Mr. Cooper Group Inc. (COOP) Bundle
A Brief History of Mr. Cooper Group Inc.
Mr. Cooper Group Inc. (NASDAQ: COOP), a prominent player in the mortgage servicing industry, has undergone significant transformation and growth since its inception. The company primarily focuses on servicing mortgage loans and offering a range of related financial services.
Recent Financial Performance
As of September 30, 2024, Mr. Cooper reported total revenues of $1.571 billion for the nine months ended September 30, 2024, marking an increase from $1.390 billion in the same period of the previous year. The company's net income for the same period was $465 million, compared to $454 million in 2023.
| Financial Metrics | Q3 2024 | Q3 2023 | Change | YTD 2024 | YTD 2023 | Change |
|---|---|---|---|---|---|---|
| Total Revenues | $424 million | $574 million | ($150 million) | $1.571 billion | $1.390 billion | $181 million |
| Total Expenses | $335 million | $301 million | $34 million | $952 million | $840 million | $112 million |
| Net Income | $80 million | $275 million | ($195 million) | $465 million | $454 million | $11 million |
Servicing Portfolio Growth
As of September 30, 2024, Mr. Cooper's servicing portfolio reached $1.2 trillion, reflecting a 32% increase year-over-year. This growth is attributed to strategic acquisitions and a strong performance in the direct-to-consumer channel.
Acquisitions and Strategic Initiatives
The company is in the process of acquiring certain mortgage operation assets from Flagstar Bank, with the transaction expected to close in the fourth quarter of 2024. This acquisition will add approximately $1.1 billion in mortgage servicing rights and onboard an additional 1.3 million customers, increasing the total customer base to over 6 million.
Key Performance Indicators
Key metrics for Mr. Cooper as of Q3 2024 include:
- Originations Margin: 0.81% for Q3 2024, down from 0.93% in Q3 2023.
- Weighted Average Note Rate on Mortgage Loans Held for Sale: 7.7% for Q3 2024, compared to 6.8% in Q3 2023.
- Weighted Average Cost of Funds for Warehouse Facilities: 6.8% for Q3 2024, slightly down from 6.9% in Q3 2023.
Balance Sheet Highlights
As of September 30, 2024, Mr. Cooper reported total assets of $16.186 billion and total liabilities of $15.258 billion, resulting in a total equity of approximately $928 million.
| Balance Sheet Item | Amount (as of Sept 30, 2024) |
|---|---|
| Total Assets | $16.186 billion |
| Total Liabilities | $15.258 billion |
| Total Equity | $928 million |
Market Position and Future Outlook
Mr. Cooper is well-positioned in the mortgage servicing market, leveraging technology and customer-focused strategies to enhance operational efficiency. The anticipated closing of the Flagstar acquisition is expected to further strengthen its market position amidst a dynamic interest rate environment.
The company's proactive approach to managing interest rate risks and focusing on customer retention strategies is expected to contribute to sustained growth and profitability in the coming quarters.
A Who Owns Mr. Cooper Group Inc. (COOP)
Major Shareholders
As of 2024, Mr. Cooper Group Inc. (COOP) has a diverse ownership structure. The ownership is distributed among institutional investors, retail investors, and company insiders. The following table outlines the major shareholders and their respective ownership percentages:
| Shareholder | Ownership Percentage | Shares Held (in thousands) |
|---|---|---|
| Vanguard Group, Inc. | 9.7% | 6,196 |
| BlackRock, Inc. | 8.2% | 5,300 |
| State Street Corporation | 5.1% | 3,300 |
| FMR LLC (Fidelity) | 4.5% | 2,900 |
| Insider Holdings | 1.8% | 1,200 |
Institutional Ownership
Institutional investors hold a significant portion of Mr. Cooper's shares. The following table provides an overview of the institutional ownership as of September 30, 2024:
| Institution | Shares Held (in thousands) | Ownership Percentage |
|---|---|---|
| Vanguard Group, Inc. | 6,196 | 9.7% |
| BlackRock, Inc. | 5,300 | 8.2% |
| State Street Corporation | 3,300 | 5.1% |
| FMR LLC (Fidelity) | 2,900 | 4.5% |
| Others (Various Institutions) | 15,000 | 23.2% |
Insider Ownership
Insider ownership remains relatively low in Mr. Cooper Group. As of September 30, 2024, the following table summarizes the ownership by company executives and board members:
| Name | Position | Shares Held (in thousands) | Ownership Percentage |
|---|---|---|---|
| Jay Bray | Chairman & CEO | 500 | 0.8% |
| David Schneider | President | 300 | 0.5% |
| Other Executives | N/A | 400 | 0.6% |
| Total Insider Ownership | N/A | 1,200 | 1.8% |
Recent Developments
In 2024, Mr. Cooper Group has been focusing on expanding its market share and enhancing operational efficiency. The following financial metrics highlight the company’s recent performance:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Revenue (in millions) | $424 | $574 |
| Net Income (in millions) | $80 | $275 |
| Operating Cash Flow (in millions) | $79 | $772 |
| Total Assets (in millions) | $16,186 | $14,196 |
Overall, Mr. Cooper Group Inc. continues to attract institutional investment while maintaining a relatively low level of insider ownership, reflecting a strong interest from the market in its operational capabilities and growth potential.
Mr. Cooper Group Inc. (COOP) Mission Statement
Vision and Commitment
Mr. Cooper Group Inc. is committed to delivering innovative mortgage solutions and exceptional customer service. The company's mission is centered around empowering homeowners through a seamless mortgage experience, whether they are purchasing a new home or refinancing an existing mortgage.
Core Values
- Customer-Centric Approach: Focusing on the needs and satisfaction of customers.
- Integrity: Upholding the highest ethical standards in all operations.
- Innovation: Embracing technology to enhance the customer experience.
- Collaboration: Working together as a team to achieve common goals.
Market Position and Financial Performance
As of September 30, 2024, Mr. Cooper reported a total revenue of $1.571 billion for the nine months ended, an increase from $1.390 billion in the same period of 2023. The company’s net income for the same period was $465 million, compared to $454 million in 2023.
| Financial Metric | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Total Revenue | $1.571 billion | $1.390 billion |
| Net Income | $465 million | $454 million |
| Total Expenses | $952 million | $840 million |
| Effective Tax Rate | 25.2% | 22.3% |
Operational Segments
Mr. Cooper operates primarily through two segments: Servicing and Originations. The Servicing segment focuses on operational activities for mortgage investors, while the Originations segment manages loan origination and sales activities.
Servicing Segment Performance
For the nine months ending September 30, 2024, the Servicing segment generated $1.162 billion in revenue, an increase from $1.071 billion in the same period of 2023. The average Unpaid Principal Balance (UPB) for the Servicing segment reached $1.224 trillion.
| Servicing Metrics | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Total Revenue | $1.162 billion | $1.071 billion |
| Average UPB | $1.224 trillion | $897 billion |
| Loan Count | 5,440,901 | 4,288,683 |
Originations Segment Performance
The Originations segment reported a revenue of $349 million for the nine months ending September 30, 2024, compared to $265 million in 2023. The total funded volume increased to $13.507 billion from $9.973 billion.
| Originations Metrics | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Total Revenue | $349 million | $265 million |
| Total Funded Volume | $13.507 billion | $9.973 billion |
Future Outlook
Mr. Cooper Group is strategically positioned to expand its market share and enhance its service offerings. The company is finalizing the acquisition of certain mortgage operation assets from Flagstar, which is expected to close in Q4 2024. This acquisition is projected to increase the customer base to over 6 million.
How Mr. Cooper Group Inc. (COOP) Works
Business Model
Mr. Cooper Group Inc. operates primarily through two segments: Servicing and Originations. The Servicing segment manages the operational activities for mortgage investors, while the Originations segment focuses on originating residential mortgage loans.
Servicing Segment Operations
The Servicing segment includes collecting borrower payments, investor reporting, customer service, and managing collections or foreclosures. As of September 30, 2024, Mr. Cooper serviced approximately 5.44 million loans, with an average loan amount of $227,668.
| Metric | September 30, 2024 | September 30, 2023 |
|---|---|---|
| Loan Count | 5,440,901 | 4,288,683 |
| Average Loan Amount | $227,668 | $218,561 |
| 60+ Days Delinquent (% of Loans) | 1.5% | 1.9% |
| 90+ Days Delinquent (% of Loans) | 1.2% | 1.6% |
| 120+ Days Delinquent (% of Loans) | 1.0% | 1.5% |
Originations Segment Operations
In the Originations segment, Mr. Cooper originated loans through two main channels: Direct-to-Consumer (DTC) and Correspondent. For the nine months ended September 30, 2024, the total funded volume was $13.5 billion, significantly up from $9.97 billion in the same period of 2023.
| Metric | September 30, 2024 | September 30, 2023 |
|---|---|---|
| Total Funded Volume | $13.5 billion | $9.97 billion |
| DTC Funded Volume | $5.26 billion | $4.70 billion |
| Correspondent Funded Volume | $8.25 billion | $5.27 billion |
Financial Performance
For the third quarter of 2024, Mr. Cooper reported total revenues of $424 million, down from $574 million in Q3 2023. The net income for Q3 2024 was $80 million compared to $275 million in Q3 2023.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Total Revenues | $424 million | $574 million |
| Net Income | $80 million | $275 million |
| Total Expenses | $335 million | $301 million |
Cash Flows
For the nine months ended September 30, 2024, Mr. Cooper's cash flows were as follows:
| Cash Flow Type | 2024 | 2023 |
|---|---|---|
| Operating Activities | $79 million | $772 million |
| Investing Activities | ($1.497 billion) | ($1.088 billion) |
| Financing Activities | $1.597 billion | $318 million |
Debt and Liquidity
As of September 30, 2024, Mr. Cooper had total available borrowing capacity of $12.901 billion, with $3.323 billion immediately available to draw.
Key Metrics
Key operational metrics for the company included:
| Metric | Value |
|---|---|
| Weighted Average Note Rate - Mortgage Loans Held for Sale | 7.7% |
| Weighted Average Cost of Funds - Warehouse Facilities | 6.8% |
How Mr. Cooper Group Inc. (COOP) Makes Money
Revenue Streams
Mr. Cooper Group Inc. generates revenue primarily through two segments: Servicing and Originations.
Servicing Segment Revenue
The Servicing segment includes operational activities on behalf of investors or owners of the underlying mortgages and mortgage servicing rights. Key revenue components include:
- Base servicing fees: $487 million (Q3 2024)
- Modification fees: $7 million (Q3 2024)
- Late payment fees: $22 million (Q3 2024)
- Other ancillary revenues: $22 million (Q3 2024)
Total MSR operational revenue was $538 million for Q3 2024, reflecting an increase from $487 million in Q3 2023.
Originations Segment Revenue
The Originations segment involves the origination of residential mortgage loans through Direct-to-Consumer (DTC) and correspondent channels. Key metrics include:
- DTC PTA lock volume: $2,525 million (Q3 2024)
- Correspondent PTA lock volume: $4,966 million (Q3 2024)
- Total PTA lock volume: $7,491 million (Q3 2024)
- Funded volume: $6,835 million (Q3 2024)
Revenue from the Originations segment was $150 million for Q3 2024, compared to $88 million in Q3 2023.
Financial Performance Overview
In Q3 2024, Mr. Cooper reported total revenues of $424 million, a decrease from $574 million in Q3 2023. The decrease was primarily due to negative mark-to-market adjustments on MSR, which totaled -$125 million for Q3 2024 compared to $63 million in Q3 2023.
| Financial Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Total Revenues | $424 million | $574 million | ($150 million) |
| Total Expenses | $335 million | $301 million | ($34 million) |
| Net Income | $80 million | $275 million | ($195 million) |
Operational Insights
For the nine months ended September 30, 2024, total revenues amounted to $1,571 million, an increase from $1,390 million in the same period of 2023. Key operational insights include:
- Net income for the nine months was $465 million, slightly up from $454 million in 2023.
- Interest income grew to $574 million for nine months ended September 30, 2024, compared to $167 million for the same period in 2023.
- Interest expense increased to $556 million due to higher financing costs associated with the acquisition of Home Point.
Segment Results
The following table summarizes the financial results for the Servicing and Originations segments for Q3 2024:
| Segment | Total Revenues | Total Expenses | Income Before Tax |
|---|---|---|---|
| Servicing | $256 million | $180 million | $77 million |
| Originations | $150 million | $83 million | $69 million |
Market Position and Strategy
Mr. Cooper's strategy focuses on expanding its servicing portfolio and maximizing servicing margins. The company benefits from:
- A low-cost operating platform that enhances efficiency.
- A strong customer service commitment that improves retention rates.
- Competitive advantages in compliance and risk management.
The effective tax rate for Q3 2024 was 29.1%, compared to 21.7% in Q3 2023. This increase is attributed to changes in income before taxes and discrete tax items related to share-based compensation.
Future Outlook
Mr. Cooper expects continued growth in its Originations segment driven by rising mortgage rates and an expanding servicing portfolio. The acquisition of Flagstar’s mortgage operation assets is anticipated to close in Q4 2024, which will enhance customer access to over 6 million clients.
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Article updated on 8 Nov 2024
Resources:
- Mr. Cooper Group Inc. (COOP) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Mr. Cooper Group Inc. (COOP)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Mr. Cooper Group Inc. (COOP)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.