Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

Stonegate Mortgage's Corporation (NYSE:SGM)

Q2 2014 Results Earnings Conference Call

August 07, 2014, 11:00 AM ET

Executives

Michael McFadden - Investor Relations

Jim Cutillo - Founder & CEO

Robert Eastep - CFO

Analysts

Chas Tyson - Keefe, Bruyette & Woods

Douglas Harter - Credit Suisse

Jessica Ribner - FBR Capital Markets & Co

Henry Coffey - Sterne Agee

Jeremy Campbell – Barclays

Ken Bruce - BofA Merrill Lynch

Jim Fowler - Harvest Capital Strategies

Christopher Testa - Sidoti & Company

Operator

Good day ladies and gentlemen and welcome to Stonegate Mortgage Corporation's Second Quarter 2014 Earnings Results Conference Call. My name is Lori, and I will be your operator today.

At this time all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of the call.

I would now like to turn the floor over to Mr. Michael McFadden.

Michael McFadden

Thank you, Lori, and good afternoon everyone. We appreciate you joining us on today's call. Joining me today is Jim Cutillo, Stonegate's Chief Executive Officer and Rob Eastep, Stonegate's Chief Financial Officer.

Financial results that will be discussed on today’s call and located in the press release are unaudited. Additionally, today’s discussion and accompanying materials include forward-looking statements and as such are subject to risks and uncertainty that we have discussed in detail in our documents filed with the SEC. Specifically our annual report on Form 10-K which was filed on March 14, 2014, which identifies important risks factors that can cause actual results to differ from the forward-looking statements.

Finally, the financial results and matters that we will be discussing today contain non-GAAP measures that Stonegate's management uses in evaluating company performance. GAAP to non-GAAP reconciliations are located in the press release and appended to the slide presentation. These non-GAAP measures are not intended to be a substitute for our GAAP results.

Please note that a recording of this call and accompanying presentation materials can be found on Stonegate Mortgage’s Investor Relations website at www.investors.stonegatemtg.com. Please refer to that website for important materials, including the Q2 earnings press release. A replay of this call will also be made available on the website by the end of today.

At this time I would like to turn the call over to Jim Cutillo, Founder and CEO of Stonegate Mortgage.

Jim Cutillo

Thank you, Mike and welcome everyone to our Q2, 2014 earnings call. As Mike mentioned, Rob Eastep is also joining me on today's call and will discuss Stonegate's financial results in more detail momentarily.

Let's begin on Slide 3. This is the graphic that most of you have already probably seen but I believe is a good place to start. We believe the integrated platform that we have built, puts us in a unique position in the U.S. residential mortgage market.

And our origination platform creates the most distinction. With our retail business and extensive network of third party originators, we are well-positioned for the emerging market.

As investors in mortgage assets who want partners with aggregators of product, they have large distribution networks and enterprise risk management framework. As we've now seen in the servicing market, buying MSR is becoming more and more challenging from both a cost and regulatory perspective. So we believe the ability to source mortgage product related assets for secondary market investors is key.

Our financing business also provides the necessary liquidity to the market for originators of these products. Please turn to Slide 4, for a brief overview of our financial and operational performance during Q2.

Q2 provide us with a lot of bright signs as our strategies are beginning to flow through our income statement. Our GAAP revenue grew to 57.6 million as we saw increases in gain on mortgage loans held for sale, servicing and origination fee income and interest income during the quarters.

GAAP income came in at 268,000 or adjusted net income came in at 7.4 million or $0.29 per share. The only adjustments we made in calculating the non-GAAP net income figure were the fair market value chain in the MSR asset and stock based compensation.

Note, that we did not adjust for any additional ramp expenses associated with the MSR deal this quarter, as we indicated would be the case on our Q1 earnings call.

Operationally Q2 was another growth quarter for Stonegate as we continued to execute on our goals becoming a significant player in the emerging mortgage market by leveraging our diversified platform and extensive network of TPOs to gain market share.

We achieved a company record in origination volume at 3.3 billion, a 37% increase from the prior record of 2.4 billion last quarter. Interest rate locks which provide a look into future period originations were also a company record at 4.7 billion.

Of those locks, retail and wholesale grew 54% and 60% respectively from Q1 highlighting the effect of the recent acquisitions of Nationstar assets and Crossline Capital.

Additionally, NattyMac continues to ramp up as our commitments outstanding to correspondence totaled $347 million at the end of the quarter resulting an increased fee income. Overall, we are pleased with both our operational and financial results in Q2.

I'll now turn the call over to Rob, to discuss financial results in more detail on the following slides.

Rob Eastep

Thanks Jim. On Slides 5 and 6, we provide details behind our GAAP revenue of 57.6 million during the quarter. Despite the 10.7 million negative fair value market adjustment to the MSR asset, GAAP revenues were up 50% from the previous quarter and up 33% compared with the same quarter last year primarily due to significantly higher gain on sale revenue over both the first quarter and the prior year second quarter.

This increase in gain on sale revenue was driven by higher overall origination volume, channel mix improvement toward more retail and wholesale, as well as increased cash margins in the channels. Let me emphasize these improvements resulted in gain on sale margins of 141 basis points which was 23% higher in Q2 compared to Q1.

Loan origination fees, servicing fees and interest income were also higher compared to prior quarter and prior year, driven by higher origination volume and servicing UPB.

A graph on a left hand slide of Slide 6, shows a revenue bridge from the first quarter to this quarter, which shows the changes in each of the revenue component I just mentioned. This points to the improvements in our financial results as the only red bar is the change in MSR value, which is mostly outside of our control as it is dependent on the market interest rates, which saw a decline from the end of Q1 to the end of Q2.

On the lower right hand side of this page, we showed the 23 basis point improved gain on sales margins from Q1 to Q2, which is reflected primarily in the improvement in cash gain on sales, capitalized MSR and the value of the pipeline inventory change and value harshly offset by other items.

On Slide 23 of the appendix, we provide the breakdown of the different components of gains on sales on mortgage lines held for sale. You will notice that we have returned to a positive cash gain on sale position while the capitalized rate of the MSR has remained relatively stable.

The farthest-right green bar is important to call attention to, as this shows that our pipeline is 5.7 million more valuable in comparison to the end of Q1.

Turning to Slide 7, for the second quarter 2014, we reported GAAP net income of 268,000 for a penny per diluted share. Adjusting net income was 7.4 million to $0.29 per diluted share compared to the first quarter of 2014 adjusted net income of 3.4 million or $0.13 per diluted share.

The adjustments made to the GAAP net income include the fair market value adjustment to the MSR and the share based compensation for this quarter.

As we outlined in the Q1 earnings call and as Jim just mentioned earlier, we did not adjust for any additional ramp expenses associated with the Nationstar acquisition during to quarter. We continue to see a positive trend in productivity from this Group, as they continue to ramp up the full productivity.

The favorable adjusted net income change we experienced in the second quarter compared to the prior quarter, was due primarily to the increase gain on sale revenue, as well as higher servicing fees due to our higher servicing portfolio and increased interest income.

As we anticipated, we also experienced the decline of 41 basis points in operating expenses in the second quarter as compared to the first quarter. As we continue to experience scale benefits from our growing businesses, we expect to achieve additional improvements on the expense side.

At this time, I’d like to turn the call back over to Jim, to discuss the results of our operating lines of businesses, as well as our strategic initiatives in recent developments before we open the call up for questions.

Jim Cutillo

Thank you, Rob. Please turn to Slide 8.

As I stated previously we are once again able to increase our origination volume and locks in the second quarter due to our diversified origination business, prior acquisition and our strategic initiatives around geographic expansion, focused on non agency, NattyMac technology and others.

Origination volume grew 37% over the first quarter and 59% over the second quarter of last year.

Interest rate locks of a record 4.7 billion were up significantly compared to the prior quarter and prior year. We saw growth in both purchase and refinance volume during the period.

Refinance volume increased 43% over 1Q, 2014 as lower rates grow higher demand and we continued to focus on direct consumer business.

Purchase volume also increased and was up 32% over 1Q 2014. We continue to pursue opportunities to grow our call center footprint, which is highly scalable and which we expect will continue to generate increase refinance business and a higher return potential. This also provides us with an efficient means of recapturing our growing servicing portfolio.

Slide 9 further shows the benefits of our diversified origination platform. During the second quarter, we continued to gain market share as we grew originations that are faster pace than the overall market.

Additionally, gain on sale margins improved 23 basis points over Q1, while primary and secondary spreads remain relatively flat. This increase is primarily attributable to increased retail and wholesale volume, as our percentage of overall originations, which will provide higher gain on sale margins than the correspondent channel.

Our operating expenses are also trending in the right direction in Q2 as we reduced our overall expenses excluding interest expenses at 42 basis points compared to Q1. This is the positive sign and shows that we are beginning to benefit from the economies of scale because retail and wholesale invariably have higher operating expenses than correspondent.

We still believe that 4 billion in total quarterly origination volume is the level that gets us to the appropriate scale.

Turning to Slide 10, you can see that the channel shift continues as we continue to focus on retail, and wholesale channels. Retail volume accounted for 13% of locks during the quarter and wholesale accounted for 24%. This trend has continued in the July as retail and wholesales locks per day comprise 18% and 26% of overall locks respectively.

We continue to increase our resource that dedicated to these growing channels and at the end of Q2, we employed a total of 277 mortgage advisors and managed over 12061 wholesale accounts.

In the appendix of this presentation, we have provided some historical data on our average production per mortgage advisor and wholesale account including data through Q2. The units for mortgage advisor and originations per wholesale account continue to head in the right direction.

July locks per day ran at 62.8 million which is a decrease from the monthly average in Q2, this is partially due to seasonality. However, we are mostly pleased with the channel distribution as we look at mixed like a diversified portfolio. Our mix continues to become more diversified as retail and wholesale made up 44% of our total locks in July compared to 37% in the second quarter.

Slides 11 and 12, focus on our servicing business which continue to deliver strong results in the second quarter. Our service in UPB at the end of the second quarter was 16.7 billion, a 19% increase in the previous period and 121% increase from the second quarter of 2013.

The composition of our servicing portfolio at the end of Q2 was 39% government and 61% conventional with the weighted average coupon rate of 3.99%.

Government MSRs have attracted risk-return characteristics from an origination and servicing standpoint, as gain on sale margins and servicing fees are typically higher.

Turning to Slide 12, as an asset manager we are constantly looking for opportunities to optimize the return on our capital. We have seen servicing multiples increase over the course of the last year, while mortgage rates have dropped slightly.

We saw this is an opportunity to monetize the gain on our investment as we recently entered into an LOI to sale 1.98 billion of Fannie Mae MSRs at 125 basis points. These MSRs were marked on our balance sheet at 120 basis points, as of the end of Q2. There is some confusion in the market as to the different values of MSRs held by services, as all MSRs are not created equal.

To provide some context, these are our Fannie Mae MSRs which typically carry smaller servicing strips than government MSRs. These are also order than the average age of our portfolio serve a shorter remaining life.

We intend to redeploy the proceeds of the sale back in the newly originated MSRs with the intent of lowering our cost basis in the assets and providing a higher return on our capital.

The way we think about this trade, is a comparison of the return we're giving up, which is effectively the discount rate of the MSR which can be found in our 10-Q but ranges from 9% to 11% compared to the return potential of creating newly originated MSRs.

At our current gain on sale levels and reduced expenses, we are confident the return potential of the latter far outweighs the return potential of retaining that specific set of MSRs.

On the following slide, we outlined a recent MSR financing facility we signed. The advanced rate provided on the MSR is approximately 50% of the fair market value of the asset determined by the lender. The lender for this facility calculates their own fair market value to compare to our internal and external valuation marks.

Therefore we now have three sources of data to validate our MSR valuation. We feel that this additional capital provides a significant, sufficient runway for new originations before needing to look to raise additional capital.

The cost of this facility was also more preferential than the alternatives that currently exist today in the market. We are also working with capital providers on the similar facility for Ginnie Mae MSRs.

Turning to our financing business on Slide 14, Stonegate generated 2.7 million in net interest income in Q2 from its loans held for sale and NattyMac outstanding. Funding volume for NattyMac also ramped up in the last three quarters and July proved to be the best month yet, as we funded 195 million in loans compared on average to 141 million per month in Q2.

Financing fees collected from NattyMac customers that continue to accelerate at a rapid pace as well, increasing by 237% over the first quarter or the number of units funded increased by 79%.

Turning to Slide 15, our financing platform continues to ramp up as the number of customers and commitments accelerate. Current commitments as of July 31, totaled 364 million to 97 customers and represent 12% of our total corresponded accounts, which means we have a lot of growth potential within our existing customer base.

We believe our ability to provide liquidity and efficiency to our corresponding customers as a means of building stronger relationship and earning hire wallet share with these clients.

We also believe this is competitive advantage over other non-banks and allows us to compete with bank-owned mortgage originators who have historically offered warehouse financing as a means of gaining market share.

As is demonstrated on the slide, our strategy continues to yield strong results. On average, three months following the signing up with NattyMac warehouse line, our correspondents are locking 74% more volume with Stonegate compared to three months prior to receiving a warehouse line. The stronger relationships and higher wallet share translate into lower net cost to originate MSRs.

As the number continues positive, this will result in a higher percentage of correspondent loans being purchased of NattyMac warehouse lines, which reduces our net cash investment in the MSRs as we are collecting fee and additional net interest income spread.

Slide 16 provides some detailed information on our non-agency platform which is a key strategic focus of ours and which we believe is uniquely positioned for growth and the non-agency market continues to take shape.

Our non-agency locks were $223 million in the second quarter, up 168% from Q1 and locks continue to increase through July. We see the most opportunity in the near agency market and believe we have an origination network and technology to provide interested investors with transparency into the asset quality and in a large enough scale it's worth their investment.

Additionally, we've only recently entered some of the markets with the highest amount of non-agency activity such as California and Virginia. We believe these are significant expansion opportunities within these markets and others.

Our view is when the market does fully return, we'll be in a very strong position because of our - we’re not forced to buy these assets like most others who specialize in securitization. We have access to 1,200 plus third-party originators and a growing retail channels to source the product.

We also have a diversified investor base with an appetite for various products and channels, we feel are uniquely positioned in our non-agency space. We control all aspects of the process including credit, collateral and compliance and this control allows us to deliver consistent and predictable outcomes for our investors.

Overall, we believe our diverse product offerings coupled with consistent process resonates well with investors and has us poised for significant growth in this space.

Now, on Slides 17 and 18, I’ll provide an update on some recent developments and current strategic initiatives that we believe are key drivers of sustainable growth to come.

As I discussed earlier our locks per day in July decreased 14% to $62.8 million. This decrease is partially attributable to seasonality and we did see the results of our continued focus on retail and wholesale, which increased from 37% of total locks in the second quarter to 44% of total locks in July.

We also continue to drive geographic expansion opportunities and obtained licenses in Idaho and Nevada during July. Stonegate is now licensed in 45 states in Washington D.C.

In the servicing business, we're continuing to hold discussions with MSR investors on sub-servicing opportunity. As we discussed earlier, we also recently signed an LOI to sell $1.98 billion of Fannie Mae MSRs at five basis points higher than our capitalized value.

Our servicing platform is positioned to grow substantially as we've made investments in people, process and technology over the past several quarters.

The non-agency business also continues to grow as it produced $93.5 million in locks during July compared to $74.5 million on average per month in Q2. We formed Stonegate Mortgage Acceptance, LLC, a special-purpose entity, in July, that we believe will further enhance our positioning in the non-agency space.

Finally, we increased our investment in NattyMac funding to increase the liquidity available to our growing NattyMac LLC business, whish has been growing rapidly as we've expected.

In conclusion, our business is doing well in what continues to be a difficult market. Originations and gain on sale margins are solid in growing and our retail and wholesale production is increasing significantly primarily as a result of recent successful acquisitions. We continue to focus on the execution of our core strategies that we believe will help facilitate further growth and profitability.

We continue to make good progress on our geographic expansion and increase penetration of existing markets. Our market share growth continued in the second quarter and we expect new markets to facilitate additional market share growth in the coming quarters.

We continue to pursue strategic retail tuck-in acquisitions that will help facilitate growth in this profitable channel. And we will continue to pursue the expansion of our call center business either organically or through acquisition. Investments in our non-agency business are driving results and we continue to focus on the emerging market to take advantage of the many opportunities for growth in this space.

And finally most importantly, we believe significant opportunity exists to drive down our net cost to originate MSRs through mix improvement and lower operating expenses. We have several concurrent and impactful strategic initiatives underway, that we believe will help us accomplish these goals.

Overall, we had a great quarter and continue to be excited about where our business stands, our differentiated model and our growth prospects.

We'll now open the line up to your questions.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from the line of Bose George of KBW.

Chas Tyson - Keefe, Bruyette & Woods

Good morning, guys. This is actually Chas Tyson, on for Bose. Just a quick question on the MSR financing opportunity. Can you give a little color on the Ginnie Mae financing opportunity there?

John Macke

It will be similar in advance rate and slightly lower interest rate. So it'll be a syndicated facility with some banks. So, very favorable terms, very similar to the $100 million facility.

Chas Tyson - Keefe, Bruyette & Woods

Okay. Is it sizing similar, as well? Or, how do you think about that?

John Macke

Yeah, it'll be about some size. We have $200 million worth of unencumbered assets, or virtually on our books right now. And so, we have 50% advance rate against those. So, notionally it's about $100 million. It will continue to obviously grow, the base will grow as we continue to add MSRs. So, size and shape and scope very similar.

Chas Tyson - Keefe, Bruyette & Woods

Okay. And then, I just wanted to ask you about trends recently that you've seen in July. The lock volume per day was down overall. What are you guys seeing there? Is it a matter of just picking and choosing your spots to maintain your margin? Or, how do you think about that?

Jim Cutillo

Yeah, we've actually increased our margins and obviously that's reflected in our gain on sale. We think that's the better way to deploy our capital.

So, we're not chasing originations, we're actually chasing obviously profitability. So, we’re choosing to focus on retail, wholesale and then prior-approved correspondent which has better economics.

And then those customers that are using our NattyMac facility, obviously there’s an increased opportunity there for net interest income and fees spread. So, yeah, we’re just getting - what I would say laser focused on the market we want to be in. And getting the scale we need to drive our operating expenses down.

So, it's kind of turning those two knobs to get the most optimal earnings flow coming through the door.

Chas Tyson - Keefe, Bruyette & Woods

Got it. And then, just on the mix that you saw in 2Q, I saw that Crossline was about 45% of your retail book. Do you think that's a good run rate going forward? And then, within Crossline, is there any purchase in there as well? Or, is it almost all refi?

Jim Cutillo

No, they got probably a little higher than industry – they're doing what you would expect in a call center. But I think Tim is driving – we have a very focused effort on purchase business direct to consumer. We are expanding that. We're getting ready to roll that out on a much larger basis.

So, we want to prove the concept, prove the model. But that business has been growing very nicely and has been meeting our expectations and in some cases actually exceeding our expectations. I think these guys are going to have really strong third quarter.

Chas Tyson - Keefe, Bruyette & Woods

Okay. Do you have a split out between refi and purchase for Crossline?

Jim Cutillo

I don't think we've thrown that out. So, take a look at during that maybe in the next quarter or get a little bit more granular for you guys.

Chas Tyson - Keefe, Bruyette & Woods

Okay. That would be much appreciated. Thanks, guys.

Jim Cutillo

Thank you.

Operator

Your next question comes from the line of Douglas Harter of Credit Suisse.

Douglas Harter - Credit Suisse

Thanks. Jim, on the MSR sale, is that going to be an outright sale of those? Or, are you going to retain the sub-servicing on those?

Jim Cutillo

No, it's an outright sale.

Douglas Harter - Credit Suisse

And then, you talked about the decision to sell being that you could get a better price, cost of capital. Can you talk about the decision to sell versus financing it on the new facility that you just put in place?

Jim Cutillo

Yeah, well, if you look at it, I think if you, you go look at the discount rate in the Q, you’re looking at an eight say, - probably on the Fannie Mae product in 89% return if I held back through it's maturity.

So, the maturity on that may be a seven to eight year maturity, the assets were probably about 13 months old on average.

So, when you look at that, keeping that capital locked up in an 8% to 9% return versus going out and generating a new MSR where, say, your net cost originated would be 80 basis points for that particular asset, you can see the ARB and the big opportunity there to get a better return on your invested capital, which is really how we look at the business.

So, we look at the business as an asset manager. And, the only argument you could make and it wouldn't even be rational argument, would be, well, I could have held-on and got a higher multiple later as interest rates rose.

That’s kind of unpredictable outcome. At least here, I've got predictable outcome, reinvest the capital and at 80 basis point net cost to originate on an asset worth 120 to 125, I like that return a lot better.

Douglas Harter - Credit Suisse

So, I guess, how should we think about, going forward, your desire to sell versus finance, since it would seem that that logic could and would hold, going forward? So, how do we think about your desire or appetite to continue to sell pieces of the MSR portfolio, going forward?

Jim Cutillo

Well, again, we’re looking at, we’re financing them, we’re doing this very strategic and very opportunistically. And if you look at the set of assets we sold, we had a five basis point gain over book value, so to extent, we can increase our book value. I think a lot of our shareholders should reward us for that.

And opportunistically going forward, we’re looking at other ways to finance these assets that are permanent, maybe through IO sales or different alternative capital structures. So, as the market continues to mature, as an asset manager, we're going to make sure that we’re always investing our capital in the highest possible return vehicles.

So, I wouldn't write this up as, hey, these guys are going to do this always but right now we saw an opportunity to take advantage in the market, so, opportunistically.

Douglas Harter - Credit Suisse

And then, last question on this, how do you think about the impact of that sale on the scale on the cost side on the servicing business? Do you expect any impact there, or not?

Jim Cutillo

No, it’s kind of a crossover, right, because if you look at we're originating on a quarterly basis, it'll pass in the wind, it will go out and come in at the same quarter. So, we’ll probably stand more neutral. We're looking at sub-servicing opportunities to build scale.

So, and again, depending on some of the things we're working on and how we finance these assets, we do have an opportunity there, if we want to go out and invest more and do more correspondent business because we had a cheaper cost to capital or alternative going forward, we could turn that knob on and go do correspondence business to build scale.

I think we have a lot of optionality but right now we’re really focused on driving our operating expenses down, creating a very predictable positive stream of earnings here over the next couple of quarters.

Douglas Harter - Credit Suisse

Great. Thanks Jim.

Operator

Your next question comes from the line of Paul Miller of FBR Capital Markets.

Jessica Ribner - FBR Capital Markets & Co

Hey guys, it's Jessica Ribner, in for Paul today. How are you?

Jim Cutillo

Good. How are you?

Jessica Ribner - FBR Capital Markets & Co

Good, thanks. How can we think about your gain on sale margins, going forward? You mentioned that cash margins were up almost across the board this quarter. Is that sustainable for next quarter? I totally understand that you're growing the retail and wholesale and that's really going to support your margins, but do you think that what you saw this quarter was maybe not going to happen third and fourth quarter? Or, how can we think about that?

Jim Cutillo

I think one of the reasons we put the slide in there that has the primary, secondary spread, and the fact that it's flat, if you look at that, you'd say, okay, well the gain on sale margins are all things being equal, should have been flat as well, right?

So, our ability to drive mix, our ability to basically set market price versus state market price, again, we're not facing volume, we're not given margin up, we’re growing geographically, we’re creating different products strategies with non-agency, high balance, agency arms. So it's product mix, geographic expansion, channel mix, which is exactly what we said we were going to do.

So, we're just executing our plan, unless the market erodes. And if that happens, the whole industry is going to erode. We would expect our performance to continue to increase, our gain on sale to continue to increase.

Jessica Ribner - FBR Capital Markets & Co

Okay. Thank you. And how can we think also about your MSR valuation, given the write-down this quarter? And are you guys thinking about hedging the product?

Jim Cutillo

Well, again, everybody, if you look all the peer group, the interest rates went down in Q2, so there is going to be a fair market value adjustment on the MSRs.

Our ability to recapture and our ability to replenish our portfolio far out ways, any financial hedge I could ever put on the asset that would ever be, quote-unquote, in the money, or a smart hedge.

So, we don't think we need to hedge the MSR. We also think though that the way you need to look at our valuation is, well, there's two things you need to look at. One is the CPR of the assets. So the CPR is still running back of the model, meaning the model is actually, the model of CPR is actually the discount rate in the back of the Q basically. So, if you have a discount rate 8%, 9%, you're assuming that there is a 9% CPR.

So, we’re running less than that. So, it’s running less than model. So, even if we’re taking a fair market value adjustment, it doesn’t really – it's not saying, hey, we think the asset is impaired in a way that the cash flows aren't there, because again our CPRs are back of the model.

As far as overall valuation goes, we have a third party mark. We have KPMG. And then, now - we have our internal valuation and then we have an external data point now with the sale which basically says, hey, we monetized this asset for five basis points more than our current book value.

So, I think all those things would suggest that the value of our MSR is consistent with the book vale that we're reflecting.

Jessica Ribner - FBR Capital Markets & Co

Okay. And then, one last one is, how are you guys thinking about the mini-corr segment, given CFPB commentary and all of the discussion around that now?

Jim Cutillo

Well, we don't do mini-correspondents and if you actually went out and I think looked at our website, we published our paper back in January of this year about all the requirements that we think are important for a correspondent lender to meet in order to get a warehouse line, specifically, from NattyMac.

So that paper's been out since January. And I think if you read that and then you compared that to the CFPB guidance, I would suggest they might have used some of our program requirements to draft the guidance.

And so, I do think there are people that are doing, quote unquote, many correspondent business. But when you look at our program and you look at that document, it would suggest that that's not a segment of the market that we've been looking at.

Jessica Ribner - FBR Capital Markets & Co

Okay. Thank you.

Operator

Your next question comes from the line of Henry Coffey of Sterne Agee.

Henry Coffey - Sterne Agee

Good morning, that does raise an interesting question. I thought you have four segmented channels and two correspondent channels. The smaller correspondents you're working with, it's not a, quote, mini-correspondent channel? That's different than what the CFPB has been complaining about?

Jim Cutillo

I look at and say, the CFPBs guidance is really aimed at the wholesale channel where you're taking a broker and in essence doing what’s called a table-funded loan, where they're not really operating as a lender. And so the definition of a lender is, they're taking risks, they're taking some credit risk, they’re facilitating the transaction, they’re doing their own fulfillment services in closing the loan, they’re requesting funds.

And so when you look at our program guidance that we published in January, you have to do a lot of work in order to be a correspondent and deliver as a correspondent to NattyMac.

So, out of all the customers we have, most or all of them actually have multiple warehouse lines which is smart for our correspondent. So, we’re not captive, they can sell away, in fact in the last quarter, we bought 70% of the loans that were funded and the correspondent sold 30% away to other investors.

So, NattyMac was running as an independent warehouse bank when we bought it from Guggenheim in 2012. We really never changed the operating model. So, they've done business with some of the largest companies in the country and had billion dollar warehouse lines with those originators during the crisis.

So, I think what's happened always is that the CFPB caught on that there's some company's out there, that are offering their own funding to these, quote unquote, brokers that are in essence that now operating as many correspondent. And you’d have to look at that and say, yeah, that’s not the intent of correspondent lending.

Henry Coffey - Sterne Agee

So, there are some issues of serious substance between your small correspondent, that's helpful. As you look at the fair value marks you're taking on your MSRs and the disconnect between that and what your accountants are telling you, is there a process by which those two could be reconciled? You're realizing greater value and greater performance, and you've seen this problem for some time. And then, they have these models that don't match market data; they don't match performance data; but they seem to dominate the equation for some reason.

Jim Cutillo

Well, I think, like I said we have three independent marks - three marks, an internal mark, an external mark with a large valuation firm and then KPMG, who is our auditor, they do their own cast of the value. And then now we have this sale to a third party, right, which I would say is probably the most representative of the fair market value of these assets.

Were governed by all of those data sources. So the valuation has to be in a box tight enough that none of those are, we're not outside the box where somebody is saying, why like this? I think the confusion in the market is, you can't just look at somebody else's MSR valuation, and say, well, theirs is lower than Stonegate unless you dig into all the portfolio characteristics, which include the type of product Ginnie Mae versus Fannie Mae, the age, the weighted average coupon and quite frankly valuations are done even at a state level.

So, if you have a geographic concentration in the southeast or Texas, escrow values are different in those states, and those are input into the model and so, it's, there are so many different inputs to go into it.

There's not all things created equal MSR value. So, you can’t just look across the headlines and figure it out. You've got to go in and do almost forensic level, asset level valuation, which is what we do every quarter to kind of validate the value.

Henry Coffey - Sterne Agee

On the proposed sale of your servicing, is that to a financial buyer? Or, is that just to another financial institution that's interested in mining your customer base?

Jim Cutillo

It's a financial institution.

Henry Coffey - Sterne Agee

So, there's no opportunity with that particular transaction for sub-servicing, but are there other opportunities where you would be originating and pooling servicing, selling it to a third party investor who is going to continue to rely on you as the primary servicer, or even just selling a servicing strip, in addition to the financing [range] (ph)?

Jim Cutillo

Yeah, absolutely. We're looking at all those and again being very opportunistic in how we’re looking at those. And the fact that we now have this financing facilities in place, the $100 million and the Ginnie Mae one we're working on, that gives us time to be patient, puts us in a position where we don’t have to go raise additional capital whether it’s debt or equity.

And to your point then we're also looking at sale of the asset in a way that we end up retaining the sub-servicing, we’re going out and talking to strategic buyers of MSRs and raising our hand and saying, listen, we're primary servicer, we have a very scalable platform, we don’t have all the regulatory issues related to special servicing and default, we have a very low claims rate, low or non-existing claims rate on the CFPB website.

So, we think we’re an excellent sub-servicer. And as a non-bank we’re talking to a lot of banks who are interested in selling servicing and some capacity as well. So, we're very strategic in how we’re looking at this. And how we’re scaling it but we think there’s a lot of opportunity there, what I would call capitalized.

So, that's not going to use capital but that will provide scale in additional recurring fee income on the sub-servicing side.

Henry Coffey - Sterne Agee

And that's obviously all -- I'll agree with you -- a big step forward for the business. The other thing we were looking at is in your [indiscernible] you show economics by channel. It's more illustrative. Could you give us a sense of what gain on sale looked like in each of your three or four respective channels?

Jim Cutillo

Yeah, we’re not breaking that out. We have broken that out but I can tell that all the channels have improved and that's because again, we’re not given margin up to, just that we can, hey, we did more originations, I think people in this industry use originations for whatever reason or some gauge of success. And I just don’t think it’s a good financial metric, you could do a lot of origination not make any money.

Henry Coffey - Sterne Agee

I've seen that happen before. Congratulations on your discipline and also good quarter. Thank you.

Jim Cutillo

Thank you.

Operator

Your next question comes from the line of Jeremy Campbell of Barclays.

Jeremy Campbell – Barclays

Good morning everybody.

Jim Cutillo

Hey, Jeremy.

Jeremy Campbell – Barclays

I just wanted to piggyback on the gain on sale question. So, are you seeing strength intra-channel in July and into this upcoming quarter?

Jim Cutillo

Yeah, absolutely. If you look at the peer groups or you look at the industry as a whole, I think you’ll see people grew origination in Q2, maybe grew locks as well, but they had a decrease in gain on sale margins. We grew locks and had an increase on sale margins and an increase in our derivative pipeline asset which would suggest that the locks are even more valuable which is really a setup for Q3, right.

So, we’re just not, we’re not giving in on the margin and we’re still growing. And again it’s part of our strategy and we believe that the small-to-mid size originator, again, I’ve been saying this since October when we were on the roadshow.

We believe that it’s more about the tools and technologies, helping to manage risk, providing liquidity and now that the market is turning to purchase and we’re getting into markets whether it's non-agency opportunity, we're seeing all the work that we’ve done in non-agency in the last few years really starting to pay off and you can see that in our lock volume growth in that product as well.

Jeremy Campbell – Barclays

Okay. And then, just wondering if you guys could talk a little bit about your M&A pipeline on the retail side right now? And maybe what you're looking as far as brick and mortar versus call centers and what you’re doing there?

Jim Cutillo

Yeah, we’re looking at both, we got a lot opportunity, we're being very selective, we’re getting more strategic and looking at specific MSAs where we believe our product mix is going to be a big driver of it. We’re making sure that we’re not cannibalizing our TPO network, meaning we're not trying -- if we have great market share a the market, TPO, it would be foolish for us to walk into that market and say, hey, we're going to open a retail franchise and go after it, we’d just be taking money out of one side and putting it in the other.

Good news is, we have a lot of white space to go in the contiguous space and so we’re just being very strategic and thoughtful in how we do it. And I think, the two acquisitions that we made with Nationstar and Crossline, you can see the results.

And so we think there’s a lot of upside in that retail group from Nationstar and you can see kind of what we're doing with Crossline on the call center. And I think with the programs that we're getting ready to roll on the call center side, you’ll see the velocity of our direct to consumer business pick up substantially.

Jeremy Campbell – Barclays

Got it. Thanks guys.

Operator

Your next question comes from the line of Ken Bruce of Bank of America, Merrill Lynch.

Ken Bruce - BofA Merrill Lynch

Hi, thank you. Good morning. You've addressed many of the primary questions, but maybe I'll try to tease out a little bit more here on a couple of different items. Just in terms of the gain on sale, if I understand what you're saying, you've seen a general improvement in gain on sale across segments, and that's despite the fact that primary and secondary spreads are stable. Can you point to any one factor that's maybe driving that? Is it just improved servicing valuations? Or, is there something else that maybe is underlying that strength?

Jim Cutillo

Our servicing valuations, if anything, have ticked down. So, it’s not - it’s cash. You can see the cash if you go to the appendix in the back so I would just suggest bigger margins. And we were cash positive this year or this quarter and last quarter we weren’t.

So, it's channel mix, products strategy, more government business, non-agency business. And so again we're not chasing origination and in the markets that we’re entering we're being very strategic and thoughtful about the products we are going after, how we are pricing the product, and we’re focused on the net cost to originate.

So, also, because we’re getting scale, its one thing to get scale and volume, the next thing is you got to drive your operating expenses down. So, we put a big dent in that this quarter, and we expect to be able to do that again.

Now it’s interesting because we did that and we increased retail and wholesale which were higher expense channels. If you really think about that, we actually did – we made a bigger move in expenses than we would have, had we had the channel mix just flat. Does that make sense?

Ken Bruce - BofA Merrill Lynch

Yes. That's an important point to make. So, thank you for calling that out. And I guess, would you characterize the market any less competitive? Or, do you think that this is really just purely Stonegate initiatives that are ultimately benefiting the margins? So, that's more of just a company-specific issue versus, say, something that you're just seeing in the broader market?

Jim Cutillo

Well I think we’re going to take credit for it. I think it’s exactly what we outlined in our strategies when we’re on the road in October. And we knew it is couple quarters out of the gate to get there, and now you’ll start to see the benefit.

You’ve seen the benefit of the scale, driving operating expenses down. You’ve seen the benefit of the shift in retail and wholesale, you’ve seen the benefit of - and I think you are one of the big, you asked this question about it when we are on the roadshow.

You’ve seen the benefit of NattyMac driving more wallet share. And we used the conservative number then and I think we’re seeing better adoption and better wallet share there from those customers. And it's really because we've integrated a lot of this, best in processes for them and we’re making it more efficient.

Ken Bruce - BofA Merrill Lynch

Right. And that's certainly bearing fruit. I guess, maybe, nice segue to another issue. It seems this is somewhat semantics, but it feels like maybe the CFPB is calling what we might traditionally think of as wholesale as this mini-correspondent area that they are so concerned about? Is that correct? Because obviously your discussions in prior quarters have talked about mini-correspondents more in the traditional sense of somebody who's actually closing and funding their own loans, versus what seems to be this nebulous other area.

Jim Cutillo

Yeah. Look, we use that term because we didn’t realize that it meant something different to the CFPB. Now they came out and they are like, okay, well, what we're talking about is, mini-correspondents have broker disguised as a correspondent because if you look at our program guidance that we put out back in January, it's absolutely clear in that guidance. And in fact, we joked and said, hey, maybe they wrote the guidance based on our program roadshow, because they probably have it.

At the end of the day, our correspondents that we do business with, we use the term many, because they are on the smaller side. We wanted to make sure that people understood. We were doing AOT and mandatory and bulk, large correspondence, who are selling on a price only basis.

Right, so its like, there is 215,000 in network to 2.5 million, which is where our correspondents, in most spaces the majority of them they have multiple warehouse lines. So these guys were already doing warehouse lending with other warehouse banks but we provide them with the integrated solution and now they see that as a benefit.

Right, it's not like we went out and signed up people, and this is what the CFPB were seeing. They are seeing people going out and signing up companies that had actually, that were brokers and that's the only warehouse line. And the warehouse line if they're getting, is not really even a bona fide warehouse line, it's not even a separate business in some cases. So, it's disguise as table-funding.

Ken Bruce - BofA Merrill Lynch

Got it. Okay. Thank you for clarifying that. And maybe just lastly, this sub-servicing opportunity seems interesting from a number of perspectives. Is this something that you believe that you can develop here in the near term? Or, is that something that you were really just looking at down the road as you're looking to optimize around your servicing platform more generally?

Jim Cutillo

Yeah, it's a now opportunity right, and what I mean by that is, we’ve been spending well how many years now building our distribution network, right our origination platform. And we had focused - we have a channel focus or a group within our third-party channels focused on financial institutions, so banks.

Right, and so we have 300-plus banks small-to-mid-size regional banks, community banks, credit unions - who we do business with. And so, those banks are in a position now where they're saying, hey, we need somebody to take our servicing, well they don’t want to go to another bank, they don’t want to sell their servicing to another bank.

And so we are the logical buyer and so we can create a great transaction for them. We buy their MSRs, or they retain them, and then we become the sub-servicer. So that’s kind of what we’re seeing as an opportunity and we look at it as a product and so we're creating a product for our team down to go out and sell to banks.

Here, this is the products Stonegate offers as it relates to sub-servicing for your MSRs. Does that makes sense?

Ken Bruce - BofA Merrill Lynch

It does. Okay. Well, thank you. I appreciate your comments. And congratulations on what looked to be a very good quarter, and sounds like there's a lot of momentum in your business. So, congratulations.

Operator

Your next question comes from the line of Kevin Barker of Compass Point.

Kevin Barker - Compass Point

Most of my questions have been answered, but just a quick question on the correspondent channel. It seemed like your market share declined slightly quarter-over-quarter, as measured by the MBA. Was there a conscious effort to pull back a little bit, just because pricing was so aggressive this quarter? Or, is there something else there?

Jim Cutillo

We didn't chase the market. There are people that chased it and you can see it in the gain on sale margins going down. So we’re just – I know that it sounds crazy but we're not going to measure our success based on our origination volume. We’re going to measure it on how we deploy the capital and putting it into the highest and best used.

And so there is a topline where we’re like - we're not paying that for that asset. So the most sensitive part of our business is that delegated correspondent who is selling to tier ones like Wells and Chase, who did manage to grow their origination volume because they took it on margin.

And even other large non-banks and so we're not in a hurry, and we’re continuing to build our retail, our wholesale, our prior-approved, our NattyMac platform and getting the scale. So, we just don't feel like it's a dog we need to chase.

Kevin Barker - Compass Point

Thank you.

Operator

Your next question comes from the line of Jim Fowler of Harvest Capital.

Jim Fowler - Harvest Capital Strategies

Thanks Jim, for taking the question. So, a couple of details, if I might? On slide 24, where you have the 170 employees, 120-day plus, at 3.9, when we see the third quarter slide, will all of the Nationstar additions be in that 120-day plus? That number should be a lot closer to 270, 260 to 270, somewhere in there?

Jim Cutillo

We'll have to dig into that. I don't have that data right in front of me. I see where you're going with it directionally. So, yes, I can see where you're moving toward. I don’t want to say all, so I need to go back, we’ll do some math.

Jim Fowler - Harvest Capital Strategies

Okay. But the lion's share should be, because you brought those folks on in the last quarter and we've got another 90 days forward. So, the majority of those folks should be in there, right?

Jim Cutillo

Right.

Jim Fowler - Harvest Capital Strategies

Okay. And if I look at the July locks that you're reporting, assuming that all of the mortgage advisers are in those locks, applications per day, units per day per employee, is that still trending at 3.9, a little more, a little less? Is that still a good number to think about? In the July locks, is that still approximately 3.9?

Jim Cutillo

Yeah, it's probably flat or maybe going up. And the reason is the call center business is going to start to add to this as well.

So, with Crossline, we're going to probably start breaking out distributed versus call center, because the call center economics are even more favorable in distributed retail.

So we’re going to continue and Jim you know, we're pretty transparent. We’re going to continue to get as detailed - as transparent as we can give as much information.

I think the data that you have out there now is consistent though, with where the business is driving today.

Jim Fowler - Harvest Capital Strategies

Well, I'm going to ask you what I'm sure you will consider a dopey question on distributed versus call center, right after this next one. You said refi volume up 43% over 1Q 2014. Could you give me either of those two numbers in dollars? How much refi volume you did in the second quarter, for example?

Jim Cutillo

Yeah, we're not going to have that right here at top of our hands, we'll have to get that out.

Jim Fowler - Harvest Capital Strategies

Okay. So, here's the distributed versus call center question. So, what I want to ask, is the --? I'll ask the first question, then I'll detail. So, you sold mortgage servicing rights without sub-serve --? I guess I was a little --. And you characterize it as older servicing, which would seem to me to be a relatively fertile opportunity for call center-based refinancing, given where rates have gone.

Now, I don't know where you had that marked at [March 31] (ph). I'd like to know, just given the market March 31 versus the May 31. But more so, what I'd like to know, if the call center right party contact refinancing is your lowest cost to originate? And it should be the best future performing servicing that you have, given that you get a chance to re-underwrite all of that? Why would you sell it? Why --?

Jim Cutillo

I don't agree with you. The WAC was 399, if there is not HARP in it, it's all - older is relative to us, right. So, it's 13 months old versus nine months old. Don’t look at it as 2009, 2010 vintage. Old to us is relatively new in most people right.

So we went through there and looked at it and said, even on a good day, if rates went to 375, there isn’t much here that is going to turn over. And a lot of that was purchase driven, because we have never really been a big refi shop. And they're not moving anywhere.

So there is really no – if you look at, and again just way too much data but if you look at strategically the geographic footprint and everything that we sold, the average load amount significantly lower as well.

So, we looked at it and said rates would have to go back to three in a quarter for this to present any real economic opportunity. And I don’t think there is anybody, I mean some people believe the rates are going to go back with three in a quarter, we’re not as bullish on that, we think rates are going to continue to go forward.

So we waited often said, hey, we’re going to get an 8% return if we hold this asset forever. If we sell and reinvest it in new assets, we can probably get 20%, 22% return based on the current net cost to originate.

And then to your point, I have a higher WAC of the 450 WAC, and then if rates go to four, I'm going to refinance that to your point.

Jim Fowler - Harvest Capital Strategies

Got it. I guess I just --. Perfect explanation. Thanks for that. I thought it might have been a little older. So, the percentage of the HARP business you're still doing then is --?

Jim Cutillo

No, we don’t do any HARP business, that’s my point. I mean, so everything, - we’re not out buying distressed servicing and HARP and MOD. That's just not our business, it’s never been our business.

So this is newly originated product and that's really the sub-servicing we’re looking for too. We’re not looking to add anything other than newly originated servicing to our servicing portfolio.

Jim Fowler - Harvest Capital Strategies

Got it. Okay. All very helpful. Thanks, Jim.

Jim Cutillo

Thanks.

Operator

Your next question comes from the line of Christopher Testa of Sidoti & Company.

Christopher Testa - Sidoti & Company

Thanks for taking my question. Just with regards to the MSR sales, what's the regulatory burden around that? Do you need approval from all the GSEs before those could be sold?

Jim Cutillo

It’s a small number of loans. The threshold they have set is about 25,000 if you talk to GSEs. So, it's below that number and if not, it’s not default, it’s not special, it’s pristine highly performing servicing, and the buyer is way more than qualified as a buyer.

So they are not as – if it’s below 25,000, it doesn't really go the FHFA level. And so, it’s a pretty easy transaction.

Christopher Testa - Sidoti & Company

Okay. Great. And how much of your current-owned UPB do you think you would want to sell or is eligible for sale you have investor interest in?

Jim Cutillo

Well, I'll tell you what, if you can get five plus basis points that - market capital on it everything we do, or even higher than that in some cases, again we’re looking at strategic opportunities if we have a higher and better use of the capital, we’ll pull the trigger on it.

Christopher Testa - Sidoti & Company

And with regards to the opportunities in the sub-servicing that you guys get into with the smaller banks, what do you think the addressable market is for that in the geographies that you're looking at?

Jim Cutillo

I wouldn't put UPB on it, I would say that the small-to-mid-size banks because the tier one capital requirements, and things like that right now, they need to get out of the MSR assets and into something a little bit more liquid.

So, it could be $20 billion opportunity, it could be a $200 billion opportunity, but again, for us it’s more opportunistic and strategic. And in some cases, these banks we’re talking to are also potential providers at MSR financing.

So, it’s a strategic relationship with more than just a trade associated within many cases.

Christopher Testa - Sidoti & Company

Do your views on that change at all if the smaller banks are exempted from some of the MSR capital requirements?

Jim Cutillo

No, not at all. I think again, the banks are, - look - a bank, a small-to-mid-size bank isn’t going to have enough scale to service – servicing at a reasonable price. And so - and they don’t want to sell it to another bank because then they have this retention issue for deposits.

So, we just think we’re real logical holder of that asset. And we can help them monetize and put all things being equal they'd prefer the liquidity on it and another asset on their balance sheet.

Christopher Testa - Sidoti & Company

Okay. And with regards to the new call centers, is that a build-out of Crossline? Is that coming from new tuck-in acquisitions? Could you just give some more color on that?

Jim Cutillo

We’re just adding to the Crossline team and expanding their footprint in not only SoCal, but we have other op centers in key markets where we have operations, where we have space allocated for call center expansion.

So we're going to take that team and that management team and allow them to drive it for us on a more national basis.

Christopher Testa - Sidoti & Company

And for the special purpose entity that you guys mentioned for the non-agency assets, could you just give us more color on the structure of that and what it will be doing? And will we be seeing that broken out separately in the Q?

Jim Cutillo

It’s not going to do anything until we decide to do a securitization. So, we're big fans, we're getting ready. And so right now, the whole loan bids, I think we have about 11 investors who are selling assets to. Those whole loan bids are very attractive.

So, securitization is inferior or execution, we don’t believe that’s going to be the case forever. We're working with the rating agencies to get our origination platform rated. And we’re going to do a back exec every day to make sure that we have the right, the best execution possible.

So, the team that we have, that's led by Eric Scholtz, they’re very experienced in the securitization space. And so it’s more of a be-ready because you can’t just wake up one day and say we were going to do a securitization.

So, we think somewhere hopefully inside the next 12 months, there will be market opportunity to do that. And we’re going to have the volume to do it because if you look at the, the other side of it is, you got to have enough volume to do it.

So, our locks per day are picking up so we have the trajectory and we’re putting in place all the mechanics to be in a position to do it.

Christopher Testa - Sidoti & Company

Great. Thanks for taking my question Jim. I appreciate it.

Jim Cutillo

Thank you.

Operator

(Operator Instructions) There are no further questions at this time. I will now turn the call to Michael McFadden, for any additional or closing remark.

Michael McFadden

Thank you, Lori. As stated earlier, a replay of today's call will be available on the Investor Relations website today. Members of the media with additional questions can contact Whit Clay at 212-446-1864 and analysts and investors can contact myself at 317-663-5904.

Thanks again to everyone for joining us today.

Operator

Thank you for participating in the Stonegate Mortgage Corporation second quarter 2014 earnings results conference call. You may now disconnect.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Stonegate Mortgage's (SGM) CEO Jim Cutillo on Q2 2014 Results - Earnings Call Transcript

Check out Seeking Alpha’s new Earnings Center »

This Transcript
All Transcripts