Mr. Cooper Group Reports Second Quarter 2025 Results
-
Reported net income of
including other mark-to-market of$198 million , equivalent to ROCE of$30 million 15.9% and operating ROTCE of17.2% -
Servicing portfolio grew
25% y/y to$1,509 billion -
Subsequent to quarter-end, launched MSR Fund with initial
commitment$200 million -
Recognized by Great Place to Work as one of the Best Workplaces in
Texas
Chairman and CEO Jay Bray commented, “This was another strong quarter, marked by consistent, recurring, and predictable performance, along with higher returns. Our Company is firing on all cylinders and gaining momentum as we move closer to joining forces with Rocket.”
President Mike Weinbach added, “I’m incredibly proud of our team’s continued excellence in servicing and strong execution in originations. Our robust operations and technology continue to drive efficiencies, deliver exceptional service to customers, and attract new clients. We see compelling opportunities to expand our customer base, and our focus on cost leadership, fee-based revenue growth, and scaling our originations platform positions us to deliver strong, sustainable returns.”
Servicing
The Servicing segment provides a best-in-class home loan experience for our 6.4 million customers while simultaneously strengthening asset performance for investors. In the second quarter, Servicing recorded pretax income of
|
Quarter Ended |
||||||||||||
($ in millions) |
Q2'25 |
|
Q1'25 |
||||||||||
|
$ |
|
BPS |
|
$ |
|
BPS |
||||||
Operational revenue |
$ |
681 |
|
|
18.1 |
|
|
$ |
707 |
|
|
18.5 |
|
Amortization, net of accretion |
|
(278 |
) |
|
(7.4 |
) |
|
|
(223 |
) |
|
(5.8 |
) |
Mark-to-market |
|
31 |
|
|
0.8 |
|
|
|
(81 |
) |
|
(2.1 |
) |
Total revenues |
|
434 |
|
|
11.5 |
|
|
|
403 |
|
|
10.6 |
|
Total expenses |
|
(148 |
) |
|
(4.0 |
) |
|
|
(240 |
) |
|
(6.3 |
) |
Total other income, net |
|
78 |
|
|
2.1 |
|
|
|
51 |
|
|
1.3 |
|
Income before taxes |
|
364 |
|
|
9.6 |
|
|
|
214 |
|
|
5.6 |
|
Other mark-to-market |
|
(30 |
) |
|
(0.8 |
) |
|
|
82 |
|
|
2.1 |
|
Accounting items |
|
(8 |
) |
|
(0.2 |
) |
|
|
26 |
|
|
0.7 |
|
Intangible amortization |
|
6 |
|
|
0.2 |
|
|
|
10 |
|
|
0.3 |
|
Pretax operating income excluding other mark-to-market and accounting
|
$ |
332 |
|
|
8.8 |
|
|
$ |
332 |
|
|
8.7 |
|
|
Quarter Ended |
||||||
|
Q2'25 |
|
Q1'25 |
||||
MSRs UPB ($B) |
$ |
731 |
|
|
$ |
734 |
|
Subservicing and Other UPB ($B) |
|
778 |
|
|
|
780 |
|
Ending UPB ($B) |
$ |
1,509 |
|
|
$ |
1,514 |
|
Average UPB ($B) |
$ |
1,510 |
|
|
$ |
1,531 |
|
60+ day delinquency rate at period end |
|
1.4 |
% |
|
|
1.5 |
% |
Annualized CPR |
|
7.0 |
% |
|
|
5.0 |
% |
Modifications and workouts |
|
31,966 |
|
|
|
35,250 |
|
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
The Company funded 33,051 loans in the second quarter, totaling approximately
|
Quarter Ended |
||||||
($ in millions) |
Q2'25 |
|
Q1'25 |
||||
Income before taxes |
$ |
64 |
|
$ |
45 |
||
Accounting items |
|
— |
|
|
8 |
||
Pretax operating income excluding accounting items and other |
$ |
64 |
|
$ |
53 |
|
Quarter Ended |
||||||
($ in millions) |
Q2'25 |
|
Q1'25 |
||||
Total pull through adjusted volume |
$ |
9,733 |
|
|
$ |
8,842 |
|
Funded volume |
$ |
9,443 |
|
|
$ |
8,319 |
|
Refinance recapture percentage |
|
47 |
% |
|
|
51 |
% |
Recapture percentage |
|
17 |
% |
|
|
19 |
% |
Purchase volume as a percentage of funded volume |
|
70 |
% |
|
|
72 |
% |
Conference Call Webcast and Investor Presentation
The Company will release its second quarter 2025 financial results on July 23, 2025 at 7:00 A.M. Eastern Time. The press release, investor presentation, and a recording of prepared remarks will be available under the investors section on Mr. Cooper Group’s website, 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
|
|
Three Months Ended
|
||||
Revenues: |
|
|
|
||||
Service related, net |
$ |
472 |
|
|
$ |
440 |
|
Net gain on mortgage loans held for sale |
|
136 |
|
|
|
120 |
|
Total revenues |
|
608 |
|
|
|
560 |
|
Total expenses: |
|
330 |
|
|
|
430 |
|
Other (expense) income, net: |
|
|
|
||||
Interest income |
|
217 |
|
|
|
189 |
|
Interest expense |
|
(217 |
) |
|
|
(213 |
) |
Other expense, net |
|
(1 |
) |
|
|
(11 |
) |
Total other expense, net |
|
(1 |
) |
|
|
(35 |
) |
Income before income tax expense |
|
277 |
|
|
|
95 |
|
Income tax expense |
|
79 |
|
|
|
7 |
|
Net income |
$ |
198 |
|
|
$ |
88 |
|
|
|
|
|
||||
Earnings per share: |
|
|
|
||||
Basic |
$ |
3.09 |
|
|
$ |
1.38 |
|
Diluted |
$ |
3.04 |
|
|
$ |
1.35 |
|
Weighted average shares of common stock outstanding (in millions): |
|
|
|
||||
Basic |
|
64.0 |
|
|
|
63.7 |
|
Diluted |
|
65.1 |
|
|
|
65.0 |
|
MR. COOPER GROUP INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (millions of dollars) |
|||||||
|
|||||||
|
June 30, 2025 |
|
March 31, 2025 |
||||
Assets |
|
|
|
||||
Cash and cash equivalents |
$ |
783 |
|
$ |
784 |
||
Restricted cash |
|
168 |
|
|
166 |
||
Mortgage servicing rights at fair value |
|
11,431 |
|
|
11,345 |
||
Advances and other receivables, net |
|
1,124 |
|
|
1,061 |
||
Mortgage loans held for sale at fair value |
|
2,475 |
|
|
2,603 |
||
Property and equipment, net |
|
72 |
|
|
63 |
||
Deferred tax assets, net |
|
149 |
|
|
217 |
||
Other assets |
|
2,297 |
|
|
2,207 |
||
Total assets |
$ |
18,499 |
|
$ |
18,446 |
||
|
|
|
|
||||
Liabilities and Stockholders' Equity |
|
|
|
||||
Unsecured senior notes, net |
$ |
4,902 |
|
$ |
4,896 |
||
Advance, warehouse and MSR facilities, net |
|
6,161 |
|
|
6,313 |
||
Payables and other liabilities |
|
1,956 |
|
|
1,949 |
||
MSR related liabilities - nonrecourse at fair value |
|
381 |
|
|
398 |
||
Total liabilities |
|
13,400 |
|
|
13,556 |
||
Total stockholders' equity |
|
5,099 |
|
|
4,890 |
||
Total liabilities and stockholders' equity |
$ |
18,499 |
|
$ |
18,446 |
UNAUDITED SEGMENT STATEMENT OF OPERATIONS & EARNINGS RECONCILIATION (millions of dollars, except for earnings per share data) |
|||||||||||||||
|
|||||||||||||||
|
Three Months Ended June 30, 2025 |
||||||||||||||
|
Servicing |
|
Originations |
|
Corporate/
|
|
Consolidated |
||||||||
|
|
|
|
|
|
|
|
||||||||
Service related, net |
$ |
426 |
|
|
$ |
30 |
|
|
$ |
16 |
|
|
$ |
472 |
|
Net gain on mortgage loans held for sale |
|
8 |
|
|
|
128 |
|
|
|
— |
|
|
|
136 |
|
Total revenues |
|
434 |
|
|
|
158 |
|
|
|
16 |
|
|
|
608 |
|
Total expenses |
|
148 |
|
|
|
100 |
|
|
|
82 |
|
|
|
330 |
|
Other income (expense), net: |
|
|
|
|
|
|
|
||||||||
Interest income |
|
184 |
|
|
|
33 |
|
|
|
— |
|
|
|
217 |
|
Interest expense |
|
(106 |
) |
|
|
(30 |
) |
|
|
(81 |
) |
|
|
(217 |
) |
Other expense, net |
|
— |
|
|
|
3 |
|
|
|
(4 |
) |
|
|
(1 |
) |
Total other income (expense), net |
|
78 |
|
|
|
6 |
|
|
|
(85 |
) |
|
|
(1 |
) |
Pretax income (loss) |
$ |
364 |
|
|
$ |
64 |
|
|
$ |
(151 |
) |
|
$ |
277 |
|
Income tax expense |
|
|
|
|
|
|
|
79 |
|
||||||
Net income |
|
|
|
|
|
|
$ |
198 |
|
||||||
Earnings per share |
|
|
|
|
|
|
|
||||||||
Basic |
|
|
|
|
|
|
$ |
3.09 |
|
||||||
Diluted |
|
|
|
|
|
|
$ |
3.04 |
|
||||||
|
|
|
|
|
|
|
|
||||||||
Non-GAAP Reconciliation: |
|
|
|
|
|
|
|
||||||||
Pretax income (loss) |
$ |
364 |
|
|
$ |
64 |
|
|
$ |
(151 |
) |
|
$ |
277 |
|
Other mark-to-market |
|
(30 |
) |
|
|
— |
|
|
|
— |
|
|
|
(30 |
) |
Accounting items / other |
|
(8 |
) |
|
|
— |
|
|
|
23 |
|
|
|
15 |
|
Intangible amortization |
|
6 |
|
|
|
— |
|
|
|
1 |
|
|
|
7 |
|
Pretax operating income (loss) |
$ |
332 |
|
|
$ |
64 |
|
|
$ |
(127 |
) |
|
$ |
269 |
|
Income tax expense(1) |
|
|
|
|
|
|
|
(65 |
) |
||||||
Operating income |
|
|
|
|
|
|
$ |
204 |
|
||||||
Operating ROTCE(2) |
|
|
|
|
|
|
|
17.2 |
% |
||||||
Average tangible book value (TBV)(3) |
|
|
|
|
|
|
$ |
4,749 |
|
(1) |
Assumes tax-rate of |
(2) | Computed by dividing annualized earnings by average TBV. |
(3) |
Average of beginning TBV of |
UNAUDITED SEGMENT STATEMENT OF OPERATIONS & EARNINGS RECONCILIATION (millions of dollars, except for earnings per share data) |
|||||||||||||||
|
|||||||||||||||
|
Three Months Ended March 31, 2025 |
||||||||||||||
|
Servicing |
|
Originations |
|
Corporate/
|
|
Consolidated |
||||||||
|
|
|
|
|
|
|
|
||||||||
Service related, net |
$ |
397 |
|
|
$ |
26 |
|
|
$ |
17 |
|
|
$ |
440 |
|
Net gain on mortgage loans held for sale |
|
6 |
|
|
|
114 |
|
|
|
— |
|
|
|
120 |
|
Total revenues |
|
403 |
|
|
|
140 |
|
|
|
17 |
|
|
|
560 |
|
Total expenses |
|
240 |
|
|
|
95 |
|
|
|
95 |
|
|
|
430 |
|
Other income (expense), net: |
|
|
|
|
|
|
|
||||||||
Interest income |
|
157 |
|
|
|
29 |
|
|
|
3 |
|
|
|
189 |
|
Interest expense |
|
(106 |
) |
|
|
(26 |
) |
|
|
(81 |
) |
|
|
(213 |
) |
Other expense, net |
|
— |
|
|
|
(3 |
) |
|
|
(8 |
) |
|
|
(11 |
) |
Total other income (expense), net |
|
51 |
|
|
|
— |
|
|
|
(86 |
) |
|
|
(35 |
) |
Pretax income (loss) |
$ |
214 |
|
|
$ |
45 |
|
|
$ |
(164 |
) |
|
$ |
95 |
|
Income tax expense |
|
|
|
|
|
|
|
7 |
|
||||||
Net income |
|
|
|
|
|
|
$ |
88 |
|
||||||
Earnings per share |
|
|
|
|
|
|
|
||||||||
Basic |
|
|
|
|
|
|
$ |
1.38 |
|
||||||
Diluted |
|
|
|
|
|
|
$ |
1.35 |
|
||||||
|
|
|
|
|
|
|
|
||||||||
Non-GAAP Reconciliation: |
|
|
|
|
|
|
|
||||||||
Pretax income (loss) |
$ |
214 |
|
|
$ |
45 |
|
|
$ |
(164 |
) |
|
$ |
95 |
|
Other mark-to-market |
|
82 |
|
|
|
— |
|
|
|
— |
|
|
|
82 |
|
Accounting items / other |
|
26 |
|
|
|
8 |
|
|
|
34 |
|
|
|
68 |
|
Intangible amortization |
|
10 |
|
|
|
— |
|
|
|
— |
|
|
|
10 |
|
Pretax operating income (loss) |
$ |
332 |
|
|
$ |
53 |
|
|
$ |
(130 |
) |
|
$ |
255 |
|
Income tax expense |
|
|
|
|
|
|
|
(62 |
) |
||||||
Operating income(1) |
|
|
|
|
|
|
$ |
193 |
|
||||||
Operating ROTCE(2) |
|
|
|
|
|
|
|
16.8 |
% |
||||||
Average tangible book value (TBV)(3) |
|
|
|
|
|
|
$ |
4,597 |
|
(1) |
Assumes tax-rate of |
(2) | Computed by dividing annualized earnings by average TBV. |
(3) |
Average of beginning TBV of |
Non-GAAP Reconciliation: |
Quarter Ended |
||||||
($ in millions except value per share data) |
Q2'25 |
|
Q1'25 |
||||
Stockholders' equity (BV) |
$ |
5,099 |
|
|
$ |
4,890 |
|
Goodwill |
|
(141 |
) |
|
|
(141 |
) |
Intangible assets |
|
(101 |
) |
|
|
(108 |
) |
Tangible book value (TBV) |
$ |
4,857 |
|
|
$ |
4,641 |
|
Ending shares of common stock outstanding (in millions) |
|
64.0 |
|
|
|
64.0 |
|
|
|
|
|
||||
BV/share |
$ |
79.68 |
|
|
$ |
76.43 |
|
TBV/share |
$ |
75.90 |
|
|
$ |
72.53 |
|
|
|
|
|
||||
Net income |
$ |
198 |
|
|
$ |
88 |
|
ROCE(1) |
|
15.9 |
% |
|
|
7.3 |
% |
|
|
|
|
||||
Beginning stockholders’ equity |
$ |
4,890 |
|
|
$ |
4,813 |
|
Ending stockholders’ equity |
$ |
5,099 |
|
|
$ |
4,890 |
|
Average stockholders’ equity (BV) |
$ |
4,995 |
|
|
$ |
4,852 |
(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/20250723979574/en/
Investor Contact:
Kenneth Posner, SVP Strategic Planning and Investor Relations
Shareholders@mrcooper.com
Media Contact:
Christen Reyenga, VP Corporate Communications
MediaRelations@mrcooper.com
Source: Mr. Cooper Group Inc.