Earnings call transcript Q1 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, ladies and gentlemen, and welcome to the Guild Holdings Company First Quarter 2023 Earnings Conference Call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this call will be recorded.

I would now like to turn the conference over to Investor Relations. ahead. go Please

Nikki Sacks

good and Thank afternoon, you, everyone.

described or for begin, that to other XX-K may expressed other those everyone we in regarding implied are greater company's are financial based to These a factors company's U.S. the industry certain results of from remind on this forward-looking the for Factors due performance and operating filed expectations. and by like on comments reports the expected periods materially conference statements differ statements and trends. Before statements and forward-looking under I'd Exchange or number risks that Risk in section future current Commission. in detail call these Actual with Securities XX-Q titled the contain and Form may periods future Guild's

Additionally, Reconciliations measures. Investor and GAAP our non-GAAP the today today's of their Relations to can with non-GAAP earnings be will remarks corresponding certain on Guild's to in also available found furnished measures measures financial website. refer release are financial SEC

Officer, to like Executive to Chief Ann? Ann McGarry. call Mary over I'd turn the Now Mary

Mary Ann McGarry

Thank President, Officer, us. Schmidt; by Good joined Today, Chief for our you, you joining I'm afternoon, everyone, and Financial Amber Nikki. Kramer. and Terry thank

David us our prepared Our Neylan, remarks. will Chief for Operating Officer, join Q&A after

fourth billion the Our total in in-house line were the compared of with $X.X $X in we first billion generated of results first loan quarter our XXXX. expectations. quarter, In to originations quarter

to While our plan. execute market we these and share on rising rates limited inventories, results a gain we continue of reflect challenging backdrop growth as

estimate Bankers to compared XX% of was Mortgage business purchase from volume XX%. origination Association Our the

all purchase we earnings across more rate consistency and the By in durable long-term market focusing our on Additionally, our see cycles. built model relationships more sustainable believe business, cycles and interest on are in is communities.

Our rates. focus also along recapture with on strong platform, our service, supports customer servicing

unpaid sold total for quarter purchase we first in For recapture of rights of fees. XX%, retention servicing was related with driving of levels quarter the XX% XXXX, the growth and retained loans strong and balance in our first XXXX, rate ongoing

pleased the Guild are housing market constraints volume in continue uptick taken position share. to to April. can't the control we supply, grow We an And we steps to to while have see on in

and During effectively growth quarter subsequently, we the on our been executing have strategy.

recent integrated the growth, discuss, drive and that organic acquisitions are building the and additional as and With our gaining ramp. to market expansion anticipate we continue to are Terry fully share we acquisitions further foundation will

platform, We our acquisitions position. product have our and differentiated further a and bolster offerings

to integrate acquisitions, enhanced to productivity. expect continue recent our realize we we As

our compelling to we we In for attractive of continues environment addition, pipeline opportunities grow. window provides current disciplined, the a growth. while will external And believe remain

our of longevity Since people. and strong focus with customer company culture, due on relationships, tremendous offering in be take Before been succession, call deliver combination balanced shareholder strong to a has not solutions and I value. on technology talented is our created management will our and turning we have the our our be could more and growth over model, delivered We have to we incredible an product is disclosed moment to to Guild effective want a business unique. a and financing Terry, returns which It of ongoing creative previously management have and performance, buyout our platform to accomplished on XXXX, needs. foundation believe the what to for growth we X. July journey consistent comment customers' I and culture proud Guild,

with decades, to with Neylan I us of I'm the for Terry since Board almost worked on remain and have and very XXXX. team the confident will in and Schmidt's David COO. before President four together to I Terry Directors, the the management CEO David promotion and day company has been that leading will as buyout in day and be

transition team delivering the hard mission As thank neighborhoods I and be And I United communities certain of a executing want States. entire the across on the seamless. their promise in to our the work for of will and home a am Guild result, commitment to Terry?

Terry Schmidt

Mary Ann. over you Thank years. I start by you, gratitude will leadership vision, my and expressing your for partnership to the

I'm have buyout You certainly excited expectation the even Where our has we the more ongoing opportunity about that ago, a platform. are as established than completed continue to had to culture been XX today we our management we I any success. when years foundational exceeded and leverage incredible more

should a a to cycles long and our flight in and given beneficiary, beginning through Broader quality successful history market XXXX. be market driving net are Guild disruptions numerous

across Guild's in of reach goals platform, extend geographic markets. share increase and the our scalable our is One to key country our leverage

During the and completed we added district of new subsequently, first quarter two officers. a loan and acquisitions

in to Guild disclosed the to we As Texas the Arizona, Colorado, states previously growth of in increasing Mexico, according Guild the share CoreLogic addition with the where Legacy February, purchase and platform, data. number operations of now in Mortgage the added high New their presence mortgages has of Southwest our two

experience retail also successfully XX-year of another network. customer Guild and cycles Guild. example Mortgage with Creek Creek business synergistic a In Cherry to strategy through history Cherry Creek April, of relationships. its managing is on Cherry acquisition, complementary and bringing to multiple we added to a retail has a focusing a our similar

retail from our first more comprehensive now integrating serve reverse more mortgages, our into the with opportunity a to will in additional industry time customers have many reverse has years. platform, to customers product the and By through the owners a branches offerings to mortgage leadership focused aligning states, immediate we our Furthermore, life traditional that in believe team reverse to our for our has Creek home XX customers. team We scale. acquisition and of having ability and Cherry mortgages for continue strengthen been service now XX strong mortgages provides Cherry offering their us for on reverse offer the With underserved securitize Creek help products strategy.

our California buyers was home district the a employees April, they with throughout of new XXXX, excited an Guild the grew addition estimated also region. up serve footprint are branch In made million group’s $XXX joined XX have This production to of organically we offices our in and new eight team. and we in

loan across Following approximately Guild serving XXX states. more than edition, customers has officers X,XXX branches this in XX

as As we position fourth grew Mary In volume total in Ann did to focused and leveraging Guild’s captured higher market mentioned, platform the to loan of continue a on network to to the first accelerate the percentage quarter. share we quarter, and grow are normalizes. as market officers laser market than continue of share we growth origination we the ourselves industry to

stability balanced recent will to should by profitable model through and for uncertainty, and We allow as be opportunities the our volume macro balance the to We manage do the are pressures growth to but the drive encouraged in this provides continue take of servicing April, believe advantage they originations management and uptick our over anticipate near-term. ongoing of while business discipline us liquidity sheet, there arise in long-term.

the the Officer, Amber? to turn now I’ll in discuss call Financial over financials our Amber detail. more Chief to

Amber Kramer

Terry. Thank you,

focus comparisons. practice, standard As is comments our will on quarter sequential my

million revenue to $X.X of the diluted originations generated total compared For $X and we Net to totaled generated loan million $X.XX of fourth $XXX share. quarter we or quarter. the a billion of net billion $XX million prior $XXX compared loss in per first in the XXXX quarter in-house

valuation quarter. or to was $X.X of The $X.XX fourth value Adjusted was adjusted exclude net million assumptions share, fair to $XX while charge positive loss figures the in a the a prior due MSRs a $X.X a EBITDA $XX million change million adjusted in for million. quarter negative compared

our Focusing Origination on segment.

Our in compared up the quarter. the $X.X with the basis in first quarter totaled sale came to quarter, we from billion gain Pull-through at in billion XXX basis locked fourth margin the adjusted volume uptick. prior and $X.X on are points points pleased XXX in

locked expected to basis for of creates volume impact volume sale on Our pull-through increase points XXX on prior in originations on in volume and gain over adjusted on was is sale future on negative up points basis margin XX% adjusted gain The indicative gain a not compared XXX timing pull-through margins. sale quarter. the pull-through adjusted

sale, business believe given Guild market broader have the and sustainable we continued on performance originations focus retail loans gain Guild’s both While durable remain results in relative across and balanced focuses cycles. the this on we on We originate. which pressure in of positioning our and model, servicing industry seen confident more

well We are the is in starting excess capacity levels. as as and near-term depend as see on some to will continued anticipate and stabilization inventory broader trends contracted, spread pressure improvement market rate further but

rate decreases. the For our $XX $XX primarily value versus million adjustments in a million rights segment, due company’s earnings prior Servicing $XXX,XXX servicing the loss the to fair first to net slight quarter of to quarter due mortgage in downward we of reported

in Our and a loans us to to balance continue our and sheet in quality consist remains the high assets disciplined and strong our manner, with growth MSRs. primarily provides flexibility of invest

liquidity. to Turning

As base cash unutilized while of $XXX March line based million on was loan and equivalents servicing XX, cash totaled credit committed limitations. $XXX the total and and funding mortgage of capacity totaled billion $X.X unutilized rights amounts million, borrowing

debt, divided was defined X.Xx. ratio leverage Our tangible including as total funding secured by equity stockholders

uncertain efficiently continue while We managing best financial deploy prudence. way on capital times to the through focus to with

us to Our a the deploy and shareholder sheet drive strategically invest manner enables strong to growth and and in time. discipline over in capital balance liquidity business value

at of XX,XXX average share. approximately $XX.XX repurchased $XX.XX, price value an Book $XX.XX. share the was tangible we quarter, the share end first value per of the book During shares was quarter at while per per stock

capital on successfully business model done that they organic our addition, complement opportunities M&A should our position firm’s differentiated and strategic we In history. growth capitalizing as have arise throughout facilitates our

generated billion In have adjusted loan of April, volume. and locked of we pull-through $X.X $X.X originations billion

of quarter, to As the continue more conditions the we XXXX. through market anticipate last we first challenging current half noted

as improve. cycle, additional potential through opportunities, our growth us conditions seeking including on out which As we to progress over position this market should will time acquisitions, Guild accelerate focus

being We sheet, growth and as have moderate, supply a of support a platform, well-positioned to continues anticipate the of our which activity. we purchase will beneficiary balanced

questions. that, with we’ll open call And the for up Operator?

Operator

with question first Instructions] Fargo. Don [Operator from Wells will come Our Fandetti

You ahead. may go now

Don Fandetti

for guess higher. Mary are April mean, the David. about and number think definitely and looked gain you thinking lock. I lower Can Hi. January that you Congratulations seeing? much you pull-through I and in the why talk sale, Amber, to were on low Ann Terry expecting and I than on and accounting is the provided we what question a in

Amber Kramer

Sure.

originations pull-through So, as therefore volume. over is the up adjusted sales and locked the noted XX% I

can earnings we at first QX time So sale. get not the a timing there of this uptick It’s is you get last going QX pretty in call in and don’t can as you for loss the provide QX much change. to That’s from QX to continuing considered I just that’s guidance. into quarter difference will about backwards. we start execution and you see loan in if to I that volume going see, in exclude an typical the quarter-over-quarter we see say and historically that of But numbers on we’re that flat QX, really we’re that much not talked adjustment what

as I because of would And that and think but the timing that so, we’re difference. the not really we versus on the focus there’s pickup But sale, I pull-through originations gain adjusted some sale seeing yet. on gain on noted, volume quite on stabilization, more locked

Don Fandetti

And G&A, through. I of run bit about there? can Okay. had a talk two you’ve acquisitions know you little sort rate the flowing

Amber Kramer

we’re just since slight costs up variables. at that our And than are And would is had there a personnel and big as you changes we in other the their no that. Yes. overall ramp XX% brought accordingly. monitor The as and QX, continuing looking acquisitions About changes making volume volume of cost some in on. overall is have to impact –

and too. we’re acquisitions So run picking up what volume on the ramp is the other rate then over fixed time will of cost up just the

Don Fandetti

it. Got Thanks.

Operator

Joseph will Our next from question Jefferies. come with Kyle

You ahead. may now go

Kyle Joseph

Thanks afternoon. my taking questions. Good for

been the follow-up Just the capacity acquired, forward? on be – very M&A regarding California us when to know those some guys your you you in sense going can would leverage Cherry to and And you give guys active close then, that then and Creek I have any space. are a impacts for expected profile? team

Terry Schmidt

year volume closed so billion. Creek Xrd, officially group million, April Sure, about – the Cherry that. And California last $XXX the the I’ll Creek, for has they group we onboarded group and the $X.X closed. a million California about on and funded about $XXX month answer On Cherry it ago

Amber Kramer

anything. can I just terms not in the Kyle, swing going It’s of our profile. leverage And to answer question

that’ll line us volume, strong position, as a overall going so have it’s we’re more use keep the We strong in sheet that are and balance that those there and see share, our borrow And the then bottom – out overall going in can for revenue. we’re still have the on growth organic we’re keeping to really increasing there’s sheet our to we, to to just significantly flow be acquisitions with terms and just capitalize market to you and same capital to able sheet ability and think and planning balance opportunities positions we opportunities. to be strong our balance of a

Terry Schmidt

keep going year. Yes. We still active this very pipeline executing have to strategy our and a we’re on

Kyle Joseph

hedging as makes just that, the No, in in not about world. potentially think that? obviously originations all sense How Yes. come terms the have guys in then, as selling business the any originations thoughts you down. UPB And versus the of environment potentially we of that about balancing has grown kind surprisingly and do this UPB, think like MSRs

Amber Kramer

and WAC our seeing is. breakeven. And net at in on is portfolio strong as our we’re portfolio servicing to we our look itself profile the where our risk with which hedge do now to about about think right and really our overall natural portfolio originations compared originations adjusted as a you’re a that are what ensure where income We our and position

strong asset on with portfolio WAC. a low have a servicing We our

cash we need there’s And And and we’ve so our is and has to officers loan risk balance great programs don’t have believe clients our sheet well. don’t continue a for so which for we as MSRs. been add strategy sell portfolio, our that managed strong to we proposition value to well, the recapture to because life

plans so. right to now have do don’t any so we And

Terry Schmidt

we rate rate the retail is note all the par But on time officers our portfolio. group only got year definitely recapture to been Amber’s it, that. The that, that built refinanceable. we’ve the channel, loan of the at we’ve on current looking boots this the stack we’ve if a and the point, may we’ve the at And right coupon on be that since refinance X.X% manage smaller to to got to successful really how through Yes. is a that recapture coupon now ground, from it’s can all we’re the that if

against thing We to really hedged we’ve we the to the that’s been and in future. sell we’ve way the the nice is so. to MSR can But right? it. have so needed do continue And if can we planned options, borrow We

needed can our outlets with release We've change sticking into more strategy. so we tap got But – we and service So can the products. strategy we're multiple that have we we if to far.

Kyle Joseph

my it that’s it, Thanks me. Got for a lot answering questions. for

Operator

Point. question next Bologna will with Our Compass come from Giuliano

may You go now ahead.

Giuliano Bologna

some XQ execution. even way on the Congratulations that of over margin. some XQ continued that to I'd the realize closing operating impact kind impact there's acquisitions a be you thing and curious think also one the already, if XQ quarters. beyond of during and the to on and the about of few is the I'd process impacts expenses are about during related this in on sale potential next gain be curious also I strong touched of on acquisitions the and And –

Amber Kramer

The impact is minimal.

you the adjusted net think about breakeven speaking, be if acquisition. our generally negative income, look at $X.X million, I at we'd without

that. is So revenue what being what earlier huge you the expense I on see it's on not There's expenses, with overall can still to the materially sale, flat on and said – change sale side. impact from seeing. a gain And no the I gain the we're

Giuliano Bologna

then… That’s great. And

Amber Kramer

starting we've we've companies net XX would – a is profit. recouped that had. XX, they've to I look And type any of we in way at say between we that acquiring month this they're month expense and – that we're by six, turn when that the is expect these they're

so if what expect as And on that of acquisitions these kind well, we helps. that's

Giuliano Bologna

And about That's then the very forward. helpful. strategy thinking going

to curious you've incredible – markets you any and So are some kind fill underpenetrated might a have looking geographies perspective? obviously are Or still expanding at there done point? that through within an be untapped job of be the in M&A expanding I'd large from are this where U.S. share markets you market if left

Terry Schmidt

a Yes. states very we – that of still in There the we're not states top don't we and that are much five. have lot don't some have

where – we we're York, in of the any any state outside are So where New not interested in area five expanding. top

the to opportunity So and so in There's we've love the lot that continue to the a much Midwest. there South got we'd well. as in Southeast expand

Giuliano Bologna

great. That’s Thank back jump And you I’ll the very much. in queue.

Operator

Instructions] next Brian Securities. from Our Wedbush with [Operator question will come Violino

now may go You ahead.

Brian Violino

question. my taking for Thanks

you sort is interested guess, specifically, guess, expanded out that And one What associated of got into getting any quick existing getting to business mortgage there reverse on could just a time what Just frame branches? of I with I you mortgage? the that reverse looks in your opportunity kind ramp-up like?

Terry Schmidt

year, a reputation. focus but – opportunity retail Last They've some get years, about XX the we and with think industry probably years, the without growing that they're of footprint. we Creek into at our have this areas a end to – they've QX there's wanted we're Cherry we on. we expand last other business. – executives just that looking And $XXX lot in own retail operationally, expanding reverse. for been been already got other in great us, can year, they and footprint. just been to our start the that dramatically. it I came And XX-plus of in to have But would to did million, we Last QX, say continue

there. So there's that we of believe a opportunity lot

Mary Ann McGarry

homes coupon what that with as this low will for and people average we ownership. would way, product is become want home, their home their see in well this is as to which a provide their demand more is as I reverse can stay Ann, that And stay population. weighted portfolio, equity tap you in add this we in help have our they aging Yes, vision what such in an is our – in into Mary mortgage

for lever And going to we a strong So outlook, we pull another outlet, customers. think be another our future there's with can that's future, ahead good mortgages. reverse an a

Brian Violino

you. thank Great,

Operator

like concludes for Ann McGarry turn back any the question-and-answer Mary This I session. our remarks. conference to over to would closing

Mary Ann McGarry

Thank a forward you. next evening, look our you, call. Thank to us everyone, great updating and have on joining for you today. And we

Operator

The you attending Thank for conference concluded. has today's presentation. now

now disconnect. may You

Guild (GHLD) 8 May 232023 Q1 Earnings call transcript