Mr. Cooper Group Inc. (NASDAQ:COOP) Q3 2024 Earnings Call October 23, 2024 10:00 AM ET
Company Participants
Ken Posner - Investor Relations
Jay Bray - Chairman and Chief Executive Officer
Mike Weinbach - President
Kurt Johnson - Executive Vice President and Chief Financial Officer
Conference Call Participants
Terry Ma - Barclays
Mark DeVries - Deutsche Bank
Eric Hagen - BTIG
Giuliano Bologna - Compass Point
Bose George - KBW
Crispin Love - Piper Sandler
Operator
Good day and thank you for standing by. Welcome to the Mr. Cooper Group Q3 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your first speaker at Mr. Cooper Group. Please go ahead.
Ken Posner
Good morning and welcome to Mr. Cooper Group’s third quarter earnings call. My name is Ken Posner, and I’m SVP of Strategic Planning and Investor Relations. With me today are Jay Bray, Chairman and CEO; Mike Weinbach, President; and Kurt Johnson, Executive Vice President and CFO. As a reminder, this call is being recorded. You can find the slides on our Investor Relations webpage at investors.mrcoopergroup.com.
During the call, we may refer to non-GAAP measures, which are reconciled to GAAP results in the appendix to the slide deck. Also, we may make forward-looking statements, which you should understand could be affected by risk factors that we have identified in our 10-K and other SEC filings. We are not undertaking any commitment to update these statements if conditions change.
I’ll now turn the call over to Jay.
Jay Bray
Good morning, everyone and thank you for joining our call. Let’s dive into the quarterly highlights, starting on Slide 3. In summary, we produced a very solid quarter with pre-tax operating income of $246 million and operating ROTCE of 16.8%, which is at the upper end of our guidance. Tangible book value grew 11% year-over-year to $69.93 per share. And our balance sheet remains in strong shape, with a capital ratio of 27.9% and liquidity at a record high of $4.1 billion.
Turning to operations. We grew the servicing portfolio to $1.2 trillion, which represents 5.4 million customers and generated $305 million in pre-tax servicing income, thanks to continued strong operating leverage. Our Originations segment generated $69 million of pre-tax income, which significantly exceeded our guidance. This was, of course, due in part to the drop in mortgage rates in the quarter. However, we also benefited from investments we’ve been making in both our direct-to-consumer and correspondent platforms, which together out-indexed the market with 80% sequential growth in fundings.