MSR Value Growth & Market Trends

ROTCE RECONCILIATION $ mm's Pretax income Income tax expense Net income ROCE (1 (1) ROTCE Pretax income Other mark-to-market Pretax loss from discontinued operations Accounting items Intangible amortization Pretax operating income Income tax expense (2 Fully-taxed operating income ROTCE Average book value Average tangible book value 3Q'21 19 | (1) ROCE is computed by dividing annualized earnings by average common equity (book value) (2) Assumes GAAP tax-rate of 24.2% and does not give credit to cash flow benefits of the DTA $399 (100) $299 36.2% 37.8% $399 (153) 15 (1) 3 $263 (64) $199 25.2% $3,305 $3,165 ROTCE is a non-GAAP financial measure that is computed by dividing annualized earnings by average tangible common equity (tangible book value). Tangible common equity equals total stockholders' equity less goodwill and intangible assets. The methodology of determining tangible common equity may differ among companies. Management believes that ROTCE is a useful financial measure because it measures the performance of a business consistently and enables investors and others to assess the Company's use of equity. We are unable to provide a reconciliation of the forward-looking non-GAAP financial measure to its most directly comparable GAAP financial measure because we are unable to provide, without unreasonable effort, a meaningful or accurate calculation or estimate of amounts that would be necessary for the reconciliation due to the complexity and inherent difficulty in forecasting and quantifying future amounts or when they may occur. Such unavailable information could be significant to future results. Mr. CooperGroup

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