Earnings call transcript Q2 2023

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Guild Holdings Company Second 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.

As a reminder, this call is being recorded.

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

Unidentified Company Representative

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 US 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 and 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 our

Additionally Reconciliations measures. Investor and GAAP our non-GAAP the today today's of the 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

Executive like I'd Chief over to Terry Schmidt. the Terry? call now, to turn And Officer,

Terry Schmidt

conducting you. CEO first David everyone, Good you be thank joining earnings I well as President as Thank Neylan Officer, am joined to Kramer. pleased call Financial and us. as by be Amber and very COO to for our afternoon, my and Chief our

further with platform. expectations quarter. of share we our as first scale we our line strategy reflected accelerated total in in were up billion, grow $X.X origination continued results from in-house results our market with quarter loan second $X.X as Our These to the production billion

margins. organic interest putting Broader challenges this limited inventory, rates through persist production industry the due is our and growth external strategy. higher achieving industry on and which We and home volume to pressure successful execution are of

long-term brand us we have we achieve the our several it's the been well-positioned stronger However, than are to that historically is mortgage believe helped targets. ever industry within given Guild and factors

industry. closed volume benefit for compared the the from the purchase originated origination loan we purchase perspective, growth innovative organic our in want even housing XX% our new the matter provide Mortgage homes market. estimate buyers. on In of business what meet we from the people needs more of quarter, continues of second an From happening Association focus them into Bankers to to keep No XX% market, Guild the products is and get also to to there. we help

network key referral Additionally, our continuing of organic their to to our officers growth partners. and is expand loan

increase in to estimated July combined according contributed our origination quarter-over-quarter attributes volume XX% these the as of have of the to compared forecast. evidenced to All share industry MBA the continued gains XX% at

In non-organic grow Guild terms both markets new and to selective with in by acquisitions growth, continues entering of and existing expansions. team ones

to which beginning ramp the quarters. We recent our on have begin and most toward Guild three integrating transactions, are platform focused up originations should in upcoming contribute the to on higher

other The model is in-house Guild's two serves which purposes. our key servicing platform, distinctive element of

customers XX% for continued sold quarter loans both rate. income as fee provides of rights servicing is cash we continuing it our provides second, channel which And balanced Guild client a us flow mortgage with XXXX. well of the in it to This recurring the interaction second through reliable the to business our and delivers First, for model, positions recapture retain lifecycle. our extend total cycles. grow as strong servicing supporting

platform. businesses us the to reputation years, position, add of our in to in as business pursuit several which prioritized sheet and partner. liquidity ongoing opportunities additional also has Guild supports recent strong grown a which continued growth the the believe And our will opportunistic engaged a create opportunities. additional Guild have We acquisitions maintaining valued balance we muted environment smaller has origination for

Board balance return tool to of sheet our the another Board Furthermore, initiatives, capital is shareholders supporting form this value addition of create by to strong selective return and acquisitions. share The special the our Directors believes a the to dividend. decision and beyond growth to repurchases enabled to in in recent shareholders

continues rising Although, same progress pressures for inventories, several the the by been to our remain tight many share. have face and quarters related market rates we to ability discussing encouraged I of market our and home continued to gain

factors top market we producing We in positioning gains in confident and XXXX. will we share to accelerated market have stabilize, once our believe on that discussed again are the continues of given the that the as realize been I growth

I'll now David? turn President call the over Neylan. to and David COO, our

David Neylan

also navigate to the loan ownership. effectively Terry products those we including elevate mentioned, for removing providing buyers, more on have we We at home the the officers needs remain aimed while meet of barriers to to focused environment, current continue As even continued to brand. Guild our

traditional rolled example, in to alternative advantage borrower X% payment conventional for requires the only For bring down we This out product down the X% as an payment programs. the required program June. X% to in

by solution to more attainable a today's housing of market or would recently allows purchase These relationships homebuyers to a who in Guild's create rural special also loans an officers helping rural a ownership largest by home the make in during them to recognized residence provide guaranteed loans as challenging defined financing as programs lender otherwise Such were top housing originator for We customers USDA. find being loan deep like live to areas and USDA second nationally. primary opportunities with in environment.

reverse through which our Mortgage we recent meaningfully Additionally operational. Creek expanded now fully of acquisition is business Cherry our mortgage

is team customers. products mortgages, aligning provide their to it Guild more for being Importantly, through homeowners a enables reverse being our to rolled strategy. with for offering comprehensive includes and able first-time out Customer retail underserved on to opportunity This across entire focused the have well Life now platform and the our

sets believe in-house apart. are market regard and through service an with difference us what business balanced Having our is makes With the our Guild we customer provides agents model to business, cycles. servicing platform stability that employees

to and position and share We loan to successfully the are continuing Guild's continue accelerate to market normalizes. business market leverage as the platform to officers growth grow network of

desirable to as Guild to We prove prospects, be which pipeline a continue to have potential a partner. of continues growth we expand

marked The current beneficiary. with a additional is Guild's quality are by environment rising a and flight creating reputation to we opportunities

We future disciplined should in business our but drive growth. growth opportunities, encouraged our will for earnings expand are approach, prospects and us to the which share scale by securing allow remain to our continue to

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

Amber Kramer

David. Thank you,

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

Net second million million compared in net of and the the generated million quarter income in of in net prior the XXXX, quarter For totaled to billion $X.X of quarter. of and billion a loss compared generated we revenue $X.X the to $XXX the million first compared $XXX to in-house first pleased with quarter $XX uptick. originations we loan $XX total we are

per Adjusted On diluted $X $X.XX a per share income million $X.XX was our or share. net and EBITDA basis, was million. was per net $XX adjusted share income

our XXX in to origination on points Focusing quarter. compared Pull-through at margin first basis in segment, the prior in basis our $X.X in totaled quarter. compared sale on to came second adjusted the XXX points billion $X.X the quarter billion volume gain lock

gain XXX adjusted Our compared current XXX are volume basis reflects the The in on lock points with was prior sale gain on quarter. market environment. sale on points margins competition line to the pull-through in the margin and basis

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

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

our reported net Servicing balance up loss quarter-over-quarter the $XX of from the unpaid income in net billion. segment, in quarter $XXX,XXX we with servicing portfolio million, increase $XX a our to For first of X% the

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

liquidity. to Turning

million. funding capacity based equivalents the rights was and $XXX borrowing credit while mortgage of unutilized cash amounts As $XXX total million totaled limitations. line cash million June $XXX at unutilized and committed XX And remained on loan base of servicing

as defined times. Book tangible the net per the value book equity value share end share X.X while at by funding per divided was debt of ratio $XX.XX. stockholders' was secured leverage Our including tangible quarter total was $XX.XX,

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

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

second we an share. During XX,XXX stock average at of per shares price quarter, approximately the $XX.XX repurchased

August on per seven $X.XX special Terry XX, The be on our paid payable to of declared and of mentioned of As XXXX. a shareholders record dividend. Board share will XXXX September Directors dividend

mortgage originations generated again In $X.X approximately have of adjusted and $X.X volume. more loan July, billion we Industry current picked pull-through maintaining rates conditions. the challenging market have up of billion lock

to continue focus with as as acquisitions. selective potential meet through services and products gaining serving well on We homebuyers share their needs that

with the which And we as that beneficiary up to a And open call growth platform. sheet moderate of have supply balance we'll activity. We our well-positioned the questions. support will continues Operator? for purchase anticipate of a being

Operator

first Thank Jefferies. Derek comes you. Instructions] question from of Our [Operator Sommers

Derek Sommers

everyone. afternoon, Good Hi.

past where mix been made an acquisitions public Just has going geographic quarter. kind provide the was trending could activity and wondering of given you since have you guys on in the if update your

Terry Schmidt

our Cherry volume or Creek national the -- Mexico those we Cherry top last increased New Wisconsin now. we're in percentage and hasn't a -- one the in some share Colorado Mexico in good market three strong in Mexico. been but Creek market really share and changed market And in it our top is but locations increase X for share. gaining and we're nationally five in the share Well Wisconsin in we're the haven't overall the But we're in Wisconsin in and four market biggest specific New those number

Derek Sommers

Got then regards to just it. the And on special dividend. Thanks.

been running have equity times. kind ratio guys debt on X.X about to a You of of non-funding

there in With forward? target any the change leverage meaningful moving the is dividend

Desiree Kramer

mentioned ability currently distribution low accumulated and a for very see dividend over borrow to assessing cash our for on years. additional have constantly as we as position. the of And our needs cetera. leveraged earnings this do We're couple and the growth current We forecasted last MSR et cash are dividend you

it and our dividend are that where might at cash we're see in change look we'll so we September. doing the And given slightly position total

Derek Sommers

That's for it. Got quarter. me. all great It's a Okay.

Terry Schmidt

you. Thank

Operator

Melissa JPMorgan. The next question comes from of Wedel

Melissa Wedel

Thanks on for taking today. my I'm Rick. for afternoon. Good questions

on driven volumes. makes your certainly Just wanted significant up follow that being share Right comments now sense. to about by purchase

seems since at the half ever looking the year. back like we're it mortgage of So higher rates

circle sort months? shift six for next you're help in the next year of you but do over market off, the you market of also purchase you're on you're us or positioned you. Thank what terms to the that mix square the a looking how rates about how come Can that? XX thinking in And different for have as potentially into on view that

Terry Schmidt

really seeing as I issues units through real say that going to mean short it's to next And future. the healthy a because million estate the we're purchase for we're would inventory real of market over the year, at near industry estate four environment still be far I very tight transactions. be the as

going to get take balance back. to it's several So that years

designed we And home. that that we're are buyer focusing keep home a first-time to additional really that going get purchase nichey-type on adding business products capture so by more can how into of just to

purchase continued continued going direction. to and keep executing keep our and we're to we've And to so for that be industry. we're just the and above And the have working to stay MBA plan that above on well in strategy

David Neylan

well Yes. activity well. as mention and growth it's to we're are I on think in M&A that focused And our really business as very excelling similar with companies our purchase that important

they're So share because meaningful internally M&A we'll on to some the have purchase we're focused both also able do been recruitment, the like just but very continue And we of through to that. business. grow market through activity

Melissa Wedel

You just you. answered my follow-up question. Thank

David Neylan

you. Thank

Operator

of The Compass Point. comes next Bologna from question Giuliano

Giuliano Bologna

of would the of good acquisitions about back mentioned you on I those if obviously integration another here. be would to getting done your back a thing perspective obviously where you I quarter number stand And operationally. transactions. you've be on curious Congrats One acquisitions? curious on

that want want would acquisitions you transactions? hold around Are digest more you integration and midsized to while the point, at this execution a looking or or little for much smaller off to you tuck-ins temporarily last them have

Terry Schmidt

onboarded -- speed. actively the Cherry still days within going acquisitions. We're XXX we XXX board. And came they full the And in Creek pursuing on they're on pretty first in employees good they're took day almost XX

better these at So it's every gotten integrating we've them. of one

more of is it size. adding value be So, add about rather than it work types the the to more to we're company going these really is of continuing size comfortable to towards the what acquisitions. And matters

So importantly footprint products fit? big of the in? really are they they culture, kind What they What are does culture purchase a do do? shop? And more

Giuliano Bologna

most That thinking of be -- then obviously a to curious a your sounds sense that the capital about the transactions. quarter. good. capital be a opportunities? near you kind in allocation paying the I a capital about special From curious get this not are given I are transactions capital return of but intensive framework think M&A there's And would your versus for allocation term lot of when -- realize you dividend I'd perspective,

Amber Kramer

business to our invest at as needs at our growth looking operational shareholder cash and investing capital having value well. while always we're we're position, in enough in returning When our looking cash

this as years you then and earnings done the last of distribution since as haven't accumulated mentioned dividend see know And as a XXXX. a do couple we over dividend we I

our of we leverage and shareholder do and create because we both sheet value. our the balance So, ability long-term both that have strong low believe to

Giuliano Bologna

Thank in queue. back jump the great. you I much will That's and so

Operator

Thank Brian comes question Securities. you. Violino Wedbush [Operator of Instructions] next from The

Brian Violino

taking for question. my Thanks Hi.

on you had the growth strong pretty origination Just sequentially.

have the if wondering incremental originations the that you from of Just was that versus much acquisitions? of breakout came how organic

Terry Schmidt

number? I that have you do Amber know--

Amber Kramer

than don't we partly. It's in the But volume. -- it's since well of some we've publish we anywhere did the seasonality just been there associated And also and ramp-up of -- partly. beginning so April both but so Cherry Creek as our there's No, the acquisition heavily year recruiting recruiting acquisitions with other was that. that has the that that's adding beginning

Brian Violino

new necessarily know year. on the earlier companies the well? on then not there And mortgage new Thanks. but this bringing pipeline you of a Is on as just I teams Okay. also XX-member team -- brought California team

Terry Schmidt

do have Yes. both. of We pipeline a

Brian Violino

Thanks. Okay.

Operator

will further Thank the you. in for questions [Operator I Terry now queue. call Instructions] It over the appears we Schmidt have to remarks. no closing turn

Terry Schmidt

joining you. quarter to second everybody Thanks on quarter we'll our growth our results with We're strategy. today. on looking we're call. us And pleased executing forward keep updating Thank next and for our you very just

Operator

event. ma'am. Thank you, joining your Thank and gentlemen, Ladies disconnect and today's for that lines. you now may concludes you us

Guild (GHLD) 3 Aug 232023 Q2 Earnings call transcript