Mr. Cooper Group(US:COOP)2025-04-23 12:00Financial Data and Key Metrics Changes - The company reported a net income of $88 million, with pretax operating earnings of $255 million, offset by an $82 million negative MSR mark net of hedges [18] - ROTCE increased to 16.8%, up from 15.8% in the previous quarter, reflecting benefits from the Flagstar acquisition [6] - Liquidity rose to $3.9 billion from $3.4 billion in the previous quarter, indicating strong cash flow generation [22] Business Line Data and Key Metrics Changes - The servicing segment generated pretax income of $332 million, a 22% year-over-year increase, attributed to lower amortization and operating leverage [10] - Originations produced $53 million in EBT, slightly above guidance, with strong volumes in the correspondent channel [13] - The total portfolio decreased slightly to $1.5 trillion, with a subservicing portfolio growing organically by 2% quarter-over-quarter [12] Market Data and Key Metrics Changes - Cash-out refinances made up 46% of volume, up from 39% last quarter, indicating strong demand for home equity loans [14] - The company helped over 9,000 customers access equity in their homes during the quarter [14] - Delinquencies in the mortgage servicing rights (MSR) portfolio decreased to 1.1%, reflecting strong asset quality [21] Company Strategy and Development Direction - The pending combination with Rocket aims to create a fully integrated homeownership platform, enhancing customer experience through AI and technology [4] - The company is focused on operational excellence and has received multiple awards for its servicing platform, which supports long-term growth [9] - The integration with Rocket is expected to leverage both companies' strengths, creating a comprehensive homeownership ecosystem [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the integration with Rocket and the potential for enhanced customer offerings [16] - The current environment presents limited opportunities for rate and term refinances, but the company is prepared to act quickly when conditions improve [16] - The company does not expect to repurchase stock prior to the closing of the Rocket transaction, which is anticipated in Q4 2025 [25] Other Important Information - The company incurred $26 million in transaction and transition charges related to the Flagstar integration [19] - The MSR was marked down due to falling interest rates, leading to a quarter-end valuation of 155 basis points of UPB [20] - The capital ratio improved to 25.5%, up from 24.4% in the previous quarter, supported by strong earnings [24] Q&A Session Summary - No questions were taken during the call due to the pending combination with Rocket, as stated by management [3]