COOP Mr Cooper Group Inc

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549 

 

 

FORM 8-K 

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

February 12, 2025

Date of report

 

 

Mr. Cooper Group Inc.

(Exact Name of Registrant as Specified in Charter) 

 

 

Delaware		001-14667		91-1653725
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

 

8950 Cypress Waters Blvd.

Coppell, TX 75019

(Address of Principal Executive Offices, and Zip Code)

 

469.549.2000

Registrant’s Telephone Number, Including Area Code

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐

Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐

Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐

Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	COOP	The Nasdaq Stock Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

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. ☐

 

 

Item 2.02

Results of Operations and Financial Condition.

 

On February 12, 2025, Mr. Cooper Group Inc. (the “Company”) issued a press release announcing its financial results for the fourth quarter and for its full fiscal year ended December 31, 2024. A copy of the press release is attached as Exhibit 99.1 and will be published in the Investors section on the Company’s website at www.mrcoopergroup.com. In connection with the release and the related conference call, the Company posted a presentation relating to its fourth quarter and for its full fiscal year ended December 31, 2024 financial results in the Investors section on the Company’s website.

 

The press release and presentation include certain non-generally accepted accounting principles financial measures. Reconciliations to the most directly comparable generally accepted accounting principles financial measures are included in the press release and the presentation.

 

The information furnished pursuant to this Item 2.02 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

Item 9.01

Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit Number		Exhibit
99.1		Press release of Mr. Cooper Group Inc., dated February 12, 2025

 

 

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 hereunto duly authorized.

 

	Mr. Cooper Group Inc.
Date:  February 12, 2025	By:	/s/ Kurt Johnson
		Kurt Johnson Executive Vice President & Chief Financial Officer

 

 

 

Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE

 

MR. COOPER GROUP REPORTS FOURTH QUARTER 2024 RESULTS

 

•

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

 

Dallas, TX (February 12, 2025) - 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.

 

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

 

 

 

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.

 

 

 

 

 

 

10

v3.25.0.1

Cover	Feb. 12, 2025
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Feb. 12, 2025
Entity File Number	001-14667
Entity Registrant Name	Mr. Cooper Group Inc.
Entity Central Index Key	0000933136
Entity Tax Identification Number	91-1653725
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	8950 Cypress Waters Blvd.
Entity Address, City or Town	Coppell
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75019
City Area Code	469
Local Phone Number	549.2000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.01 par value per share
Trading Symbol	COOP
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

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