- Reported net income of $204 million including other
mark-to-market of $92 million, equivalent to ROCE of 17.3% and
operating ROTCE of 15.8%
- Book value per share and tangible book value per share
increased to $75.70 and $71.61
- Servicing portfolio grew 57% y/y to $1,556 billion
- Repurchased 0.4 million shares of common stock for $38
million
- Completed acquisition of Flagstar’s mortgage operations
- Recognized as the top mortgage servicer by Freddie Mac,
receiving 2024 SHARP Gold Award
Mr. Cooper Group Inc. (NASDAQ: COOP) (the “Company”), reported
fourth quarter income before income tax expense of $280 and net
income of $204 million. Excluding other mark-to-market and other
adjustments, the Company reported pretax operating income of $235
million. Adjustments included other mark-to-market net of hedges of
$92 million and other items shown below in the reconciliation of
GAAP and non-GAAP results.
Chairman and CEO Jay Bray commented, “The fourth quarter capped
off an outstanding year for Mr. Cooper, with an operating ROTCE of
15.8% and substantial portfolio growth of 57% year-over-year. We
enter 2025 with strong capital, liquidity, and an outstanding team,
energized to serve our customers, clients, and stakeholders.”
Mike Weinbach, President, added, “I’m extremely proud of our
team’s consistently strong servicing performance and agile
execution in originations. Our robust operations and technology
enabled us to successfully close the Flagstar acquisition and
welcome new customers, clients, and team members. We continue to
see exciting opportunities to grow our customer base, while our
focus on cost leadership, fee revenues, and expanding our
originations platform will help us generate strong returns.”
Servicing
The Servicing segment provides a best-in-class home loan
experience for our 6.7 million customers while simultaneously
strengthening asset performance for investors. In the fourth
quarter, Servicing recorded pretax income of $393 million,
including other mark-to-market of $92 million. The servicing
portfolio ended the quarter at $1,556 billion. Servicing generated
pretax operating income, excluding other mark-to-market, of $318
million. At quarter end, the carrying value of the MSR was $11,736
million equivalent to 159 bps of MSR UPB.
Quarter Ended
($ in millions)
Q4'24
Q3'24
$
BPS
$
BPS
Operational revenue
$
672
19.1
$
616
20.1
Amortization, net of accretion
(264
)
(7.5
)
(235
)
(7.6
)
Mark-to-market
94
2.7
(125
)
(4.1
)
Total revenues
502
14.3
256
8.4
Total expenses
(185
)
(5.3
)
(180
)
(5.9
)
Total other income, net
76
2.2
101
3.3
Income before taxes
393
11.2
177
5.8
Other mark-to-market
(92
)
(2.6
)
126
4.1
Accounting items
9
0.3
—
—
Intangible amortization
8
0.2
2
0.1
Pretax operating income
$
318
9.1
$
305
10.0
Quarter Ended
Q4'24
Q3'24
MSRs UPB ($B)
$
736
$
678
Subservicing and Other UPB ($B)
820
561
Ending UPB ($B)
$
1,556
$
1,239
Average UPB ($B)
$
1,407
$
1,225
60+ day delinquency rate at period end
1.6
%
1.5
%
Annualized CPR
7.5
%
7.1
%
Modifications and workouts
24,899
21,817
Originations
The Originations segment creates servicing assets at attractive
margins by acquiring loans through the correspondent channel and
refinancing existing loans through the direct-to-consumer channel.
Originations earned pretax income of $46 million and pretax
operating income of $47 million.
The Company funded 32,954 loans in the third quarter, totaling
approximately $9.3 billion UPB, which was comprised of $2.6 billion
in direct-to-consumer and $6.7 billion in correspondent. Funded
volume increased 36% quarter-over-quarter, while pull through
adjusted volume increased 21% quarter-over-quarter to $9.1
billion.
Quarter Ended
($ in millions)
Q4'24
Q3'24
Income before taxes
$
46
$
69
Accounting items
1
—
Pretax operating income
$
47
$
69
Quarter Ended
($ in millions)
Q4'24
Q3'24
Total pull through adjusted volume
$
9,063
$
7,491
Funded volume
$
9,290
$
6,825
Refinance recapture percentage
35
%
69
%
Recapture percentage
21
%
22
%
Purchase volume as a percentage of funded
volume
65
%
69
%
Conference Call Webcast and Investor
Presentation
The Company will host a conference call on February 12, 2025 at
10:00 A.M. Eastern Time. Preregistration for the call is now
available in the Investor section of www.mrcoopergroup.com.
Participants will receive a toll-free dial-in number and a unique
registrant ID to be used for immediate call access. A simultaneous
audio webcast of the conference call will be available under the
investors section on www.mrcoopergroup.com.
Non-GAAP Financial
Measures
The Company utilizes non-GAAP financial measures as the measures
provide additional information to assist investors in understanding
and assessing the Company’s and our business segments’ ongoing
performance and financial results, as well as assessing our
prospects for future performance. The adjusted operating financial
measures facilitate a meaningful analysis and allow more accurate
comparisons of our ongoing business operations because they exclude
items that may not be indicative of or are unrelated to the
Company’s and our business segments’ core operating performance,
and are better measures for assessing trends in our underlying
businesses. These notable items are consistent with how management
views our businesses. Management uses these non-GAAP financial
measures in making financial, operational and planning decisions
and evaluating the Company’s and our business segment’s ongoing
performance. Pretax operating income (loss) in the servicing
segment eliminates the effects of mark-to-market adjustments which
primarily reflects unrealized gains or losses based on the changes
in fair value measurements of MSRs and their related financing
liabilities for which a fair value accounting election was made.
These adjustments, which can be highly volatile and material due to
changes in credit markets, are not necessarily reflective of the
gains and losses that will ultimately be realized by the Company.
Pretax operating income (loss) in each segment also eliminates, as
applicable, transition and integration costs, gains (losses) on
sales of fixed assets, certain settlement costs that are not
considered normal operational matters, intangible amortization,
change in equity method investments, fair value change in equity
investments and other adjustments based on the facts and
circumstances that would provide investors a supplemental means for
evaluating the Company’s core operating performance. Return on
tangible common equity (ROTCE) is computed by dividing net income
by average tangible common equity (also known as tangible book
value). Tangible common equity equals total stockholders’ equity
less goodwill and intangible assets. Management believes that ROTCE
is a useful financial measure because it measures the performance
of a business consistently and enables investors and others to
assess the Company’s use of equity. Tangible book value is defined
as stockholders’ equity less goodwill and intangible assets. Our
management believes tangible book value is useful to investors
because it provides a more accurate measure of the realizable value
of shareholder returns, excluding the impact of goodwill and
intangible assets.
Forward-Looking
Statements
Any statements in this release that are not historical or
current facts are forward-looking statements. Forward-looking
statements involve known and unknown risks, uncertainties and other
factors that may cause our actual results, performance, or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements. Results for any specified quarter are
not necessarily indicative of the results that may be expected for
the full year or any future period. Certain of these risks and
uncertainties are described in the “Risk Factors” section of Mr.
Cooper Group’s most recent annual reports and other required
documents as filed with the SEC which are available at the SEC’s
website at http://www.sec.gov. Mr. Cooper undertakes no obligation
to publicly update or revise any forward-looking statement or any
other financial information contained herein, and the statements
made in this press release are current as of the date of this
release only.
Financial Tables
MR. COOPER GROUP INC. AND
SUBSIDIARIES
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(millions of dollars, except for
earnings per share data)
Three Months Ended December 31,
2024
Three Months Ended September 30,
2024
Revenues:
Service related, net
$
537
$
288
Net gain on mortgage loans held for
sale
117
136
Total revenues
654
424
Total expenses:
367
335
Other (expense) income, net:
Interest income
216
227
Interest expense
(220
)
(199
)
Other expense, net
(3
)
(5
)
Total other expense, net
(7
)
23
Income before income tax expense
280
112
Income tax expense
76
32
Net income
$
204
$
80
Earnings per share:
Basic
$
3.20
$
1.24
Diluted
$
3.13
$
1.22
Weighted average shares of common stock
outstanding (in millions):
Basic
63.8
64.3
Diluted
65.1
65.5
MR. COOPER GROUP INC. AND
SUBSIDIARIES
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(millions of dollars)
December 31, 2024
September 30, 2024
Assets
Cash and cash equivalents
$
753
$
733
Restricted cash
220
186
Mortgage servicing rights at fair
value
11,736
10,035
Advances and other receivables, net
1,345
940
Mortgage loans held for sale at fair
value
2,211
1,962
Property and equipment, net
58
58
Deferred tax assets, net
230
315
Other assets
2,386
1,957
Total assets
$
18,939
$
16,186
Liabilities and
Stockholders' Equity
Unsecured senior notes, net
$
4,891
$
4,885
Advance, warehouse and MSR facilities,
net
6,495
4,379
Payables and other liabilities
2,322
1,841
MSR related liabilities - nonrecourse at
fair value
418
443
Total liabilities
14,126
11,548
Total stockholders' equity
4,813
4,638
Total liabilities and stockholders'
equity
$
18,939
$
16,186
UNAUDITED SEGMENT STATEMENT
OF
OPERATIONS & EARNINGS
RECONCILIATION
(millions of dollars, except for
earnings per share data)
Three Months Ended December 31,
2024
Servicing
Originations
Corporate/ Other
Consolidated
Service related, net
$
493
$
27
$
17
$
537
Net gain on mortgage loans held for
sale
9
108
—
117
Total revenues
502
135
17
654
Total expenses
185
90
92
367
Other income (expense), net:
Interest income
184
32
—
216
Interest expense
(108
)
(31
)
(81
)
(220
)
Other expense, net
—
—
(3
)
(3
)
Total other income (expense), net
76
1
(84
)
(7
)
Pretax income (loss)
$
393
$
46
$
(159
)
$
280
Income tax expense
76
Net income
$
204
Earnings per share
Basic
$
3.20
Diluted
$
3.13
Non-GAAP Reconciliation:
Pretax income (loss)
$
393
$
46
$
(159
)
$
280
Other mark-to-market
(92
)
—
—
(92
)
Accounting items / other
9
1
29
39
Intangible amortization
8
—
—
8
Pretax operating income (loss)
$
318
$
47
$
(130
)
$
235
Income tax expense(1)
(57
)
Operating income
$
178
Operating ROTCE(2)
15.8
%
Average tangible book value (TBV)(3)
$
4,514
(1)
Assumes tax-rate of 24.2%.
(2)
Computed by dividing annualized earnings by average TBV.
(3)
Average of beginning TBV of $4,474 and ending TBV of $4,553.
UNAUDITED SEGMENT STATEMENT
OF
OPERATIONS & EARNINGS
RECONCILIATION
(millions of dollars, except for
earnings per share data)
Three Months Ended September 30,
2024
Servicing
Originations
Corporate/ Other
Consolidated
Service related, net
$
246
$
24
$
18
$
288
Net gain on mortgage loans held for
sale
10
126
—
136
Total revenues
256
150
18
424
Total expenses
180
83
72
335
Other income (expense), net:
Interest income
201
25
1
227
Interest expense
(100
)
(23
)
(76
)
(199
)
Other expense, net
—
—
(5
)
(5
)
Total other income (expense), net
101
2
(80
)
23
Pretax income (loss)
$
177
$
69
$
(134
)
$
112
Income tax expense
32
Net income
$
80
Earnings per share
Basic
$
1.24
Diluted
$
1.22
Non-GAAP Reconciliation:
Pretax income (loss)
$
177
$
69
$
(134
)
$
112
Other mark-to-market
126
—
—
126
Accounting items / other
—
—
6
6
Intangible amortization
2
—
—
2
Pretax operating income (loss)
$
305
$
69
$
(128
)
$
246
Income tax expense
(60
)
Operating income(1)
$
186
Operating ROTCE(2)
16.8
%
Average tangible book value (TBV)(3)
$
4,451
(1)
Assumes tax-rate of 24.2%.
(2)
Computed by dividing annualized earnings by average TBV.
(3)
Average of beginning TBV of $4,428 and ending TBV of $4,474.
UNAUDITED SEGMENT STATEMENT
OF
OPERATIONS & EARNINGS
RECONCILIATION
(millions of dollars, except for
earnings per share data)
Year Ended December 31, 2024
Servicing
Originations
Corporate/ Other
Consolidated
Service related, net
$
1,625
$
86
$
77
$
1,788
Net gain on mortgage loans held for
sale
39
398
—
437
Total revenues
1,664
484
77
2,225
Total expenses
721
304
294
1319
Other income (expense), net:
Interest income
705
84
1
790
Interest expense
(411
)
(79
)
(286
)
(776
)
Other expense, net
—
—
(19
)
(19
)
Total other income (expense), net
294
5
(304
)
(5
)
Pretax income (loss)
$
1237
$
185
$
(521
)
$
901
Income tax expense
232
Net income
$
669
Earnings per share
Basic
$
10.40
Diluted
$
10.19
Non-GAAP Reconciliation:
Pretax income (loss)
$
1,237
$
185
$
(521
)
$
901
Other mark-to-market
(76
)
—
—
(76
)
Accounting items / other
9
1
50
60
Intangible amortization
12
—
2
14
Pretax operating income (loss)
$
1,182
$
186
$
(469
)
$
899
Income tax expense
(218
)
Operating income(1)
$
681
Operating ROTCE(2)
15.6
%
Average tangible book value (TBV)(3)
$
4,368
(1)
Assumes tax-rate of 24.2%.
(2)
Computed by dividing annualized earnings by average TBV.
(3)
Average of quarterly TBV averages of $4,176 for 1Q’24, $4,333
for 2Q’24, $4,451 for 3Q’24, and $4,514 for 4Q’24.
Non-GAAP Reconciliation:
Quarter Ended
($ in millions except value per share
data)
Q4'24
Q3'24
Stockholders' equity (BV)
$
4,813
$
4,638
Goodwill
(141
)
(141
)
Intangible assets
(119
)
(23
)
Tangible book value (TBV)
$
4,553
$
4,474
Ending shares of common stock outstanding
(in millions)
63.6
64.0
BV/share
$
75.70
$
72.49
TBV/share
$
71.61
$
69.93
Net income
$
204
$
80
ROCE(1)
17.3
%
6.9
%
Beginning stockholders’ equity
$
4,638
$
4,594
Ending stockholders’ equity
$
4,813
$
4,638
Average stockholders’ equity (BV)
$
4,726
$
4,616
(1)
Return on Common Equity (ROCE) is computed by dividing
annualized earnings by average BV.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250212301682/en/
Investor Contact: Kenneth Posner, SVP Strategic Planning and
Investor Relations (469) 426-3633 Shareholders@mrcooper.com
Media Contact: Christen Reyenga, VP Corporate Communications
MediaRelations@mrcooper.com
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