GHLD - Earnings call 3 2023 | Guild Holdings Company

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Guild Holdings Company Third Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this call will be recorded. I would now like to turn the conference over to Investor Relations. Please go ahead.

Unknown Attendee

Thank you, and good afternoon, everyone.

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

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

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

Terry Schmidt

high mortgage dedication and the mortgage growth market continuing position customer Gild and ongoing headwinds the Reserve in focus changes of QX joining estimated quarter it XXX the when am through points limited during The year, basis rates the MBA, industry in aggressively with our retail prolonged rate Thank the The below the you our led funds have thank we rate remained you. discuss purchase Federal we for strain well not home In XX% for since, current lack as quarter. put coupled well are sell. Officer, the market raised This mortgage have share in our XXX July update. Chief to adhere in and I to third continue with to on basis were the quarter, strategy supply, with afternoon, homeowners well continues This have an of consistently uncertain. market service, with accelerated strategic pullback as Financial buying According additional to down gain overall industry-wide in third the further existing sequential housing the Amber an choosing a along sales everyone, Good rates from rates Rates joined communicated ever activity. to prior David many to Neylan, rates and raised are to future to to cycle XXXX home unchanged increase Kramer. us by third inventory. our publicized but President, by originations and to points turns. Fed the affordability and and results on with XXXX. by been an

reflect similarly Our ongoing anticipate results these the challenges, and term. muted we in demand near

backdrop, approach However, with Guild maintained offerings. a experience by centered personalized by our our supported on diverse mortgage has product knowledgeable its loan proven borrowing and officers this providing delivered

expand our loan company, growth not strategy of Furthermore, on distributed retail innovative to also for leverage allows outreach us that our a contribute we products are customers, we have relationship-based the promise mission the communities execute our our We serve. sourcing and homeownership. we to options to but to and develop continue we of only in are delivering

ongoing advantage focus This reliable with through extending to it generate not the an only relationships us origination at are more our us asset. competitive starting Our and on enables customer cycle life servicing. build to a allows client focus income,

are We single about a not transaction.

for being transactions. and the all of our We lender are about customers future choice for building relationships

consolidation continues in to a we attracts be believe and the brand in challenging there have and like-minded originators. We market built organic originations companies share. M&A Guild both this In with that loan increasing environment, industry

retail mortgage of X companies. confident in are the We as dominant Guild standing industry's

accelerate our in share and in cycle be market the near positioned our invest platform to turns. continued have to to term when drive We people to and both this growth

that confident right people remain and strategy. platform, allow products our to capitalized we well to deliver are and have on us the We

to Now like David? to over Dave Neylan, turn it I'd

David Neylan

quarter, in-house anticipate pressure $X.X will In of the second total Terry. in as on you, quarter. third Thank loan quarters. billion we continued the we expected, delivered the originations see down slightly We originations $X.X in coming from the billion

However, on basis, from origination to the relative our on benefit In XX% the from estimate market. our the a focus for business we of of closed Association the originated compared Bankers loan purchase third quarter, industry. Mortgage we volume mortgage XX% purchase

opportunities we objectives, have expand In our addition to external business. the to selectively organic growth pursued

branches in quarter, previously similar platform in local First XXX% They located acquired As privately and customer-centric Guild, sales mortgage ours. with a closely to in This operational Centennial the fulfillment predominantly the entering our accelerated disclosed, to year-to-date. third Midwest. business us external and allow strategic markets and strategy our with market focused new share a returns. on presence has marked This aligns several of Illinois headquartered include we the have third their residential lender approach retail, potential Mortgage and held have we growth objectives our transaction to These achieve our us seamlessly as keep the grow exemplify market positioned importantly, in existing growth allowed opportunities ones. and us expanding for as our and that emphasizing, culture

entire already faces Terry As on, ongoing touched pressures. the industry

X in we adhered However, have Guild's confident this we to successful cycle. prove be remain will again to the that that always that strategy is

market our We expand to continue to share. seek will

We who providing expect that service to approach companies and have they pursue adding customers products with our values, our in and from Guild. share along come will recruiting good with selectively organic

the Amber? I'll our Chief discuss, in the this will strength detail. more and now balance Amber execute financials we prioritized sheet turn our liquidity, maintaining us Officer, to allow discuss to Financial Amber As over should on which effectively call have strategy. to

Desiree Elwell

David. you, Thank

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

billion revenue per in income billion net For Adjusted quarter, $XXX $XX quarter. adjusted and income million. $XX the the share, second income our million On $XX generated prior diluted a of was the compared share. third quarter basis, to was $X.XX share $XXX compared loan million second generated per quarter. million originations to million million in-house Net $XX was per in of $X.XX $X.X EBITDA we in or we XXXX, $X.X net of totaled compared to and the net total

Focusing on points compared originations. origination on billion compared basis quarter-over-quarter came volume points the in pull-through adjusted the prior on total basis funded was pull-through quarter. margins $X.X points XX basis in in Gain-on-sale margin to XXX XXX gain-on-sale our at loss segment, quarter billion points our basis and adjusted to loss second to increased $X.X XXX volume

XXXX, our for in sale assumptions a lock loans. $XX.X rate resulted of X loans of During September ended models, our the and sale mortgage increase the which million gain held on using interest changed months valuation we XX, the enhancements to to certain through of commitments

in a net Servicing we The reduction in million in to the value compared to net our compared For $XX.X due reported QX. of in of in second segment, fair QX of quarter, to increase unpaid to quarter-over-quarter with was our servicing $XX million balance $XX in income $XX million lower the due $XX.X million portfolio billion. income assumptions to change valuation

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

liquidity. to Turning

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

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

enables uncertain shareholder managing our focus We strategically completed capital of optimizing on strong time. through the manner includes to us the our efficiency, deploy and while and and in disciplined deployment This over continue liquidity business times quarter. in sheet acquisition capital growth value during we a invest drive the financial prudency to with to and balance

we In $X.X slower have $XX.XX more seasonally quarter, repurchased the an approximately lock average addition, per In billion rates during maintaining volume. and pull-through stock originations of up again conditions entering fourth billion third well $X.X the as the mortgage share. quarter. market October, as ticked XX,XXX at loan challenging adjusted shares of we Industry of generated current price

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

platform. will up durable and a near have business and anticipate in which remain growth across in our we'll the confident of for performance balance continued more the open term balanced And questions. We in cycles. sheet, results pressure that, our We sustainable well-positioned believe model, support market Operator. the we which with call

Operator

come Instructions] first which from Kyle will take [Operator question, Jefferies. will Joseph with time, this At we our

Kyle Joseph

Just first margins the on in quarter. the recovery on

for and drove you that forward? for can expectations anything us give that a your Just going sense that

Desiree Elwell

Yes.

regards reflective increase have of to the So in to release our gain as we $XX.X and and that's a will. organic sale -- we not if that was sale assumptions for the in points. a on higher change you on in basis at That gain and million due did in model looking prepared our to estimates enhancement, noted margin remarks, doing us valuation

X would prior X the no we changes points basis aren't in last shift the the future And XXX in really so operating anything performance pending on if And at we gain reflect that on different we QX. originations, to the that or enhancement around that on really to that model we say, quarters, that this, sale than seeing in I think originations our look margins are rather and quarters other hovering about you this would made market.

Kyle Joseph

Got but then that talk know reverse I how in you. could opportunity just seeing are the And in trended about results, in I if really out parse guys that don't quarter. the your it you and

Desiree Elwell

overall and in in KPIs of overall quarter immaterial Yes. about showing And the $XX million to that we're volume, is our release is the on our volume and reverse originations. it it's the

potential area. that think are group there's to a grow continuing more out it retail we to and that So our roll lot throughout

Kyle Joseph

a it. you sort your announcement around me, stages. of the it's noise one Got that that? any early know weeks and then potential and risks last see opportunities of the as or I perspective couple all And of for on result just a ago

Terry Schmidt

Yes.

whether in thoughts real to And evolving. We going the to that we've some lending the estate of There sort come change Missouri. at side. this there's and now or industry are related are be various consensus really do to anticipate aware that right around isn't there going always point. very this outcome any We marketplace, is this of it's consider

another we'll development be adjust that this We to. need may to expect

changing This through been we've them. environments is and manage before no However, different. through

like anticipation some kind getting change, we'll out So we're of a lot of accordingly, filters and certainly just in have. adapt we always of

Operator

question And will Shane JPMorgan. next our come with Rick from

Richard Shane

that Amber, you the Can true-up but the MSR puts Was you that sort for things. Is $XX.X economic gain the happened? little the about million the appears at on third actually the talked go that what sale describe X.X%. really to the us quarter and mark. through it about a of related to right better value was didn't to way bit fair MSR see --

Desiree Elwell

It's Sure. not the to mark. related MSR

had how for we fair an and time the of was -- loans value into it's servicing the incorporated of change So held value lock assumption at sale.

when fair on line. we so each accounting And information running gain the the it's what we similar change. prevailing our on to based of sale the for reassess based value on of valuation available our through model. valuation And assumption determined and industry enhance that on assessment, mark practices types quarter assets. estimates

it would the the like or in that segment. Servicing where the of to It's that's So related you recapture terms sits. not in MSR see impairment

Richard Shane

it. Got

million this this But was we $XX.X of find -- Okay. obviously because is it cash. know didn't you -- suddenly

the of So this presumably capitalization was MSR.

-- see that's that. where item and line I So the balance -- we sheet the within assume

their was we on sellers acquisition? related liquidity balance relationships. rate we've at related when has the be is may we XX% heard servicing, you and quarter pretty historically you the to sheet? lowest looks comment enhancing it 'XXs. actually acquisitions, dropped been it's on retained. were MSR to on in sellers that's much the net other -- brought the retained and happening, platforms So the acquisitions, look reworked thing that that about that as Or retention Is you you've seen like your this at that this When of made numbers, the to But related targeted the

Terry Schmidt

that look the was It's how we -- for we aggressive. last environment us Really just And quarter neither. released an asset asset. would and what this at where a in we pretty value the the pricing were service servicing correspondent pay

that we all took that, that happened. advantage so And basically of is and

Richard Shane

Got it.

it them a would that time That attractive for anecdotally that environment guess X bulk particularly be that Okay. a to that much persisting. MSR we've I perspective. thing I is that there presumably, purchasers heard sense. dislocation contravenes And the from MSR because buying an of bit is is amongst that originators find it's rate so makes the say from little very compelling actually a

Terry Schmidt

I got that pre these fill correct. getting loans. capacity you've aggressive But cost getting these I have correspondents is think agree at your loans being that to and Rick, to just with originate additional point, are the issues still cash,

shedding So we more driver, really as an still opinion. the so still are capacity in that's -- industry -- we're my of and the

Operator

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

Donald Fandetti

It for? enough capacity industry range think out or kind like sale margin up gain of would see well in historical X.XX% sounds in but that Do so coming the we be the that's we the move be the into low high the a XXXX. Xs. that QX of still Is there on should that that's trending you looking below volume range, as your you

Desiree Elwell

now. that we're seeing any right We going say occurring forward, not don't provide changes will I but guidance

I of changes. inventory it's issues, the going at point to We're into when to hard fourth not think going a just we on within but turn at don't this these will is year, know any see that some very say. it's seasonally volume in we're top the hoping XXXX. market point, quarter And

Donald Fandetti

more the Got opportunities seeing Are be you still acquisition you deals are to where there think where it. And you into in XXXX? cycle? could

Terry Schmidt

Our very up summer in months, bit pipeline like It things little slowed strong. picking down is it's the again. but seem a still

be It's additional to very still. similar what So we in forward acquisitions we've this done the that do year. going we'll active to anticipate market and pretty still do

Operator

JMP come Trevor will Securities. Cranston question with from next our And

Trevor Cranston

you're acquisition kind the position Follow away the opportunities guys to All grow you not about other strong companies last opportunities about question growth you finding opportunities. from to through from the side. employees that it as whether from in what Can how adding maybe acquisition quite talk away the might of up you're right. or business a be acquisitions, seeing be

Terry Schmidt

originators. focused and brand active recruitment acquisitions, And Outside on X we just organic understands that, goal, what do, the than been And hired a of job. he's is actually industry, or to met still goal it's think we that that is Sure. date, it's the pipeline this doing our we're we've fantastic new in growing the too, year. in all we left. that everybody we've well and I as the a been whether more organic organically and it's is larger always have months our it's built and bringing acquisitions than year, And for manager,

So there of there still is quite a bit opportunity as well.

So we're going both fronts.

Operator

Rick, question will JPMorgan. follow-up Shane line a And our be next from Rick open. with is your

Richard Shane

pretax about apologize. Sorry I've have this income missed $XX.X million should that is and asked Should XXX%. the I I we it's it, the apologize. disclosed anywhere, adjustment that. if operating essentially assume on and I before

Desiree Elwell

figure would and flow -- income statement have. The financials -- I it overall same through mean same apply the tax the the our that

Richard Shane

no or any operating it. are or Right. But there expenses Okay. Got amortization

Desiree Elwell

the comments model. the of to just fair the Correct. to of by value X to Yes. estimates you enhancements the because increase relates be said, the driven just clear, Rick, And so

loans locked fair for in inventory loans pipeline So the are of the value-related offset at our will third sold, are be held-for-sale and quarter, the when time in gain that sale. this these

sale in I want talking and just the liquidity loans on because you not sheet. held make So that's for sitting balance to sure MSR, really about it's in on clear the there, it's were the

Richard Shane

it. Got

Okay.

-- wait is assumptions said, And which would so not but model, and just done numbers the retroactively through the of the to fair and And the past. the model the if that to we're been we simply would this. the run you we do were different in the changed literally think you way if even the this enhancing run a way way have you second, the this we're value, okay, changed had doing

Desiree Elwell

It's just a model enhancement.

it like servicing value And incorporated of in how And loans value so of the sale. held just I into the at then time the for said, it's time sale. and lock it's the the offsets fair

sheet that perspective. QX So the balance at it's just end of impact a from really

Operator

to This closing concludes back turn to I'd our Schmidt any remarks. question-and-answer session. Terry like over for conference the

Terry Schmidt

the you you. thank and say to executing being talk on for strategy, and quarter. wanted next just we'll Just we'll Thank our on call, keep

Operator

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

disconnect your now lines. may You

Guild (GHLD) 8 Nov 232023 Q3 Earnings call transcript