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     110  0 Kommentare Mr. Cooper Delivers $1.4 billion GAAP Net Income and 17% Servicing Portfolio Growth for Full-year 2021

    Mr. Cooper Group Inc. (NASDAQ: COOP) (the “Company”), which principally operates under the Mr. Cooper and Xome brands, reported a fourth quarter net income of $155 million or $2.01 per diluted share. The Company reported pretax income of $231 million and pretax operating income of $156 million, which excluded mark-to-market and other items. The mark-to-market adjustment was $46 million in the quarter and other items included $34 million gain from the sale of Xome Field Services, $3 million in charges related to severance and $2 million of intangible amortization.

    Chairman and CEO Jay Bray commented, “Solid results in the fourth quarter closed out a fantastic year for Mr. Cooper, where we delivered very strong returns and portfolio growth. We enter 2022 with an extremely talented and dedicated team and a balanced business model that positions us to benefit from higher interest rates.”

    Chris Marshall, Vice Chairman, President, and CFO added, “The fourth quarter capped a year of terrific improvement in the balance sheet, with record levels of capital and liquidity, exceptional growth in tangible book value per share, and significant advancements in many of our technology initiatives. Our team is perfectly positioned to capitalize on the strong momentum we have across our business.”

    Servicing

    The Servicing segment is focused on providing a best-in-class home loan experience for our 3.6 million customers while simultaneously strengthening asset performance for investors. In the fourth quarter, Servicing recorded pretax income of $87 million, including other mark-to-market of $46 million. The forward servicing portfolio ended the quarter at $710 billion in UPB. Servicing generated pretax operating income, excluding other mark-to-market, of $41 million. At quarter end, the carrying value of the MSR was $4,223 million equivalent to 124 bps of MSR UPB

     

    Quarter Ended

    ($ in millions)

    Q3'21

     

    Q4'21

     

    $

     

    BPS

     

    $

     

    BPS

    Operational revenue

    $

    402

     

     

    24.6

     

     

    $

    390

     

     

    22.9

     

    Amortization, net of accretion

     

    (202

    )

     

    (12.4

    )

     

     

    (186

    )

     

    (10.9

    )

    Mark-to-market

     

    151

     

     

    9.3

     

     

     

    45

     

     

    2.6

     

    Total revenues

     

    351

     

     

    21.5

     

     

     

    249

     

     

    14.6

     

    Total expenses

     

    (128

    )

     

    (7.8

    )

     

     

    (143

    )

     

    (8.4

    )

    Total other expenses, net

     

    (26

    )

     

    (1.6

    )

     

     

    (19

    )

     

    (1.1

    )

    Income before taxes

     

    197

     

     

    12.1

     

     

     

    87

     

     

    5.1

     

    Other mark-to-market

     

    (153

    )

     

    (9.4

    )

     

     

    (46

    )

     

    (2.7

    )

    Accounting items

     

     

     

     

     

     

     

     

     

    Pretax operating income excluding other mark-to-market and accounting items

    $

    44

     

     

    2.7

     

     

    $

    41

     

     

    2.4

     

     

    Quarter Ended

     

    Q3'21

     

    Q4'21

    Ending UPB ($B)

    $

    668

     

     

    $

    710

     

    Average UPB ($B)

    $

    653

     

     

    $

    682

     

    60+ day delinquency rate at period end

     

    4.0

    %

     

     

    3.1

    %

    Annualized CPR

     

    24.6

    %

     

     

    21.2

    %

    Modifications and workouts

     

    28,581

     

     

     

    39,554

     

    Originations

    The Originations segment focuses on creating 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 $181 million and pretax operating income of $182 million.

    The Company funded 65,971 loans in the fourth quarter, totaling approximately $17.2 billion UPB, which was comprised of $9.0 billion in direct-to-consumer and $8.2 billion in correspondent. Funded volume decreased 14% quarter-over-quarter, while pull through adjusted volume decreased 27% quarter-over-quarter to $14.7 billion.

     

    Quarter Ended

    ($ in millions)

    Q3'21

     

    Q4'21

    Income before taxes

    $

    271

     

    $

    181

    Accounting items / other

     

    2

     

     

    1

    Pretax operating income excluding accounting items and other

    $

    273

     

    $

    182

     

    Quarter Ended

    ($ in millions)

    Q3'21

     

    Q4'21

    Total pull through adjusted volume

    $

    20,073

     

     

    $

    14,736

     

    Funded volume

    $

    19,938

     

     

    $

    17,165

     

    Refinance recapture percentage

     

    40

    %

     

     

    43

    %

    Recapture percentage

     

    30

    %

     

     

    32

    %

    Purchase volume as a percentage of funded volume

     

    31

    %

     

     

    30

    %

    Conference Call Webcast and Investor Presentation

    The Company will host a conference call on February 11, 2022 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. A telephonic replay will also be available approximately two hours after the conclusion of the conference call by dialing 855-859-2056 (toll-free), or 404-537-3406 (international). Please use the passcode 7271516 to access the replay.

    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, 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, including the severity and duration of the COVID-19 pandemic; the pandemic’s impact on the U.S. and global economies; federal, state, and local governmental responses to the pandemic; borrower forbearance rates and availability of financing. 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
    September 30, 2021

     

    Three Months Ended
    December 31, 2021

    Revenues:

     

     

     

    Service related, net

    $

    288

     

     

    $

    207

     

    Net gain on mortgage loans held for sale

     

    572

     

     

     

    418

     

    Total revenues

     

    860

     

     

     

    625

     

    Total expenses:

     

    402

     

     

     

    381

     

    Other income (expense), net:

     

     

     

    Interest income

     

    66

     

     

     

    68

     

    Interest expense

     

    (118

    )

     

     

    (115

    )

    Other income, net

     

    8

     

     

     

    34

     

    Total other expense, net

     

    (44

    )

     

     

    (13

    )

    Income before income tax expense

     

    414

     

     

     

    231

     

    Income tax expense

     

    104

     

     

     

    61

     

    Net income from continuing operations

     

    310

     

     

     

    170

     

    Net loss from discontinued operations

     

    (11

    )

     

     

    (15

    )

    Net income

     

    299

     

     

     

    155

     

    Net income attributable to non-controlling interest

     

     

     

     

     

    Net income attributable to Mr. Cooper Group

     

    299

     

     

     

    155

     

    Undistributed earnings attributable to participating stockholders

     

    1

     

     

     

     

    Premium on retirement of preferred stock

     

    28

     

     

     

     

    Net income attributable to common stockholders

    $

    270

     

     

    $

    155

     

     

     

     

     

    Earnings from continuing operations per common share attributable to Mr. Cooper:

     

     

     

    Basic

    $

    3.56

     

     

    $

    2.28

     

    Diluted

    $

    3.42

     

     

    $

    2.20

     

    Earnings from discontinued operations per common share attributable to Mr. Cooper:

     

     

     

    Basic

    $

    (0.14

    )

     

    $

    (0.20

    )

    Diluted

    $

    (0.13

    )

     

    $

    (0.19

    )

    Earnings per common share attributable to Mr. Cooper:

     

     

     

    Basic

    $

    3.42

     

     

    $

    2.08

     

    Diluted

    $

    3.29

     

     

    $

    2.01

     

    Weighted average shares of common stock outstanding (in millions):

     

     

     

    Basic

     

    78.9

     

     

     

    74.6

     

    Diluted

     

    82.1

     

     

     

    77.4

     

     

    MR. COOPER GROUP INC. AND SUBSIDIARIES

    UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

    (millions of dollars)

     

     

    September 30, 2021

     

    December 31, 2021

    Assets

     

     

     

    Cash and cash equivalents

    $

    731

     

    $

    895

    Restricted cash

     

    118

     

     

    146

    Mortgage servicing rights at fair value

     

    3,666

     

     

    4,223

    Advances and other receivables, net

     

    909

     

     

    1,228

    Mortgage loans held for sale at fair value

     

    7,939

     

     

    4,381

    Property and equipment, net

     

    103

     

     

    98

    Deferred tax assets, net

     

    1,011

     

     

    991

    Other assets

     

    3,462

     

     

    2,242

    Assets of discontinued operations

     

    3,722

     

     

    Total assets

    $

    21,661

     

    $

    14,204

     

     

     

     

    Liabilities and Stockholders' Equity

     

     

     

    Unsecured senior notes, net

    $

    2,076

     

    $

    2,670

    Advance and warehouse facilities, net

     

    8,206

     

     

    4,997

    Payables and other liabilities

     

    3,537

     

     

    2,392

    MSR related liabilities - nonrecourse at fair value

     

    842

     

     

    778

    Liabilities of discontinued operations

     

    3,740

     

     

    Total liabilities

     

    18,401

     

     

    10,837

    Total stockholders' equity

     

    3,260

     

     

    3,367

    Total liabilities and stockholders' equity

    $

    21,661

     

    $

    14,204

     

    UNAUDITED SEGMENT STATEMENT OF

    OPERATIONS & EARNINGS RECONCILIATION

    (millions of dollars, except for earnings per share data)

     

     

    Three Months Ended September 30, 2021

     

    Servicing

     

    Originations

     

    Corporate/
    Other

     

    Consolidated

     

     

     

     

     

     

     

     

    Service related, net

    $

    209

     

     

    $

    44

     

     

    $

    35

     

     

    $

    288

     

    Net gain on mortgage loans held for sale

     

    142

     

     

     

    430

     

     

     

     

     

     

    572

     

    Total revenues

     

    351

     

     

     

    474

     

     

     

    35

     

     

     

    860

     

    Total expenses

     

    128

     

     

     

    208

     

     

     

    66

     

     

     

    402

     

    Other (expense) income, net:

     

     

     

     

     

     

     

    Interest income

     

    39

     

     

     

    27

     

     

     

     

     

     

    66

     

    Interest expense

     

    (65

    )

     

     

    (22

    )

     

     

    (31

    )

     

     

    (118

    )

    Other income, net

     

     

     

     

     

     

     

    8

     

     

     

    8

     

    Total other (expense) income, net

     

    (26

    )

     

     

    5

     

     

     

    (23

    )

     

     

    (44

    )

    Pretax income (loss)

    $

    197

     

     

    $

    271

     

     

    $

    (54

    )

     

    $

    414

     

    Income tax expense

     

     

     

     

     

     

     

    104

     

    Net income from continuing operations

     

     

     

     

     

     

     

    310

     

    Net loss from discontinued operations

     

     

     

     

     

     

     

    (11

    )

    Net income

     

     

     

     

     

     

     

    299

     

    Net income attributable to noncontrolling interests

     

     

     

     

     

     

     

     

    Net income attributable to common stockholders of Mr. Cooper Group

     

     

     

     

     

     

     

    299

     

    Undistributed earnings attributable to participating stockholders

     

     

     

     

     

     

     

    1

     

    Premium on retirement of preferred stock

     

     

     

     

     

     

     

    28

     

    Net income attributable to common stockholders

     

     

     

     

     

     

    $

    270

     

    Net income per share

     

     

     

     

     

     

     

    Basic

     

     

     

     

     

     

    $

    3.42

     

    Diluted

     

     

     

     

     

     

    $

    3.29

     

     

     

     

     

     

     

     

     

    Non-GAAP Reconciliation:

     

     

     

     

     

     

     

    Pretax income (loss)

    $

    197

     

     

    $

    271

     

     

    $

    (54

    )

     

    $

    414

     

    Other mark-to-market

     

    (153

    )

     

     

     

     

     

     

     

     

    (153

    )

    Accounting items / other

     

     

     

     

    2

     

     

     

    (3

    )

     

     

    (1

    )

    Intangible amortization

     

     

     

     

     

     

     

    3

     

     

     

    3

     

    Pretax operating income (loss)

    $

    44

     

     

    $

    273

     

     

    $

    (54

    )

     

    $

    263

     

    Income tax expense

     

     

     

     

     

     

     

    (64

    )

    Operating income(1)

     

     

     

     

     

     

    $

    199

     

    ROTCE(2)

     

     

     

     

     

     

     

    25.2

    %

    Average tangible book value (TBV)(3)

     

     

     

     

     

     

    $

    3,165 

     

     

    (1)

    Assumes tax-rate of 24.2%.

    (2)

    Computed by dividing annualized earnings by average TBV.

    (3)

    Average of beginning TBV of $3,208 and ending TBV of $3,122.

     

    UNAUDITED SEGMENT STATEMENT OF

    OPERATIONS & EARNINGS RECONCILIATION

    (millions of dollars, except for earnings per share data)

     

     

    Three Months Ended December 31, 2021

     

    Servicing

     

    Originations

     

    Corporate/
    Other

     

    Consolidated

     

     

     

     

     

     

     

     

    Service related, net

    $

    147

     

     

    $

    44

     

     

    $

    16

     

     

    $

    207

     

    Net gain on mortgage loans held for sale

     

    102

     

     

     

    316

     

     

     

     

     

     

    418

     

    Total revenues

     

    249

     

     

     

    360

     

     

     

    16

     

     

     

    625

     

    Total expenses

     

    143

     

     

     

    187

     

     

     

    51

     

     

     

    381

     

    Other (expense) income, net:

     

     

     

     

     

     

     

    Interest income

     

    42

     

     

     

    26

     

     

     

     

     

     

    68

     

    Interest expense

     

    (61

    )

     

     

    (18

    )

     

     

    (36

    )

     

     

    (115

    )

    Other income, net

     

     

     

     

     

     

     

    34

     

     

     

    34

     

    Total other (expense) income, net

     

    (19

    )

     

     

    8

     

     

     

    (2

    )

     

     

    (13

    )

    Pretax income (loss)

    $

    87

     

     

    $

    181

     

     

    $

    (37

    )

     

    $

    231

     

    Income tax expense

     

     

     

     

     

     

     

    61

     

    Net income from continuing operations

     

     

     

     

     

     

     

    170

     

    Net loss from discontinued operations

     

     

     

     

     

     

     

    (15

    )

    Net income

     

     

     

     

     

     

     

    155

     

    Net income attributable to noncontrolling interests

     

     

     

     

     

     

     

     

    Net income attributable to common stockholders of Mr. Cooper Group

     

     

     

     

     

     

     

    155

     

    Undistributed earnings attributable to participating stockholders

     

     

     

     

     

     

     

     

    Net income attributable to common stockholders

     

     

     

     

     

     

    $

    155

     

    Net income per share

     

     

     

     

     

     

     

    Basic

     

     

     

     

     

     

    $

    2.08

     

    Diluted

     

     

     

     

     

     

    $

    2.01

     

     

     

     

     

     

     

     

     

    Non-GAAP Reconciliation:

     

     

     

     

     

     

     

    Pretax income (loss)

    $

    87

     

     

    $

    181

     

     

    $

    (37

    )

     

    $

    231

     

    Other mark-to-market

     

    (46

    )

     

     

     

     

     

     

     

     

    (46

    )

    Accounting items / other

     

     

     

     

    1

     

     

     

    (32

    )

     

     

    (31

    )

    Intangible amortization

     

     

     

     

     

     

     

    2

     

     

     

    2

     

    Pretax operating income (loss)

    $

    41

     

     

    $

    182

     

     

    $

    (67

    )

     

    $

    156

     

    Income tax expense(1)

     

     

     

     

     

     

     

    (38

    )

    Operating income

     

     

     

     

     

     

    $

    118

     

    ROTCE(2)

     

     

     

     

     

     

     

    14.9

    %

    Average tangible book value (TBV)(3)

     

     

     

     

     

     

    $

    3,178

     

    (1)

    Assumes tax-rate of 24.2%.

    (2)

    Computed by dividing annualized earnings by average TBV.

    (3)

    Average of beginning TBV of $3,122 and ending TBV of $3,233.

     

    UNAUDITED SEGMENT STATEMENT OF

    OPERATIONS & EARNINGS RECONCILIATION

    (millions of dollars, except for earnings per share data)

     

     

    Year Ended December 31, 2021

     

    Servicing

     

    Originations

     

    Corporate/
    Other

     

    Consolidated

     

     

     

     

     

     

     

     

    Service related, net

    $

    705

     

     

    $

    176

     

     

    $

    186

     

     

    $

    1,067

     

    Net gain on mortgage loans held for sale

     

    568

     

     

     

    1,683

     

     

     

     

     

     

    2,251

     

    Total revenues

     

    1,273

     

     

     

    1,859

     

     

     

    186

     

     

     

    3,318

     

    Total expenses

     

    502

     

     

     

    852

     

     

     

    308

     

     

     

    1,662

     

    Other (expense) income, net:

     

     

     

     

     

     

     

    Interest income

     

    129

     

     

     

    102

     

     

     

     

     

     

    231

     

    Interest expense

     

    (262

    )

     

     

    (88

    )

     

     

    (128

    )

     

     

    (478

    )

    Other income, net

     

     

     

     

     

     

     

    528

     

     

     

    528

     

    Total other (expense) income, net

     

    (133

    )

     

     

    14

     

     

     

    400

     

     

     

    281

     

    Pretax income

    $

    638

     

     

    $

    1,021

     

     

    $

    278

     

     

    $

    1,937

     

    Income tax expense

     

     

     

     

     

     

     

    471

     

    Net income from continuing operations

     

     

     

     

     

     

     

    1,466

     

    Net loss from discontinued operations

     

     

     

     

     

     

     

    (12

    )

    Net income

     

     

     

     

     

     

     

    1,454

     

    Net income attributable to noncontrolling interests

     

     

     

     

     

     

     

     

    Net income attributable to common stockholders of Mr. Cooper Group

     

     

     

     

     

     

     

    1,454

     

    Undistributed earnings attributable to participating stockholders

     

     

     

     

     

     

     

    8

     

    Premium on retirement of preferred stock

     

     

     

     

     

     

     

    28

     

    Net income attributable to common stockholders

     

     

     

     

     

     

    $

    1,418

     

    Net income per share

     

     

     

     

     

     

     

    Basic

     

     

     

     

     

     

    $

    17.24

     

    Diluted

     

     

     

     

     

     

    $

    16.53

     

     

     

     

     

     

     

     

     

    Non-GAAP Reconciliation:

     

     

     

     

     

     

     

    Pretax income

    $

    638

     

     

    $

    1,021

     

     

    $

    278

     

     

    $

    1,937

     

    Other mark-to-market

     

    (437

    )

     

     

     

     

     

     

     

     

    (437

    )

    Accounting items / other

     

    1

     

     

     

    9

     

     

     

    (516

    )

     

     

    (506

    )

    Intangible amortization

     

     

     

     

     

     

     

    12

     

     

     

    12

     

    Pretax operating income (loss)

    $

    202

     

     

    $

    1,030

     

     

    $

    (226

    )

     

    $

    1,006

     

    Income tax expense(1)

     

     

     

     

     

     

     

    (243

    )

    Operating income

     

     

     

     

     

     

    $

    763

     

    ROTCE(2)

     

     

     

     

     

     

     

    25.7

    %

    Average tangible book value (TBV)(3)

     

     

     

     

     

     

    $

    2,970

     

    (1)

    Assumes tax-rate of 24.2%.

    (2)

    Computed by dividing annualized earnings by average TBV.

    (3)

    Average of quarterly TBV averages of $2,555 for 1Q’21, $2,983 for 2Q’21, $3,165 for 3Q’21, and $3,178 for 4Q’21.

    Non-GAAP Reconciliation:

    Quarter Ended

    ($ in millions except value per share data)

    Q3'21

     

    Q4'21

    Stockholders' equity (BV)

    $

    3,260

     

     

    $

    3,367

     

    Goodwill

     

    (120

    )

     

     

    (120

    )

    Intangible assets

     

    (18

    )

     

     

    (14

    )

    Tangible book value (TBV)

    $

    3,122

     

     

    $

    3,233

     

    Ending shares of common stock outstanding (in millions)

     

    75.1

     

     

     

    73.8

     

     

     

     

     

    BV/share

    $

    43.40

     

     

    $

    45.64

     

    TBV/share

    $

    41.56

     

     

    $

    43.82

     

     

     

     

     

    Net income

    $

    299

     

     

    $

    155

     

    ROCE(1)

     

    36.2

    %

     

     

    18.7

    %

     

     

     

     

    Beginning stockholders’ equity

    $

    3,350

     

     

    $

    3,260

     

    Ending stockholders’ equity

    $

    3,260

     

     

    $

    3,367

     

    Average stockholders’ equity (BV)

    $

    3,305

     

     

    $

    3,314

     

    (1)

    Computed by dividing annualized earnings by average BV.

     



    Business Wire (engl.)
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    Mr. Cooper Delivers $1.4 billion GAAP Net Income and 17% Servicing Portfolio Growth for Full-year 2021 Mr. Cooper Group Inc. (NASDAQ: COOP) (the “Company”), which principally operates under the Mr. Cooper and Xome brands, reported a fourth quarter net income of $155 million or $2.01 per diluted share. The Company reported pretax income of $231 …