- Originations of $4.5 Billion in Second Quarter and $7.2
Billion YTD
- Net Revenue of $236.8 Million in Second Quarter and $340.7
Million YTD
- Net Income of $36.9 Million in Second Quarter and Net Loss
of $0.3 Million YTD
- Adjusted Net Income of $9.0 Million in Second Quarter and
$6.4 Million YTD
- Return on Equity of 12.0% and Adjusted Return on Equity of
2.9% in Second Quarter
- Gain on Sale Margin on Originations of 310 bps in Second
Quarter
- Purchase Recapture Rate of 27% in the Second
Quarter
- 94% of Originations were Purchase Originations in the Second
Quarter
- Declares Special Cash Dividend of $0.50 Per Share Subsequent
to Quarter End
Guild Holdings Company (NYSE: GHLD) (“Guild” or the “Company”),
a growth-oriented mortgage company that employs a
relationship-based loan sourcing strategy to execute on its mission
of delivering the promise of homeownership, today announced results
for the second quarter ended June 30, 2023.
“We continue to effectively execute on our differentiated
strategy to gain market share through both organic growth and
selective acquisitions. While broader industry challenges persist
due to higher interest rates and limited home inventory, we believe
Guild is well-positioned given our focus on the purchase mortgage
market, innovative new products to meet the needs of even more
buyers, and our growing network of loan officers with deep
relationships,” stated Terry Schmidt, Chief Executive Officer. “We
are pleased with the contributions from our recent acquisitions and
believe we will realize additional benefits and further our retail
reach as they are fully integrated. We have prioritized maintaining
a strong balance sheet and liquidity position, which supports our
ongoing pursuit of additional external growth opportunities. We
cannot control the economic environment, however we will continue
to leverage our proven business and aim to further increase market
share and to accelerate growth as the markets normalize.”
Second Quarter
2023
Highlights
Total in-house originations of $4.5
billion compared to $2.7 billion in the prior quarter
Originated 94% of closed loan origination
volume from purchase business, compared to the Mortgage Bankers
Association estimate of 80% for the same period
Net revenue of $236.8 million compared to
$103.9 million in the prior quarter
Net income of $36.9 million compared to
net loss of $37.2 million in the prior quarter
Servicing portfolio unpaid principal
balance of $82.0 billion as of June 30, 2023, up 3% compared to
$79.9 billion as of March 31, 2023
Adjusted net income and adjusted EBITDA
totaled $9.0 million and $16.5 million, respectively, compared to
adjusted net loss and adjusted EBITDA of $2.5 million and $1.1
million, respectively, in the prior quarter
Return on equity of 12.0% and adjusted
return on equity of 2.9%, compared to (12.1)% and (0.8)%,
respectively, in the prior quarter
Year-To-Date
2023
Highlights
Total in-house originations of $7.2
billion compared to $11.8 billion in the prior year
Originated 93% of closed loan origination
volume from purchase business, compared to the Mortgage Bankers
Association estimate of 80% for the same period
Net revenue of $340.7 million compared to
$769.3 million in the prior year
Net loss of $0.3 million compared to net
income of $266.3 million in the prior year
Servicing portfolio unpaid principal
balance of $82.0 billion as of June 30, 2023, up 8% compared to
$75.9 billion as of June 30, 2022
Adjusted net income and adjusted EBITDA
totaled $6.4 million and $17.7 million, respectively, compared to
adjusted net income and adjusted EBITDA of $46.0 million and $68.6
million, respectively, in the prior year
Return on equity of 0% and adjusted return
on equity of 1.0%, compared to 50.5% and 8.7%, respectively, in the
prior year
Other Highlights Subsequent to Quarter End
On August 2, 2023, the board of directors of Guild declared a
special cash dividend of $0.50 per share on its Class A and Class B
common stock. The $0.50 per share dividend will be paid on or about
September 7, 2023 to stockholders of record on August 23, 2023.
Second Quarter Summary
Please refer to “Key Performance Indicators” and “GAAP to
Non-GAAP Reconciliations” elsewhere in this release for a
description of the key performance indicators and definitions of
the non-GAAP measures and reconciliations to the nearest comparable
financial measures calculated and presented in accordance with
accounting principles generally accepted in the United States of
America (“GAAP”).
($ amounts in millions, except per share
amounts)
2Q’23
1Q’23
%∆
YTD’23
YTD’22
%∆
Total in-house originations
$
4,458.5
$
2,701.4
65
%
$
7,159.9
$
11,783.5
(39
)%
Gain on sale margin on originations
(bps)
310
343
(10
)%
323
382
(15
)%
Gain on sale margin on pull-through
adjusted locked volume (bps)
314
284
11
%
299
347
(14
)%
UPB of servicing portfolio (period
end)
$
82,030.4
$
79,916.6
3
%
$
82,030.4
$
75,856.6
8
%
Net revenue
$
236.8
$
103.9
128
%
$
340.7
$
769.3
(56
)%
Total expenses
$
186.4
$
154.7
20
%
$
341.1
$
412.7
(17
)%
Net income (loss)
$
36.9
$
(37.2
)
199
%
$
(0.3
)
$
266.3
(100
)%
Return on equity
12.0
%
(12.1
)%
199
%
—
%
50.5
%
(100
)%
Adjusted net income (loss)
$
9.0
$
(2.5
)
463
%
$
6.4
$
46.0
(86
)%
Adjusted EBITDA
$
16.5
$
1.1
NM
$
17.7
$
68.6
(74
)%
Adjusted return on equity
2.9
%
(0.8
)%
463
%
1.0
%
8.7
%
(88
)%
Earnings (loss) per share
$
0.61
$
(0.61
)
199
%
$
—
$
4.36
(100
)%
Diluted earnings (loss) per share
$
0.60
$
(0.61
)
198
%
$
—
$
4.31
(100
)%
Adjusted earnings (loss) per share
$
0.15
$
(0.04
)
463
%
$
0.10
$
0.75
(86
)%
Origination Segment Results
Origination segment net loss was $21.3 million in the second
quarter compared to $32.8 million in the prior quarter on higher
origination volumes, but still reflecting the impact of higher
interest rates and low housing inventory. Gain on sale margins on
originations was 310 bps, down 33 bps from the prior quarter due to
a continued competitive market environment. Gain on sale margins on
pull-through adjusted locked volume increased 30 bps
quarter-over-quarter to 314 bps and total pull-through adjusted
locked volume was $4.4 billion compared to $3.3 billion in the
prior quarter.
($ amounts in millions)
2Q’23
1Q’23
%∆
YTD’23
YTD’22
%∆
Total in-house originations
$
4,458.5
$
2,701.4
65
%
$
7,159.9
$
11,783.5
(39
)%
In-house originations # (000’s)
13
9
44
%
22
37
(41
)%
Net revenue
$
140.3
$
93.6
50
%
$
233.9
$
457.7
(49
)%
Total expenses
$
161.6
$
126.3
28
%
$
288.0
$
368.7
(22
)%
Net (loss) income allocated to
origination
$
(21.3
)
$
(32.8
)
(35
)%
$
(54.1
)
$
89.1
(161
)%
Servicing Segment Results
Servicing segment net income was $88.7 million in the second
quarter compared to a net loss of $0.3 million in the prior
quarter. The Company retained mortgage servicing rights (“MSRs”)
for 84% of total loans sold in the second quarter of 2023.
Net revenue totaled $98.9 million compared to $13.1 million in
the prior quarter. In the second quarter of 2023, fair value
adjustments with respect to the Company’s MSRs totaled a gain of
$27.9 million, compared to a loss of $54.9 million in the prior
quarter. Guild’s purchase recapture rate was 27% in the second
quarter of 2023 compared to 24% in the prior quarter, which
reinforces the Company’s focus on customer service and synergistic
business model.
($ amounts in millions)
2Q’23
1Q’23
%∆
YTD’23
YTD’22
%∆
UPB of servicing portfolio (period
end)
$
82,030.4
$
79,916.6
3
%
$
82,030.4
$
75,856.6
8
%
# Loans serviced (000’s) (period end)
335
328
2
%
335
314
7
%
Loan servicing and other fees
$
60.2
$
60.1
—
%
$
120.3
$
107.8
12
%
Valuation adjustment of MSRs
$
27.9
$
(54.9
)
151
%
$
(27.0
)
$
205.7
(113
)%
Net revenue
$
98.9
$
13.1
658
%
$
111.9
$
314.5
(64
)%
Total expenses
$
10.1
$
13.4
(24
)%
$
23.5
$
23.9
(2
)%
Net income (loss) allocated to
servicing
$
88.7
$
(0.3
)
NM
$
88.4
$
290.7
(70
)%
Share Repurchase Program
During the three months ended June 30, 2023, the Company
repurchased and subsequently retired 51,588 shares of its Class A
common stock at an average purchase price of $10.58 per share. As
of June 30, 2023, $13.3 million remained available for repurchase
under the Company’s share repurchase program.
Balance Sheet and Liquidity Highlights
The Company’s operating cash position was $106.0 million as of
June 30, 2023. The Company’s unutilized loan funding capacity was
$0.9 billion, while the unutilized MSR lines of credit was $205.0
million, based on total committed amounts and borrowing base
limitations. The Company’s leverage ratio was 1.1x, defined as
total secured debt including funding divided by tangible
stockholders’ equity.
(in millions)
June 30, 2023
December 31,
2022
Cash and cash equivalents
$
106.0
$
137.9
Mortgage servicing rights, net
$
1,184.5
$
1,139.5
Warehouse lines of credit
$
1,053.1
$
713.2
Notes payable
$
123.8
$
126.3
Total stockholders’ equity
$
1,251.5
$
1,249.3
Tangible net book value per share(1)
$
17.01
$
17.06
_________________________
(1)
See “GAAP to Non-GAAP Reconciliation” for
a description of this non-GAAP measure and reconciliation to the
nearest comparable financial measures calculated and presented in
accordance with GAAP.
Webcast and Conference Call
The Company will host a webcast and conference call on Thursday,
August 3, 2023 at 5:00 p.m. Eastern Time to discuss the Company’s
results for the second quarter ended June 30, 2023.
The conference call will be available on the Company's website
at https://ir.guildmortgage.com/. To
listen to a live broadcast, go to the site at least 15 minutes
prior to the scheduled start time to register. The conference call
can also be accessed by the following dial-in information:
- 1-877-407-0789 (Domestic)
- 1-201-689-8562 (International)
A replay of the call will be available on the Company's website
at https://ir.guildmortgage.com/
approximately two hours after the live call through August 17,
2023. The replay is also available by dialing 1-844-512-2921
(United States) or 1-412-317-6671 (international). The replay pin
number is 13739094.
About Guild Holdings Company
Founded in 1960 when the modern U.S. mortgage industry was just
forming, Guild Holdings Company is a nationally recognized
independent mortgage lender providing residential mortgage products
and local in-house origination and servicing. Guild’s collaborative
culture and commitment to diversity and inclusion enable it to
deliver a personalized experience for each customer. With more than
4,200 employees and over 320 retail branches, Guild has
relationships with credit unions, community banks, and other
financial institutions and services loans in 49 states and the
District of Columbia. Guild’s highly trained loan professionals are
experienced in government-sponsored programs such as FHA, VA, USDA,
down payment assistance programs and other specialized loan
programs. Its shares of Class A common stock trade on the New York
Stock Exchange under the symbol GHLD.
Forward-Looking Statements
This press release contains forward-looking statements,
including statements about the Company’s expectations for gaining
market share, ongoing pursuit of M&A opportunities,
expectations for benefits from recent acquisitions and expansion of
retail reach, expectations for increased home sales and mortgage
activity, and ability to continue to repurchase shares of the
Company’s Class A common stock pursuant to its share repurchase
program. These forward-looking statements reflect our current views
with respect to, among other things, future events and our
financial performance. These statements are often, but not always,
made through the use of words or phrases such as “may,” “should,”
“could,” “predict,” “potential,” “believe,” “will likely result,”
“expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,”
“intend,” “plan,” “projection,” “would” and “outlook,” or the
negative version of those words or other comparable words or
phrases of a future or forward-looking nature. These
forward-looking statements are not historical facts and are based
on current expectations, estimates and projections about our
industry, management’s beliefs and certain assumptions made by
management, many of which, by their nature, are inherently
uncertain and beyond our control. Accordingly, we caution you that
any such forward-looking statements are not guarantees of future
performance and are subject to risks, assumptions and uncertainties
that are difficult to predict. Although we believe that the
expectations reflected in these forward-looking statements are
reasonable as of the date made, actual results may prove to be
materially different from the results expressed or implied by the
forward-looking statements.
Important factors that could cause our actual results to differ
materially from those indicated in these forward-looking statements
include, but are not limited to, the following: any disruptions in
the secondary home loan market and their effects on our ability to
sell the loans that we originate; any changes in macroeconomic and
U.S. residential real estate market conditions; any changes in
certain U.S. government-sponsored entities and government agencies,
and any organizational or pricing changes in these entities, their
guidelines or their current roles; any changes in prevailing
interest rates or U.S. monetary policies; the effects of any
termination of our servicing rights; the effects of our existing
and future indebtedness on our liquidity and our ability to operate
our business; any disruption in the technology that supports our
origination and servicing platform; our failure to identify,
develop and integrate acquisitions of other companies or
technologies; pressure from existing and new competitors; any
failure to maintain or grow our historical referral relationships
with our referral partners; any delays in recovering service
advances; inaccuracies in the estimates of the fair value of the
substantial portion of our assets that are measured on that basis
(including our MSRs); any failure to adapt to and implement
technological changes; the failure of the internal models that we
use to manage risk and make business decisions to produce reliable
or accurate results; the degree of business and financial risk
associated with certain of our loans; any cybersecurity breaches or
other vulnerability involving our computer systems or those of
certain of our third-party service providers; our inability to
secure additional capital, if needed, to operate and grow our
business; the impact of operational risks, including employee or
consumer fraud, the obligation to repurchase sold loans in the
event of a documentation error, and data processing system failures
and errors; any repurchase or indemnification obligations caused by
the failure of the loans that we originate to meet certain criteria
or characteristics; the seasonality of the mortgage origination
industry; any failure to protect our brand and reputation; any
non-compliance with the complex laws and regulations governing our
mortgage loan origination and servicing activities; material
changes to the laws, regulations or practices applicable to reverse
mortgage programs; our control by, and any conflicts of interest
with, McCarthy Capital Mortgage Investors, LLC; the risks related
to our status as a “controlled company”; the significant influence
on our business that members of our board and management team are
able to exercise as stockholders; our dependence, as a holding
company, upon distributions from Guild Mortgage Company LLC to meet
our obligations; the risks related to the trading market of our
Class A common stock due to our dual class common stock structure;
our ability to complete repurchases under the share repurchase
program in the amount authorized or at all and the impact of the
share repurchase program on our business and financial condition;
the identification of material weaknesses in our internal control
over financial reporting; and the other risks, uncertainties and
factors set forth under Item IA. – Risk Factors and all other
disclosures appearing in Guild’s Annual Report on Form 10-K for the
year ended December 31, 2022, Quarterly Report on Form 10-Q for the
quarter ended March 31, 2023 as well as other documents Guild files
from time to time with the Securities and Exchange Commission.
The foregoing factors should not be construed as exhaustive and
should be read together with the other cautionary statements
included in this press release. If one or more events related to
these or other risks or uncertainties materialize, or if our
underlying assumptions prove to be incorrect, actual results may
differ materially from what we anticipate. Many of the important
factors that will determine these results are beyond our ability to
control or predict. Accordingly, you should not place undue
reliance on any such forward-looking statements.
Any forward-looking statement speaks only as of the date on
which it is made, and, except as otherwise required by law, we
undertake no obligation to update any forward-looking statement
made in this press release to reflect events or circumstances after
the date of this press release or to reflect new information or the
occurrence of unanticipated events. We may not actually achieve the
plans, intentions or expectations disclosed in our forward-looking
statements and you should not place undue reliance on our
forward-looking statements. Our forward-looking statements do not
reflect the potential impact of any future acquisitions, mergers,
dispositions, joint ventures, or investments we may make.
Non-GAAP Financial Measures
To supplement our financial statements presented in accordance
with GAAP and to provide investors with additional information
regarding our GAAP financial results, we disclose certain financial
measures for our consolidated and operating segment results on both
a GAAP and a non-GAAP (adjusted) basis. The non-GAAP financial
measures disclosed should be viewed in addition to, and not as an
alternative to, results prepared in accordance with GAAP. These
non-GAAP financial measures are not based on any standardized
methodology prescribed by GAAP and are not necessarily comparable
to similarly titled measures presented by other companies.
Adjusted Net Income (Loss). We define Adjusted Net Income
(Loss) as earnings attributable to Guild before the change in the
fair value measurements related to our MSRs, contingent liabilities
and notes receivable related to completed acquisitions due to
changes in valuation assumptions, amortization of acquired
intangible assets and stock-based compensation. We exclude these
items because we believe they are non-cash expenses that are not
reflective of our core operations or indicative of our ongoing
operations. Adjusted Net Income (Loss) is also adjusted by applying
an estimated effective tax rate to these adjustments. In addition
we exclude the change in the fair value of MSRs due to changes in
model inputs and assumptions from Adjusted Net Income (Loss) and
Adjusted EBITDA below because we believe this non-cash,
non-realized adjustment to net revenues is not indicative of our
operating performance or results of operations but rather reflects
changes in model inputs and assumptions (e.g., prepayment speed,
discount rate and cost to service assumptions) that impact the
carrying value of our MSRs from period to period.
Adjusted Earnings Per Share. We define Adjusted Earnings
Per Share as our adjusted net income divided by the basic weighted
average shares outstanding of our Class A and Class B common
stock.
Adjusted EBITDA. We define Adjusted EBITDA as earnings
before interest (without adjustment for net warehouse interest
related to loan fundings and payoff interest related to loan
prepayments), taxes, depreciation and amortization and net income
attributable to the non-controlling interest exclusive of any
change in the fair value measurements of the MSRs due to valuation
assumptions, contingent liabilities from business acquisitions and
stock-based compensation. We exclude these items because we believe
they are non-cash expenses that are not reflective of our core
operations or indicative of our ongoing operations.
Adjusted Return on Equity. We define Adjusted Return on
Equity as annualized Adjusted Net Income as a percentage of average
beginning and ending stockholders’ equity during the period.
Tangible Net Book Value Per Share. We define Tangible Net
Book Value Per Share as total stockholders’ equity, less intangible
assets, net and goodwill divided by the total shares of our Class A
and Class B common stock outstanding. The most directly comparable
GAAP financial measure for tangible net book value per share is
book value per share.
We use these non-GAAP financial measures (other than tangible
net book value per share) to evaluate our operating performance, to
establish budgets and to develop operational goals for managing our
business. These non-GAAP financial measures are designed to
evaluate operating results exclusive of fair value adjustments that
are not indicative of management’s operating performance.
Accordingly, we believe that these financial measures provide
useful information to investors and others in understanding and
evaluating our operating results, enhancing the overall
understanding of our past performance and future prospects. In
addition, management uses the non-GAAP financial measure of
tangible net book value per share to evaluate the adequacy of our
stockholders’ equity and assess our capital position and believes
tangible net book value provides useful information to investors in
assessing the strength of our financial position.
Our non-GAAP financial measures are not prepared in accordance
with GAAP and should not be considered in isolation of, or as an
alternative to, measures prepared in accordance with GAAP. There
are a number of limitations related to the use of these non-GAAP
financial measures rather than net income (loss), which is the most
directly comparable financial measure calculated and presented in
accordance with GAAP for Adjusted Net Income and Adjusted EBITDA,
Return on Equity, which is the most directly comparable financial
measure calculated and presented in accordance with GAAP for
Adjusted Return on Equity, and Book Value Per Share, which is the
most directly comparable financial measure calculated and presented
in accordance with GAAP for Tangible Net Book Value Per Share.
These limitations include that these non-GAAP financial measures
are not based on a comprehensive set of accounting rules or
principles and many of the adjustments to the GAAP financial
measures reflect the exclusion of items that are recurring and may
be reflected in our financial results for the foreseeable future.
In addition, other companies may use other measures to evaluate
their performance, all of which could reduce the usefulness of our
non-GAAP financial measures as tools for comparison.
For more information on these non-GAAP financial measures,
please see the “GAAP to Non-GAAP Reconciliations” included at the
end of this release.
Condensed Consolidated Balance
Sheets (unaudited)
(in thousands, except share and per
share amounts)
June 30, 2023
December 31,
2022
Assets
Cash and cash equivalents
$
105,963
$
137,891
Restricted cash
5,868
8,863
Mortgage loans held for sale
1,125,992
845,775
Reverse mortgage loans held for
investment
36,709
—
Ginnie Mae loans subject to repurchase
right
598,634
650,179
Accounts, notes and interest
receivable
65,035
58,304
Derivative assets
13,702
3,120
Mortgage servicing rights, net
1,184,503
1,139,539
Intangible assets, net
29,100
33,075
Goodwill
184,894
176,769
Other assets
182,239
186,076
Total assets
$
3,532,639
$
3,239,591
Liabilities and stockholders’
equity
Warehouse lines of credit
$
1,053,060
$
713,151
Notes payable
123,750
126,250
Ginnie Mae loans subject to repurchase
right
598,879
650,179
Accounts payable and accrued expenses
33,629
34,095
Accrued compensation and benefits
34,251
29,597
Investor reserves
18,364
16,094
Contingent liabilities due to
acquisitions
7,793
526
Derivative liabilities
—
5,173
Operating lease liabilities
83,759
85,977
Note due to related party
—
530
Deferred compensation plan
94,873
95,769
Deferred tax liabilities
232,816
232,963
Total liabilities
2,281,174
1,990,304
Commitments and contingencies
Stockholders’ equity
Preferred stock, $0.01 par value;
50,000,000 shares authorized; no shares issued and outstanding
—
—
Class A common stock, $0.01 par value;
250,000,000 shares authorized; 20,645,142 and 20,583,130 shares
issued and outstanding at June 30, 2023 and December 31, 2022,
respectively
206
206
Class B common stock, $0.01 par value;
100,000,000 shares authorized; 40,333,019 shares issued and
outstanding at June 30, 2023 and December 31, 2022
403
403
Additional paid-in capital
45,141
42,727
Retained earnings
1,205,654
1,205,885
Non-controlling interest
61
66
Total stockholders' equity
1,251,465
1,249,287
Total liabilities and stockholders’
equity
$
3,532,639
$
3,239,591
Condensed Consolidated
Statements of Income (unaudited)
Three Months Ended
Six Months Ended June
30,
(in thousands, except per share
amounts)
Jun 30, 2023
Mar 31, 2023
2023
2022
Revenue
Loan origination fees and gain on sale of
loans, net
$
136,925
$
92,651
$
229,576
$
450,611
Gain on reverse mortgage loans held for
investment
2,306
—
2,306
—
Loan servicing and other fees
60,211
60,087
120,298
107,772
Valuation adjustment of mortgage servicing
rights
27,890
(54,871
)
(26,981
)
205,675
Interest income
26,584
18,245
44,829
30,086
Interest expense
(17,329
)
(12,262
)
(29,591
)
(25,087
)
Other income, net
224
35
259
242
Net revenue
236,811
103,885
340,696
769,299
Expenses
Salaries, incentive compensation and
benefits
144,903
111,120
256,023
365,521
General and administrative
20,448
20,883
41,331
741
Occupancy, equipment and communication
18,402
17,430
35,832
37,285
Depreciation and amortization
3,661
3,738
7,399
7,721
Provision for foreclosure losses
(1,044
)
1,514
470
1,475
Total expenses
186,370
154,685
341,055
412,743
Income (loss) before income tax expense
(benefit)
50,441
(50,800
)
(359
)
356,556
Income tax expense (benefit)
13,505
(13,605
)
(100
)
90,294
Net income (loss)
36,936
(37,195
)
(259
)
266,262
Net income (loss) income attributable to
non-controlling interest
—
(5
)
(5
)
32
Net income (loss) attributable to
Guild
$
36,936
$
(37,190
)
$
(254
)
$
266,230
Net income (loss) per share attributable
to Class A and Class B Common Stock:
Basic
$
0.61
$
(0.61
)
$
—
$
4.36
Diluted
$
0.60
$
(0.61
)
$
—
$
4.31
Weighted average shares outstanding of
Class A and Class B Common Stock:
Basic
60,962
60,900
60,931
61,060
Diluted
61,801
60,900
60,931
61,779
Key Performance Indicators
Management reviews several key performance indicators to
evaluate our business results, measure our performance and identify
trends to inform our business decisions. Summary data for these key
performance indicators is listed below.
Three Months Ended
Six Months Ended June
30,
($ and units in thousands)
Jun 30, 2023
Mar 31, 2023
2023
2022
Origination Data
$ Total in-house origination(1)
$
4,458,502
$
2,701,426
$
7,159,928
$
11,783,484
# Total in-house origination
13
9
22
37
$ Retail forward in-house origination
$
4,125,328
$
2,558,801
$
6,684,129
$
11,318,089
# Retail forward in-house origination
12
8
20
35
$ Retail reverse in-house origination
$
7,858
$
—
$
7,858
$
—
# Retail reverse in-house origination
—
—
—
—
$ Retail brokered origination(2)
$
64,240
$
41,704
$
105,944
$
118,370
$ Wholesale reverse origination
$
26,603
$
—
$
26,603
$
—
Total originations
$
4,549,345
$
2,743,130
$
7,292,475
$
11,901,854
Gain on sale margin (bps)(3)
310
343
323
382
Pull-through adjusted locked volume(4)
$
4,362,354
$
3,258,998
$
7,675,669
$
12,997,291
Gain on sale margin on pull-through
adjusted locked volume (bps)(5)
314
284
299
347
Purchase recapture rate(6)
27
%
24
%
28
%
31
%
Refinance recapture rate(7)
22
%
30
%
26
%
50
%
Purchase origination %
94
%
92
%
93
%
75
%
Servicing Data
UPB (period end)(8)
$
82,030,408
$
79,916,577
$
82,030,408
$
75,856,564
_______________________
(1)
Includes retail forward, correspondent and retail reverse and
excludes wholesale reverse and brokered loans.
(2)
Brokered loans are defined as loans we
originate in the retail channel that are processed by us but
underwritten and closed by another lender. These loans are
typically for products we choose not to offer in-house.
(3)
Represents loan origination fees and gain
on sale of loans, net, including the fair value adjustment of
reverse mortgage loans, divided by total originations, excluding
brokered loans, to derive basis points.
(4)
Pull-through adjusted locked volume is
equal to total locked volume, which excludes reverse loans,
multiplied by pull-through rates of 85.4%, 84.0% and 92.7% as of
June 30, 2023, March 31, 2023 and June 30, 2022, respectively. We
estimate the pull-through rate based on changes in pricing and
actual borrower behavior using a historical analysis of loan
closing data and “fallout” data with respect to the number of
commitments that have historically remained unexercised. The
decrease from the prior quarter is primarily due to reassessing our
assumptions within the valuation model and is not indicative of a
change in our operations.
(5)
Represents loan origination fees and gain
on sale of loans, net divided by pull-through adjusted locked
volume.
(6)
Purchase recapture rate is calculated as
the ratio of (i) UPB of our clients that originated a new mortgage
with us for the purchase of a home in a given period, to (ii) total
UPB of our clients that paid off their existing mortgage as a
result of selling their home in a given period.
(7)
Refinance recapture rate is calculated as
the ratio of (i) UPB of our clients that originated a new mortgage
loan for the purpose of refinancing an existing mortgage with us in
a given period, to (ii) total UPB of our clients that paid off
their existing mortgage as a result of refinancing their home in
the same period.
(8)
Excludes subserviced portfolio of $34.5
million as of June 30, 2023.
GAAP to Non-GAAP
Reconciliations
Reconciliation of Net Income
(Loss) to Adjusted Net Income (Loss) (unaudited)
Three Months Ended
Six Months Ended June
30,
(in millions, except per share
amounts)
Jun 30, 2023
Mar 31, 2023
2023
2022
Net income (loss)
$
36.9
$
(37.2
)
$
(0.3
)
$
266.3
Net income (loss) attributable to
non-controlling interest(1)
—
—
—
—
Net income (loss) attributable to
Guild
$
36.9
$
(37.2
)
$
(0.3
)
$
266.2
Add adjustments:
Change in fair value of MSRs due to model
inputs and assumption
(43.8
)
43.7
(0.1
)
(256.4
)
Change in fair value of contingent
liabilities, net due to acquisitions
1.3
—
1.2
(45.4
)
Amortization of acquired intangible
assets
2.0
2.0
4.0
4.0
Stock-based compensation
2.3
1.8
4.1
3.0
Tax impact of adjustments(2)
10.2
(12.7
)
(2.6
)
74.6
Adjusted Net Income (Loss)
$
9.0
$
(2.5
)
$
6.4
$
46.0
Weighted average shares outstanding of
Class A and Class B Common Stock
61
61
61
61
Earnings (loss) per share
$
0.61
$
(0.61
)
$
—
$
4.36
Adjusted earnings (loss) per share
$
0.15
$
(0.04
)
$
0.10
$
0.75
_________________________ Amounts may not
foot due to rounding
(1)
Net income (loss) attributable to
non-controlling interest was $0, $(5) thousand, $(5) thousand and
$32 thousand for the three months ended June 30, 2023 and March 31,
2023 and the six months ended June 30, 2023 and 2022,
respectively.
(2)
Estimated effective tax rate used was
26.8%, 26.8%, 28.0% and 25.3% for the three months ended June 30,
2023 and March 31, 2023 and the six months ended June 30, 2023 and
2022, respectively.
Reconciliation of Net Income
(Loss) to Adjusted EBITDA
(unaudited)
Three Months Ended
Six Months Ended June
30,
(in millions)
Jun 30, 2023
Mar 31, 2023
2023
2022
Net income (loss)
$
36.9
$
(37.2
)
$
(0.3
)
$
266.3
Add adjustments:
Interest expense on non-funding debt
2.6
2.8
5.4
3.2
Income tax expense (benefit)
13.5
(13.6
)
(0.1
)
90.3
Depreciation and amortization
3.7
3.7
7.4
7.7
Change in fair value of MSRs due to model
inputs and assumptions
(43.8
)
43.7
(0.1
)
(256.4
)
Change in fair value of contingent
liabilities, net due to acquisitions
1.3
—
1.2
(45.4
)
Stock-based compensation
2.3
1.8
4.1
3.0
Adjusted EBITDA
$
16.5
$
1.1
$
17.7
$
68.6
Reconciliation of Return on
Equity to Adjusted Return on Equity
(unaudited)
Three Months Ended
Six Months Ended June
30,
($ in millions)
Jun 30, 2023
Mar 31, 2023
2023
2022
Income Statement Data:
Net income (loss) attributable to
Guild
$
36.9
$
(37.2
)
$
(0.3
)
$
266.2
Adjusted net income (loss)
$
9.0
$
(2.5
)
$
6.4
$
46.0
Average stockholders’ equity
$
1,232.4
$
1,231.3
$
1,250.4
$
1,053.9
Return on Equity
12.0
%
(12.1
)%
—
%
50.5
%
Adjusted Return on Equity
2.9
%
(0.8
)%
1.0
%
8.7
%
Reconciliation of Book Value
Per Share to Tangible Net Book Value Per Share
(unaudited)
(in millions, except per share
amounts)
June 30, 2023
December 31, 2022
Total stockholders' equity
$
1,251.5
$
1,249.3
Adjustments:
Intangible assets, net
(29.1
)
(33.1
)
Goodwill
(184.9
)
(176.8
)
Tangible common equity
$
1,037.5
$
1,039.4
Ending shares of Class A and Class B
common stock outstanding
61
61
Book value per share
$
20.52
$
20.51
Tangible net book value per
share(1)
$
17.01
$
17.06
_________________________ (1)
Tangible net book value per share uses the
same denominator as book value per share.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230803259751/en/
Investors:
investors@guildmortgage.net 858-956-5130
Media: Melissa Rue Nuffer,
Smith, Tucker mkr@nstpr.com 619-296-0605 Ext. 247
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