- Reported $73 million net income or $0.77 per diluted share
- Generated strong pretax operating income of $350 million,
equivalent to a ROTCE of 55.0%, offset by a mark-to-market loss of
$261 million
- Increased unrestricted cash quarter-over-quarter from $579
million to $1.0 billion
- Originations segment generated record pretax income of $433
million and pretax operating income of $434 million on funded
volume of $10.7 billion
- Servicing margin compressed to 0.7 bps
- Xome reported pretax income of $12 million and pretax operating
income of $13 million
- Forbearance declined from a peak of 7.1% of customers to 5.9%
as of July 27th
- Board authorized $100 million stock repurchase
Mr. Cooper Group Inc. (NASDAQ: COOP) (the “Company”), which
principally operates under the Mr. Cooper® and Xome® brands,
reported a second quarter net income of $73 million or $0.77 per
diluted share. Net income included a negative $261 million in
mark-to-market. Excluding the mark-to-market and other items, the
Company reported pretax operating income of $350 million. Items
excluded from operating income were negative $261 million in
mark-to-market, net of the add back of $29 million in fair value
amortization that is included in the full mark-to-market, $1
million in severance charges related to the shutdown of the
Wholesale division, and $7 million of intangible amortization.
Chairman and CEO Jay Bray commented, “I’m very proud of our team
members, who have done a fantastic job adapting to these
unprecedented conditions. Thanks to their hard work, the company
produced the strongest operating results in our history, driven by
record margins in our Direct-to-Consumer channel, which scaled up
to accommodate huge demand. Strong origination profits not only
offset pressure on the servicing margin, but also earned back the
MSR mark within the same quarter, demonstrating the significant
progress we’ve made in building a balanced and profitable business
model.”
Chris Marshall, Vice Chairman and CFO added, “Forbearance levels
declined in the quarter, as we helped customers exit forbearance
plans and resume payments with both digital solutions and
world-class customer care. At the same time, we significantly
increased cash on hand to $1 billion, which demonstrates the
company’s robust cash generation and access to liquidity, and
positions us to serve as a source of strength for the mortgage
market even if economic conditions turn more adverse.”
Servicing
The Servicing segment is focused on providing a best-in-class
home loan experience for our 3.5 million customers while
simultaneously strengthening asset performance for investors. In
the second quarter, Servicing recorded pretax loss of $251 million,
reflecting a negative $261 million in mark-to-market. The total
servicing portfolio ended the quarter at $596 billion UPB.
Servicing earned pretax operating income excluding the full mark of
$10 million, equivalent to a servicing margin of 0.7 bps. At
quarter end, the carrying value of the MSR was $2,763 million, of
which $2,757 million was at fair value equivalent to 99 bps of MSR
UPB and original cost basis of 86 bps.
Quarter Ended
($ in millions)
Q1'20
Q2'20
$
BPS
$
BPS
Operational revenue
$
313
19.7
$
294
19.2
Amortization, net of accretion
(76)
(4.8)
(102)
(6.6)
Mark-to-market
(383)
(24.1)
(261)
(17.1)
Total revenues
(146)
(9.2)
(69)
(4.5)
Total expenses
(149)
(9.3)
(122)
(8.0)
Total other income (expenses), net
(30)
(1.9)
(60)
(3.9)
Loss before taxes
(325)
(20.4)
(251)
(16.4)
Mark-to-market
383
24.1
261
17.1
Accounting items
4
0.2
—
—
Pretax operating income excluding
mark-to-market
$
62
3.9
$
10
0.7
Quarter Ended
Q1'20
Q2'20
Ending UPB ($B)
$
629
$
596
Average UPB ($B)
$
636
$
612
60+ day delinquency rate at period end
1.9
%
4.7
%
Annualized CPR
19.2
%
26.0
%
Modifications and workouts
8,709
38,684
Originations
The Originations segment focuses on creating servicing assets at
attractive margins by acquiring loans through the correspondent
channel and principally refinancing existing loans in the
Direct-to-Consumer channel. Originations earned pretax income of
$433 million and pretax operating income of $434 million excluding
$1 million in severance charges related to the shutdown of the
Wholesale division.
Mr. Cooper funded 41,223 loans in the second quarter, totaling
approximately $10.7 billion UPB which was comprised of $8.6 billion
in Direct-to-Consumer, $1.9 billion in Correspondent, and $0.2
billion in Wholesale. Funded volume decreased 13%
quarter-over-quarter.
Quarter Ended
($ in millions)
Q1'20
Q2'20
Income before taxes
$
158
$
433
Accounting items
—
1
Pretax operating income excluding
accounting items
$
158
$
434
Quarter Ended
($ in millions)
Q1'20
Q2'20
Total pull through adjusted volume
$
12,677
$
12,394
Funded volume
$
12,359
$
10,729
Refinance recapture percentage
38
%
31
%
Recapture percentage
30
%
26
%
Purchase volume as a percentage of funded
volume
26
%
10
%
Xome
Xome provides real estate solutions including property
disposition, asset management, title, close, valuation, and field
services for Mr. Cooper and third-party clients. The Xome segment
recorded pretax income of $12 million and pretax operating income
of $13 million in the second quarter, which excluded intangible
amortization.
Quarter Ended
($ in millions)
Q1'20
Q2'20
Income before taxes
$
11
$
12
Intangible amortization
2
1
Pretax operating income excluding
intangible
amortization
$
13
$
13
Quarter Ended
($ in millions)
Q1'20
Q2'20
Exchange property sold
2,114
1,191
Average Exchange property listings
17,777
17,438
Services orders completed
408,734
423,974
Percentage of revenue earned from
third-party customers
55
%
53
%
Conference Call Webcast and Investor
Presentation
The Company will host a conference call on July 30, 2020 at 9:00
A.M. Eastern Time. The conference call may be accessed by dialing
855-874-2685, or 720-634-2923 internationally. Please use the
participant passcode 9776505 to access the conference call. A
simultaneous audio webcast of the conference call will be available
in the Investor section of www.mrcoopergroup.com. A replay will
also be available approximately two hours after the conclusion of
the conference call by dialing 855-859-2056, or 404-537-3406
internationally. Please use the passcode 9776505 to access the
replay. The replay will be accessible through August 14, 2020 at
12:00 P.M. Eastern Time.
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.
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.
MR. COOPER GROUP INC. AND
SUBSIDIARIES
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(millions of dollars, except for
earnings per share data)
Three Months Ended
March 31, 2020
Three Months Ended
June 30, 2020
Revenues:
Service related, net, excluding
mark-to-market
$
330
$
273
Mark-to-market
(383)
(261)
Net gain on mortgage loans held for
sale
331
618
Total revenues
278
630
Total expenses:
444
419
Other expense, net:
Interest income
118
76
Interest expense
(192)
(177)
Other income, net
1
—
Total other expenses, net
(73)
(101)
(Loss) income before income tax (benefit)
expense
(239)
110
Income tax (benefit) expense
(68)
37
Net (loss) income
(171)
73
Net loss attributable to non-controlling
interest
(3)
—
Net (loss) income attributable to Mr.
Cooper Group
(168)
73
Undistributed earnings attributable to
participating stockholders
—
1
Net (loss) income attributable to
common stockholders
$
(168)
$
72
Net (loss) income per share attributable
to common stockholders:
Basic
$
(1.84)
$
0.78
Diluted
$
(1.84)
$
0.77
Weighted average shares of common stock
outstanding (in millions):
Basic
91.4
92.0
Diluted
91.4
93.0
MR. COOPER GROUP INC. AND
SUBSIDIARIES
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(millions of dollars)
March 31, 2020
June 30, 2020
Assets
Cash and cash equivalents
$
579
$
1,041
Restricted cash
266
260
Mortgage servicing rights
3,115
2,763
Advances and other receivables, net
685
668
Reverse mortgage interests, net
5,955
5,709
Mortgage loans held for sale at fair
value
3,922
3,179
Property and equipment, net
111
115
Deferred tax assets, net
1,411
1,391
Other assets
1,569
2,174
Total assets
$
17,613
$
17,300
Liabilities and
Stockholders' Equity
Unsecured senior notes, net
$
2,259
$
2,261
Advances facilities, net
489
475
Warehouse facilities, net
4,551
4,031
Payables and other liabilities
1,965
2,460
MSR related liabilities - nonrecourse at
fair value
1,285
1,173
Mortgage servicing liabilities
53
48
Other nonrecourse debt, net
4,945
4,707
Total liabilities
15,547
15,155
Total stockholders' equity
2,066
2,145
Total liabilities and stockholders'
equity
$
17,613
$
17,300
UNAUDITED SEGMENT STATEMENT
OF
OPERATIONS & EARNINGS
RECONCILIATION
(millions of dollars, except for
earnings per share data)
Three Months Ended March 31,
2020
Servicing
Originations
Xome
Corporate/
Other
Consolidated
Service related, net
$
(180)
$
20
$
106
$
1
$
(53)
Net gain on mortgage loans held for
sale
34
297
—
—
331
Total revenues
(146)
317
106
1
278
Total expenses
149
166
96
33
444
Other income (expense), net:
Interest income
83
34
—
1
118
Interest expense
(113)
(27)
—
(52)
(192)
Other income, net
—
—
1
—
1
Total other income (expense), net
(30)
7
1
(51)
(73)
Pretax (loss) income
$
(325)
$
158
$
11
$
(83)
$
(239)
Income tax benefit
(68)
Net loss
(171)
Net loss attributable to noncontrolling
interests
(3)
Net loss attributable to common
stockholders of Mr. Cooper Group
(168)
Undistributed earnings attributable to
participating stockholders
—
Net loss attributable to common
stockholders
$
(168)
Net loss per share
Basic
$
(1.84)
Diluted
$
(1.84)
Non-GAAP Reconciliation:
Pretax (loss) income
$
(325)
$
158
$
11
$
(83)
$
(239)
Mark-to-market
383
—
—
—
383
Accounting items / other
4
—
—
—
4
Intangible amortization
—
—
2
7
9
Pretax income (loss), net of notable
items
62
158
13
(76)
157
Fair value amortization (1)
(30)
—
—
—
(30)
Pretax operating income (loss)
$
32
$
158
$
13
$
(76)
$
127
Income tax expense
(31)
Operating income
$
96
ROTCE
19.6
%
(1) Amount represents additional
amortization required under the fair value amortization method over
the cost amortization method.
UNAUDITED SEGMENT STATEMENT
OF
OPERATIONS & EARNINGS
RECONCILIATION
(millions of dollars, except for
earnings per share data)
Three Months Ended June 30,
2020
Servicing
Originations
Xome
Corporate/
Other
Consolidated
Service related, net
$
(114)
$
21
$
106
$
(1)
$
12
Net gain on mortgage loans held for
sale
45
573
—
—
618
Total revenues
(69)
594
106
(1)
630
Total expenses
122
167
95
35
419
Other income (expense), net:
Interest income
57
19
—
—
76
Interest expense
(117)
(13)
—
(47)
(177)
Other income (expense), net
—
—
1
(1)
—
Total other income (expense), net
(60)
6
1
(48)
(101)
Pretax (loss) income
$
(251)
$
433
$
12
$
(84)
$
110
Income tax expense
37
Net income
73
Net loss attributable to noncontrolling
interests
—
Net income attributable to common
stockholders of Mr. Cooper Group
73
Undistributed earnings attributable to
participating stockholders
1
Net income attributable to common
stockholders
$
72
Net income per share
Basic
$
0.78
Diluted
$
0.77
Non-GAAP Reconciliation:
Pretax (loss) income
$
(251)
$
433
$
12
$
(84)
$
110
Mark-to-market
261
—
—
—
261
Accounting items / other
—
1
—
—
1
Intangible amortization
—
—
1
6
7
Pretax income (loss), net of notable
items
10
434
13
(78)
379
Fair value amortization (1)
(29)
—
—
—
(29)
Pretax operating (loss) income
$
(19)
$
434
$
13
$
(78)
$
350
Income tax expense
(85)
Operating income
$
265
ROTCE
55.0
%
(1) Amount represents additional
amortization required under the fair value amortization method over
the cost amortization method.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200730005323/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
Mr Cooper (NASDAQ:COOP)
Historical Stock Chart
Von Feb 2024 bis Mär 2024
Mr Cooper (NASDAQ:COOP)
Historical Stock Chart
Von Mär 2023 bis Mär 2024