation preference per share of the Series A equal to a three-month Chicago Mercantile Exchange (“CME”) SOFR, plus a spread adjustment of 0.261%, plus a spread of 5.802%, respectively, and dividends on the Series B accumulated at a percentage of the $25.00 liquidation preference per share of the Series B preferred shares equal to a three-month CME SOFR, plus a spread adjustment of 0.261%, plus a spread of 5.640%, respectively.
(H)Effective February 15, 2025, dividends on the 6.375% Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (the “Series C”) accumulate at a floating rate. For the first quarter 2026 dividends, the Series C accrued dividends at a percentage of the $25.00 liquidation preference per share of the Series C equal to a three-month CME SOFR, plus a spread adjustment of 0.261%, plus a spread of 4.969%.
(I)The Company redeemed 2.0 million shares on March 28, 2025.
From and including the date of original issue (July 2, 2019 for the Series A, August 15, 2019 for the Series B and February 14, 2020 for the Series C) but excluding August 15, 2024 (with respect to Series A and Series B) and February 15, 2025 (with respect to Series C), holders of shares of our Series A, Series B and Series C were entitled to receive cumulative cash dividends at a rate of 7.50%, 7.125% and 6.375%, respectively, per annum of the $25.00 liquidation preference per share (equivalent to $1.875, $1.781 and $1.594, respectively, per annum per share). From and including August 15, 2024 (with respect to the Series A and Series B) and February 15, 2025 (with respect to the Series C), holders of our Series A, Series B and Series C are entitled to receive cumulative cash dividends at a floating rate per annum which is determined pursuant to the USD-London Interbank Offered Rate cessation fallback language in the Certificate of Designations for each of our Series A, Series B and Series C. From and including the date of original issue (September 17, 2021) but excluding November 15, 2026, holders of shares of our 7.00% Fixed-Rate Reset Series D Cumulative Redeemable Preferred Stock (“Series D”) are entitled to receive cumulative cash dividends at a rate of 7.00% per annum of the $25.00 liquidation preference per share (equivalent to $1.750 per annum per share). Holders of shares of our Series D, from and including November 15, 2026, are entitled to receive cumulative cash dividends based on the five-year Treasury rate plus a spread of 6.223%. From and including the date of original issue (September 25, 2025), holders of shares of our 8.750% Series E Fixed-Rate Cumulative Redeemable Preferred Stock (“Series E”) are entitled to receive cash dividends at a rate of 8.750% per annum of the $25.00 liquidation preference per share (equal to $2.1875 per annum per share). From and including the date of original issue (January 21, 2026) but excluding February 15, 2031, holders of shares of our 8.750% Series F Fixed-Rate Reset Cumulative Redeemable Preferred Stock (“Series F”) are entitled to receive cumulative cash dividends at a rate of 8.750% per annum of the $25.00 liquidation preference per share (equivalent to $2.1875 per annum per share). Holders of shares of our Series F, from and including February 15, 2031, are entitled to receive cumulative cash dividends based on the five-year Treasury rate plus a spread of 5.009%. Dividends for the Series A, Series B, Series C, Series D, Series E and Series F are payable quarterly in arrears on or about the 15th day of each February, May, August and November.
Preferred dividends declared for the quarter ended March 31, 2026 were $37.1 million.
Common Stock
Our certificate of incorporation authorizes 2.0 billion shares of common stock, par value $0.01 per share.
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The Company has an “at-the-market” equity offering program (the “ATM Program”) pursuant to which we may sell shares of our common stock, par value $0.01 per share, having an aggregate offering price of up to $750.0 million, from time to time. During the three months ended March 31, 2026, the Company did not issue any shares of common stock were issued under the ATM Program.
Additionally, Rithm Capital’s stock repurchase program provides flexibility to return capital when deemed accretive to shareholders. During the three months ended March 31, 2026, we did not repurchase any shares of our common stock or our preferred stock.
Common Dividends
We generally need to distribute at least 90% of our taxable income each year (subject to certain adjustments) to our shareholders to qualify as a REIT under the Internal Revenue Code. This distribution requirement limits our ability to retain earnings and thereby replenish or increase capital to support our activities. Dividends declared for the three months ended March 31, 2026 were $139.6 million.
We will continue to monitor market conditions and the potential impact the ongoing volatility and uncertainty may have on our business. Our board of directors will continue to evaluate the payment of dividends as market conditions evolve, and no definitive determination has been made at this time. While the terms and timing of the approval and declaration of cash dividends, if any, on shares of our capital stock is at the sole discretion of our board of directors and we cannot predict how market conditions may evolve, we intend to distribute to our stockholders an amount equal to at least 90% of our REIT taxable income determined before applying the deduction for dividends paid and by excluding net capital gains consistent with our intention to maintain our qualification as a REIT under the Internal Revenue Code.
Cash Flows
The following table summarizes changes to our cash, cash equivalents and restricted cash for the periods presented:
| Three Months Ended March 31, | ||||||||||||||||||||
| 2026 | 2025 | Change | ||||||||||||||||||
Beginning of period — cash, cash equivalents and restricted cash | $ | 2,789,413 | $ | 1,917,809 | $ | 871,604 | ||||||||||||||
| Net cash provided by operating activities | 100,687 | 1,421,267 | (1,320,580) | |||||||||||||||||
| Net cash used in investing activities | (739,452) | (1,304,457) | 565,005 | |||||||||||||||||
| Net cash provided by financing activities | 312,320 | 55,953 | 256,367 | |||||||||||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | (326,445) | 172,763 | (499,208) | |||||||||||||||||
End of Period — Cash, Cash Equivalents and Restricted Cash | $ | 2,462,968 | $ | 2,090,572 | $ | 372,396 | ||||||||||||||
Operating Activities
Net cash provided by operating activities was approximately $100.7 million and $1.4 billion for the three months ended March 31, 2026 and 2025, respectively. The year-over-year decrease was primarily driven by $1.0 billion lower net cash receipts from mortgage loan pooling and related activity in the 2026 period, reflecting higher loan pool sales in the prior-year quarter. This reduction in cash from loan sales was partially offset by lower repayments of warehouse credit facilities, which are reflected in cash flows from financing activities.
Investing Activities
Net cash used in investing activities was approximately $739.5 million and $1.3 billion for the three months ended March 31, 2026 and 2025, respectively. The decrease in net cash used in investing activities was primarily driven by purchases of government-backed securities during the three months ended March 31, 2025, with no comparable purchases during the current period, partially offset by higher net cash used for residential transitional loan activity during the three months ended March 31, 2026.
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Financing Activities
Net cash provided by financing activities was approximately $312.3 million and $56.0 million for the three months ended March 31, 2026 and 2025, respectively. The increase was primarily driven by higher net borrowings under secured financing agreements and warehouse credit facilities during the 2026 period, reflecting increased loan origination activity.
INTEREST RATE, CREDIT AND SPREAD RISK
We are subject to interest rate, credit and spread risk with respect to our investments. These risks are further described under “Quantitative and Qualitative Disclosures About Market Risk.”
OFF-BALANCE SHEET ARRANGEMENTS
We have material off-balance sheet arrangements related to our non-consolidated securitizations of residential mortgage loans treated as sales in which we retained certain interests. We believe that these off-balance sheet structures presented the most efficient and least expensive form of financing for these assets at the time they were entered and represented the most common market-accepted method for financing such assets. Our exposure to credit losses related to these non-recourse, off-balance sheet financings is limited to $0.7 billion. As of March 31, 2026 there was $10.9 billion in total outstanding UPB of residential mortgage loans underlying such securitization trusts that represent off-balance sheet financings.
We have material off-balance sheet arrangements related to our involvement with funds and other vehicles, primarily related to providing asset management services and, in certain cases, investments in such non-consolidated entities. As of March 31, 2026, our maximum exposure to loss of $1.3 billion represents the potential loss of current investments or income and fees receivable from these entities, as well as the obligation to repay unearned revenues, primarily incentive income subject to clawback, in the event of any future fund losses, as well as unfunded commitments to certain funds. The Company does not provide, nor is it required to provide, any type of non-contractual financial or other support beyond its share of capital commitments.
We are party to mortgage loan participation purchase and sale agreements, pursuant to which we have access to uncommitted facilities that provide liquidity for recently sold mortgage-backed securities (“MBS”) up to the MBS settlement date. These facilities, which we refer to as gestation facilities, are a component of our financing strategy and are off-balance sheet arrangements.
TBA dollar roll transactions represent a form of off-balance sheet financing accounted for as derivative instruments. In a TBA dollar roll transaction, we do not intend to take physical delivery of the underlying agency MBS and will generally enter into an offsetting position and net settle the paired-off positions in cash. However, under certain market conditions, it may be uneconomical for us to roll our TBA contracts into future months and we may need to take or make physical delivery of the underlying securities. If we were required to take physical delivery to settle a long TBA contract, we would have to fund our total purchase commitment with cash or other financing sources and our liquidity position could be negatively impacted.
As of March 31, 2026, we did not have any other commitments or obligations, including contingent obligations, arising from arrangements with unconsolidated entities or persons that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, cash requirements or capital resources.
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CONTRACTUAL OBLIGATIONS
As of March 31, 2026, we had the following material contractual obligations:
| Contract | Terms | |||||||
| Debt Obligations: | ||||||||
| Secured Financing Agreements | Described under Note 17 to our consolidated financial statements. | |||||||
| Secured Notes and Bonds Payable | Described under Note 17 to our consolidated financial statements. | |||||||
| Unsecured Senior Notes | Described under Note 17 to our consolidated financial statements. | |||||||
| Other Contractual Obligations: | ||||||||
| Lease Liability | Described under Note 15 to our consolidated financial statements. | |||||||
| Interest Rate Swaps | Described under Note 16 to our consolidated financial statements. | |||||||
See Note 25 and Note 27 to our consolidated financial statements for information regarding commitments and material contracts entered into subsequent to March 31, 2026, if any. As described in Note 25, we have committed to purchase certain future servicer advances. The actual amount of future advances is subject to significant uncertainty. However, we currently expect that net recoveries of servicer advances will exceed net fundings for the foreseeable future. This expectation is based on judgments, estimates and assumptions, all of which are subject to significant uncertainty. In addition, those certain limited liability companies which hold certain of our consumer loan portfolios have invested in loans with an aggregate of $128.6 million of unfunded and available revolving credit privileges as of March 31, 2026. However, under the terms of these loans, requests for draws may be denied and unfunded availability may be terminated at management’s discretion. Genesis had commitments to fund up to $1.9 billion of additional advances on existing mortgage loans as of March 31, 2026. These commitments are generally subject to loan agreements with covenants regarding the financial performance of the customer and other terms regarding advances that must be met before Genesis funds the commitment. Rithm Capital has invested in various CRE projects. As part of its investments, Rithm Capital is required to fund its pro rata share of future capital contributions subject to certain limitations. As of March 31, 2026, the Company has an unfunded capital commitment to fund up to $80.0 million on an existing loan to a certain CRE borrower. As of March 31, 2026, the Company has unfunded capital commitments of $548.9 million, of which $35.6 million relates to commitments of consolidated funds. Approximately $129.9 million of the commitments will be funded by contributions to the Company from certain current and former employees and executive managing directors. The Company expects to fund these commitments over approximately the next 6 years. The Company has guaranteed these commitments in the event any executive managing director fails to fund any portion when called by the fund. The Company has historically not funded any of these commitments and does not expect to in the future, as these commitments are expected to be funded by the Company’s executive managing directors individually. Additionally, the Company, through a consolidated subsidiary, entered into a joint venture which the Company consolidates, with a third party to acquire an interest in an affiliated fund. As of March 31, 2026, the unfunded capital commitment to the consolidated joint venture was $31.4 million, of which $25.1 million is expected to be funded by the third-party.
INFLATION
Substantially all of our assets and liabilities are financial in nature. As a result, interest rates and other factors affect our performance more so than inflation, although inflation rates can often have a meaningful influence over the direction of interest rates. Furthermore, our financial statements are prepared in accordance with GAAP and our distributions are determined by our board of directors primarily based on our taxable income, and, in each case, our activities and balance sheet are measured with reference to historical cost and/or fair market value without considering inflation. See “Quantitative and Qualitative Disclosures About Market Risk—Interest Rate Risk.”
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk is the exposure to loss resulting from changes in interest rates, credit spreads, foreign currency exchange rates, commodity prices, equity prices and other market-based risks. The primary market risks that we are exposed to are interest rate risk, mortgage basis spread risk, prepayment rate risk and credit risk. These risks are highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors beyond our control. All of our market risk sensitive assets, liabilities and derivative positions (other than TBAs) are for non-trading purposes only. For a further discussion of how market risk may affect our financial position or results of operations, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Use of Estimates.”
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Interest Rate Risk
Changes in interest rates, including changes in expected interest rates or “yield curves,” affect our investments in various ways, the most significant of which are discussed below.
Fair Value Impact
Changes in the level of interest rates also affect the yields required by the marketplace on interest rate instruments. Increasing interest rates would decrease the value of the fixed-rate assets we hold at the time because higher required yields result in lower prices on existing fixed-rate assets in order to adjust their yield upward to meet the market.
Changes in unrealized gains or losses resulting from changes in market interest rates do not directly affect our cash flows, or our ability to pay a dividend, to the extent the related assets are expected to be held and continue to perform as expected, as their fair value is not relevant to their underlying cash flows. Changes in unrealized gains or losses would impact our ability to realize gains on existing investments if they were sold. Furthermore, with respect to changes in unrealized gains or losses on investments which are carried at fair value, changes in unrealized gains or losses would impact our net book value and, in certain cases, our net income.
Changes in interest rates can also have ancillary impacts on our investments. Generally, in a declining interest rate environment, residential mortgage loan prepayment rates increase which in turn would cause the value of MSRs, MSR financing receivables, Excess MSRs and the rights to the base fee components of MSRs to decrease, because the duration of the cash flows we are entitled to receive becomes shortened, and the value of loans and non-Agency securities to increase, because we generally acquired these investments at a discount whose recovery would be accelerated. With respect to a significant portion of our MSRs and Excess MSRs, we have recapture agreements, as described in Note 5 to our consolidated financial statements. These recapture agreements help to protect these investments from the impact of increasing prepayment rates. In addition, to the extent that the loans underlying our MSRs, MSR financing receivables, Excess MSRs and the rights to the base fee components of MSRs are well-seasoned with credit-impaired borrowers who may have limited refinancing options, we believe the impact of interest rates on prepayments would be reduced. Conversely, in an increasing interest rate environment, prepayment rates decrease which in turn would cause the value of MSRs, MSR financing receivables, Excess MSRs and the rights to the base fee components of MSRs to increase and the value of loans and non-Agency securities to decrease. To the extent we do not hedge against changes in interest rates, our balance sheet, results of operations and cash flows would be susceptible to significant volatility due to changes in the fair value of, or cash flows from, our investments as interest rates change. However, rising interest rates could result from more robust market conditions, which could reduce the credit risk associated with our investments. The effects of such a decrease in values on our financial position, results of operations and liquidity are discussed below under “—Prepayment Rate Exposure.”
Changes in the value of our assets could affect our ability to borrow and access capital. Also, if the value of our assets subject to short-term financing were to decline, it could cause us to fund margin, or repay debt, and affect our ability to refinance such assets upon the maturity of the related financings, adversely impacting our rate of return on such investments.
We are subject to margin calls on our secured financing agreements. Furthermore, we may, from time to time, be a party to derivative agreements or financing arrangements that are subject to margin calls, or mandatory repayment, based on the value of such instruments. We seek to maintain adequate cash reserves and other sources of available liquidity to meet any margin calls, or required repayments, resulting from decreases in value related to a reasonably possible (in our opinion) change in interest rates but there can be no assurance that our cash reserves will be sufficient.
In addition, changes in interest rates may impact our ability to exercise our call rights and to realize or maximize potential profits from them. A significant portion of the residential mortgage loans underlying our call rights bear fixed-rates and may decline in value during a period of rising market interest rates. Furthermore, rising rates could cause prepayment rates on these loans to decline, which would delay our ability to exercise our call rights. These impacts could be at least partially offset by potential declines in the value of non-Agency securities related to the call rights, which could then be acquired more cheaply, and in credit spreads, which could offset the impact of rising market interest rates on the value of fixed-rate loans to some degree. Conversely, declining interest rates could increase the value of our call rights by increasing the value of the underlying loans.
We believe our consumer loan investments generally have limited interest rate sensitivity given that our portfolio is mostly composed of seasoned loans with credit-impaired borrowers who are paying fixed-rates, who we believe are relatively unlikely to change their prepayment patterns based on changes in interest rates.
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Interest rates are highly sensitive to many factors, including fiscal and monetary policies and domestic and international economic and political considerations, as well as other factors beyond our control.
The interest rates on our secured financing agreements, as well as adjustable-rate mortgage loans in our securitizations, are generally based on SOFR, which is subject to national, international and other regulatory guidance for reform.
The table below provides comparative estimated changes in our book value based on a parallel shift in the yield curve (assuming an unchanged mortgage basis), including changes in our book value resulting from potential related changes in discount rates:
Estimated Change in Book Value (in $ millions)(A) | ||||||||||||||
| Interest Rate Change (bps) | March 31, 2026 | December 31, 2025 | ||||||||||||
| +50bps | +11.2 | -41.2 | ||||||||||||
| +25bps | +22.2 | +7.7 | ||||||||||||
| -25bps | -55.3 | -64.5 | ||||||||||||
| -50bps | -143.9 | -185.6 | ||||||||||||
(A)Amounts shown are pre-tax.
Mortgage Basis Spread Risk
Mortgage basis measures the spread between the yield on current coupon MBS and benchmark rates including treasuries and swaps. The level of mortgage basis is driven by demand and supply of mortgage-backed instruments relative to other rate-sensitive assets. Changes in the mortgage basis have an impact on prepayment rates driven by the ability of borrowers underlying our portfolio to refinance. A lower mortgage basis would imply a lower mortgage rate which would increase prepayment speeds due to higher refinance activity and, therefore, lower fair value of our mortgage portfolio. The mortgage basis is also correlated with other spread products such as corporate credit.
The table below provides comparative estimated changes in our book value based on changes in mortgage basis:
Estimated Change in Book Value (in $ millions)(A) | ||||||||||||||
| Mortgage Basis Change (bps) | March 31, 2026 | December 31, 2025 | ||||||||||||
| +20bps | +92.8 | +66.8 | ||||||||||||
| +10bps | +46.4 | +33.4 | ||||||||||||
| -10bps | -46.4 | -33.4 | ||||||||||||
| -20bps | -92.8 | -66.8 | ||||||||||||
(A)Amounts shown are pre-tax.
Prepayment Rate Exposure
Prepayment rates significantly affect the value of MSRs and MSR financing receivables, Excess MSRs, the base fee component of MSRs (which we own as part of our servicer advance investments), non-Agency securities and loans, including consumer loans. Prepayment rate is the measurement of how quickly borrowers pay down the UPB of their loans or how quickly loans are otherwise brought current, modified, liquidated or charged off. The price we pay to acquire certain investments will be based on, among other things, our projection of the cash flows from the related pool of loans. Our expectation of prepayment rates is a significant assumption underlying those cash flow projections. If the fair value of MSRs and MSR financing receivables, Excess MSRs or the base fee component of MSRs decreases, we would be required to record a non-cash charge, which would have a negative impact on our financial results. Furthermore, a significant increase in prepayment rates could materially reduce the ultimate cash flows we receive from MSRs and MSR financing receivables, Excess MSRs or our right to the base fee component of MSRs, and we could ultimately receive substantially less than what we paid for such assets. Conversely, a significant decrease in prepayment rates with respect to our loans or RMBS could delay our expected cash flows and reduce the yield on these investments.
We seek to reduce our exposure to prepayment through the structuring of our investments. For example, in our MSR and Excess MSR investments, we seek to enter into “recapture agreements” whereby our MSR or Excess MSR is retained if the applicable servicer or subservicer originates a new loan the proceeds of which are used to repay a loan underlying an MSR or Excess MSR in our portfolio. We seek to enter into such recapture agreements in order to protect our returns in the event of a rise in voluntary prepayment rates.
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Credit Risk
We are subject to varying degrees of credit risk in connection with our assets. Credit risk refers to the ability of each individual borrower underlying our MSRs, MSR financing receivables, Excess MSRs, servicer advance investments, securities and loans to make required interest and principal payments on the scheduled due dates. If delinquencies increase, then the amount of servicer advances we are required to make will also increase, as would our financing cost thereof. We may also invest in loans and non-Agency securities which represent “first loss” pieces; in other words, they do not benefit from credit support although we believe they predominantly benefit from underlying collateral value in excess of their carrying amounts. We do not expect to encounter credit risk in our Agency RMBS, and we do anticipate credit risk related to non-Agency securities, residential mortgage loans and consumer loans.
We seek to reduce credit risk through prudent asset selection, actively monitoring our asset portfolio and the underlying credit quality of our holdings and, where appropriate and achievable, repositioning our investments to upgrade their credit quality. Our pre-acquisition due diligence and processes for monitoring performance include the evaluation of, among other things, credit and risk ratings, principal subordination, prepayment rates, delinquency and default rates, and vintage of collateral.
For our MSRs, MSR financing receivables and Excess MSRs on Agency collateral and our Agency RMBS, delinquency and default rates have an effect similar to prepayment rates. Our Excess MSRs on non-Agency portfolios are not directly affected by delinquency rates, because the servicer continues to advance principal and interest until a default occurs on the applicable loan, so delinquencies decrease prepayments therefore having a positive impact on fair value, while increased defaults have an effect similar to increased prepayments. For our non-Agency securities and loans, higher default rates can lead to greater loss of principal. For our call rights, higher delinquencies and defaults could reduce the value of the underlying loans, therefore reducing or eliminating the related potential profit.
Market factors that could influence the degree of the impact of credit risk on our investments include (i) unemployment levels and the general economy, which impact borrowers’ ability to make payments on their loans, (ii) home prices, which impact the value of collateral underlying residential mortgage loans, (iii) the availability of credit, which impacts borrowers’ ability to refinance and (iv) other factors, all of which are beyond our control.
Liquidity Risk
The assets that comprise our asset portfolio are generally not publicly traded. A portion of these assets may be subject to legal and other restrictions on resale or otherwise be less liquid than publicly-traded securities. The illiquidity of our assets may make it difficult for us to sell such assets if the need or desire arises, including in response to changes in economic and other conditions. See Note 18 to our consolidated financial statements for a sensitivity analysis for MSRs and MSR financing receivables.
Real Estate Risk
Residential and commercial property values are subject to volatility and may be affected adversely by a number of factors, including, but not limited to, national, regional and local economic conditions (which may be adversely affected by industry slowdowns, public health crises and other factors); local real estate conditions (such as an oversupply of housing and commercial and residential vacancies and corresponding impacts on market rents); construction quality, age and design; demographic factors; and retroactive changes to building or similar codes. Increases in interest rates will result in lower refinancing volume and home price increases will slow. Decreases in property values may cause us to suffer losses.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. The Company’s disclosure controls and procedures are designed to provide reasonable assurance that information is recorded, processed, summarized and reported accurately and on a timely basis. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective.
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Changes in Internal Control Over Financial Reporting
There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are or may become, from time to time, involved in various disputes, litigation and regulatory inquiry and investigation matters that arise in the ordinary course of business. Given the inherent unpredictability of these types of proceedings, it is possible that future adverse outcomes could have a material adverse effect on our business, financial position or results of operations.
Rithm Capital is, from time to time, subject to inquiries by government entities. Rithm Capital currently does not believe any of these inquiries would result in a material adverse effect on Rithm Capital’s business.
ITEM 1A. RISK FACTORS
For the three months ended March 31, 2026, there were no material changes to the risk factors disclosed under Part I, Item 1A. “Risk Factors” of our 2025 Form 10-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
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ITEM 6. EXHIBITS
| Exhibit Number | Exhibit Description | |||||||
3.1 | Certificate of Designations of Rithm Capital Corp., designating the Company’s 8.750% Series F Fixed-Rate Reset Cumulative Redeemable Preferred Stock, par value $0.01 per share (Incorporated by reference to Exhibit 3.10 to the Company’s Form 8-Q filed on January 21, 2026. | |||||||
4.1 | Form of certificate representing the 8.750% Series F Fixed-Rate Reset Cumulative Redeemable PReferred Stock of Rithm Capital Corp. (Incorporated by reference to Exhibit 4.1 to the Company’s Form 8-A filed on Junary 21, 2026. | |||||||
31.1* | Certification of Chief Executive Officer as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||||||
31.2* | Certification of Chief Financial Officer as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||||||
32.1** | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||||||
32.2** | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||||||
| 101* | The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income; (iv) Consolidated Statements of Changes in Stockholders’ Equity; (v) Consolidated Statements of Cash Flows; and (vi) Notes to Consolidated Financial Statements | |||||||
| 104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||
| * | Exhibit filed herewith. | ||||
| ** | Exhibit furnished herewith. | ||||
128
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 thereunto duly authorized:
| RITHM CAPITAL CORP. | ||||||||
| By: | /s/ Michael Nierenberg | |||||||
| Michael Nierenberg | ||||||||
| Chairman of the Board, Chief Executive Officer and President | ||||||||
| (Principal Executive Officer) | ||||||||
| May 4, 2026 | ||||||||
| By: | /s/ Nicola Santoro, Jr. | |||||||
| Nicola Santoro, Jr. | ||||||||
| Chief Financial Officer, Chief Accounting Officer and Treasurer | ||||||||
| (Principal Financial Officer) | ||||||||
| May 4, 2026 | ||||||||
129
FAQ
How did Rithm Capital Corp. (RITM) perform in the quarter ended March 31, 2026?
Rithm Capital generated net income of $109.5 million, with $67.8 million attributable to common stockholders. Revenue reached $1.38 billion, supported by servicing, interest income, loan sales, asset management fees and growing rental income from its commercial real estate portfolio.
What was Rithm Capital’s earnings per share and dividend for Q1 2026?
Rithm Capital reported diluted EPS of $0.12 for common stock in Q1 2026 and declared a $0.25 dividend per common share. Preferred stock dividends totaled $34.8 million, reflecting a meaningful preferred equity base alongside common distributions.
What are the key balance sheet figures for Rithm Capital (RITM) as of March 31, 2026?
As of March 31, 2026, Rithm Capital reported $53.37 billion in total assets and $43.87 billion in total liabilities. Total stockholders’ equity stood at $9.14 billion, including $1.63 billion of preferred equity and $5,579 thousand of common par value.
How significant are mortgage servicing rights (MSRs) in Rithm Capital’s business?
MSRs and related financing receivables are a core asset, with a carrying value of $10.86 billion and underlying unpaid principal balance of $593.6 billion as of March 31, 2026. They generate servicing revenue but are sensitive to interest rates, prepayments and valuation assumptions.
What impact did Crestline and Paramount/Elecor have on Rithm Capital’s platform?
The Crestline acquisition added $844.8 million of insurance company investments and $84.3 million of intangibles, plus $182.8 million of goodwill, expanding asset management and insurance strategies. Acquiring Paramount/Elecor added Class A office properties, contributing $171.2 million of quarterly rental and variable revenue.
How leveraged is Rithm Capital Corp. following recent growth?
Rithm Capital reported $30.18 billion of debt as of March 31, 2026, including secured financing agreements, secured notes, bonds and unsecured notes. Interest expense and warehouse fees were $430.7 million for the quarter, reflecting substantial but actively managed funding across its asset base.