Mr. Cooper Group Inc., which principally operates under the Mr. Cooper and Xome brands, reported a fourth quarter net income of $461 million or $4.95 per diluted share. Net income included $285 million recovery of deferred tax asset (DTA) reserve and positive $102 million in mark-to-market. Excluding the mark-to-market and other items, the Company reported pretax operating income of $125 million. Items excluded from operating income were $102 million in mark-to-market, net of the add back of $31 million in fair value amortization that is included in the full mark-to-market, $6 million in severance charges related to corporate actions, and $12 million of intangible amortization.
In the fourth quarter, Servicing recorded pretax income of $189 million. The total servicing portfolio remained stable, ending the quarter at $643 billion UPB. Servicing earned pretax operating income excluding the full mark of $87 million, equivalent to a servicing margin of 5.5 bps. At quarter end, the carrying value of theMSR was $3,502 million, of which $3,496 million was at fair value equivalent to 118 bps of MSR UPB and original cost basis of 86 bps.
The Xome segment recorded pretax income of $9 million and pretax operating income of $14 million in the fourth quarter, which excluded severance charges, and intangible amortization.
Chairman and CEO Jay Bray commented, “This was a strong operating quarter with solid results in Originationsand Xome and a stable quarter in servicing, capping a year of tremendous progress for the organization. We successfully delivered on our commitments to integrate recent acquisitions and improve profitability. ”
Chris Marshall, Vice Chairman and CFO added, “In addition to delivering strong operating performance, we made progress in our balance sheet strategy by deleveraging and building liquidity, which is key to sustaining return on equity and growth over the long term.