Mr Cooper Group (COOP) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 was $80 million, with pre-tax operating income of $246 million and operating ROTCE at 16.8%.

• Tangible book value per share rose 11% year-over-year to $69.93; book value per share increased to $72.49.

• Servicing portfolio reached $1.2 trillion UPB, up 32% year-over-year, with over 5.4 million customers and more than 6 million expected post-Flagstar acquisition.

• Originations segment delivered $69 million pre-tax income, with funded volume up 80% quarter-over-quarter to $6.8 billion.

• Flagstar acquisition remains on track to close in Q4 2024, expected to add $350 billion in UPB and over 1.3 million customers.

Financial highlights

• Total revenues for Q3 2024 were $424 million, with net income of $80 million and pre-tax operating income of $246 million.

• Record liquidity of $4.1 billion, up from $3.2 billion in Q2.

• MSR mark-down of $415 million due to lower rates, offset by $289 million in hedge gains.

• Diluted EPS was $1.22 for Q3 2024.

• Capital ratio (tangible net worth to assets) at 27.9%, above the 20–25% target range.

Outlook and guidance

• Q4 pre-tax servicing income guided to $285 million–$305 million, including Flagstar impact.

• Q4 pre-tax originations income guided to $45 million–$65 million, reflecting normalized profitability.

• 2025 ROTCE expected at midpoint of 14%–18% guidance, with potential upside from originations and subservicing.

• Flagstar mortgage operations acquisition expected to close in Q4 2024, adding $350 billion in UPB and 1.3 million customers.

• Company remains well-positioned for a lower interest rate environment and plans to grow direct-to-consumer and correspondent channels.