EX-99.1 2 exh_991.htm EXHIBIT 99.1

Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE

 

MR. COOPER GROUP REPORTS SECOND QUARTER 2025 RESULTS

 

•Reported net income of$198 million including other mark-to-market of$30 million, equivalent to ROCE of 15.9% and operating ROTCE of 17.2%

 

  • Servicing portfolio grew 25% y/y to $1,509 billion

 

•Subsequent to quarter-end, launched MSR Fund with initial $200 million commitment

 

•Recognized by Great Place to Work as one of the Best Workplaces in Texas

 

Dallas, TX (July 23, 2025) - Mr. Cooper Group Inc. (NASDAQ: COOP) (the "Company"), reported second quarter income before income tax expense of $277 million and net income of $198 million. Excluding other mark-to-market and other adjustments, the Company reported pretax operating income of $269 million. Adjustments included other mark-to-market net of hedges of $30 million and other items shown below in the reconciliation of GAAP and non-GAAP results.

 

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$364 million, including other mark-to-market of $30 million. The servicing portfolio ended the quarter at $1,509 billion. Servicing generated pretax operating income, excluding other mark-to-market, of $332 million. At quarter end, the carrying value of the MSR was $11,431 million equivalent to 156 bps ofMSR UPB.

 

 

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   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 items  $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%

 

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$64 million and pretax operating income of $64 million.

 

The Company funded 33,051 loans in the second quarter, totaling approximately $9.4 billion UPB, which was comprised of$2.6 billion in direct-to-consumer and $6.8 billion in correspondent. Funded volume increased 14% quarter-over-quarter, while pull through adjusted volume increased 10% quarter-over-quarter to $9.7 billion.

 

   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 

 

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   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.

 

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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

Shareholders@mrcooper.com

 

Media Contact:

Christen Reyenga, VP Corporate Communications

MediaRelations@mrcooper.com

 

 

 

 

 

 

 

 

 

 

 

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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

June 30, 2025

 

Three Months Ended

March 31, 2025

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 

 

 

 

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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 

 

 

 

 

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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/ Other  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 24.2%.
(2)Computed by dividing annualized earnings by average TBV.
(3)Average of beginning TBV of $4,641 and ending TBV of $4,857.

 

 

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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/ Other  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 24.2%.
(2)Computed by dividing annualized earnings by average TBV.
(3)Average of beginning TBV of $4,553 and ending TBV of $4,641.

 

 

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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.

 

 

 

 

 

 

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