loanDepot Announces Fourth Quarter and Year-End 2023 Financial Results
- 61% reduction in annual net loss for 2023.
- 22% revenue decline in 2023.
- Strong liquidity position at the end of 2023.
- 35% year-over-year revenue increase in Q4 2023.
- Cost reduction program targeting $120 million for 2024.
- None.
Insights
The report indicates a strategic realignment within loanDepot, with a focus on cost reduction and operational efficiency. The substantial decrease in annual net loss by 61% suggests that the company's 'Vision 2025' productivity improvements are effectively compensating for the revenue decline caused by lower market volumes. This indicates a strong operational pivot towards managing expenses in a challenging market environment.
From a financial perspective, the shift towards a higher servicing income and Home Equity Line of Credit (HELOC) revenue, alongside a more favorable gain on sale margin, demonstrates an evolving revenue model that could provide stability against market fluctuations. The reported strong liquidity position, with a cash balance of $661 million, is a critical factor for investor confidence, especially in the context of uncertain mortgage volume recovery.
However, the decrease in revenue by 22% year-over-year remains a concern, reflecting the broader challenges in the mortgage industry, including interest rate hikes and a cooling housing market. Investors should monitor the company's ability to continue its cost optimization without compromising growth potential or service quality in the long term.
loanDepot's performance must be contextualized within the broader housing and mortgage markets. The company's pivot towards servicing income and the emphasis on a multi-channel origination business model are indicative of an industry-wide trend towards diversification of revenue streams in response to a volatile mortgage market.
Despite the reduction in origination volume, the increase in purchase volume to 76% of total loans originated is a positive sign that loanDepot is capturing a larger share of the purchase market, which is less sensitive to interest rate changes than the refinance market. This strategic positioning could benefit the company as the housing market begins to recover.
The company's investment in technology platforms and business processes is a proactive measure to enhance competitiveness. The focus on automation and productivity is consistent with industry efforts to reduce operational costs and improve margins. The success of these initiatives could set a benchmark for operational excellence in the sector.
The accrual of $27 million related to the expected settlement of outstanding litigation is a significant financial consideration that impacts the company's expense structure. While this is a one-time expense, it's important for stakeholders to understand the nature of these legal challenges and the potential for future liabilities.
The financial disclosure also highlights ongoing restructuring charges, lease and other asset impairment charges, which are indicative of the company's efforts to streamline operations. While these charges can lead to short-term financial strain, they are often necessary for long-term sustainability and profitability, especially in a sector as competitive as mortgage lending.
Investors should consider the legal and regulatory landscape of the mortgage industry, as it can significantly affect operational costs and risk management strategies. Companies that navigate these complexities effectively can gain a competitive edge and improve investor confidence.
Vision 2025 productivity improvements more than offset market-driven revenue decline, resulting in
Full-year 2023 highlights:
-
Revenue decreased
$282 million 22% to$974 million -
Total expenses decreased
$693 million 36% to$1.25 billion $27 million -
Annual net loss narrowed
$375 million 61% to$236 million -
Adjusted annual net loss declined by
$315 million 69% to$142 million
Fourth quarter 2023 highlights:
-
Year-over-year revenue increased
$59 million 35% to$229 million $37 million 14% from third quarter 2023, primarily driven by seasonally lower volume partially offset by higher gain on sale margin. -
Year-over-year expenses decreased
$41 million 12% to$303 million $3 million 1% from third quarter 2023. -
During the quarter the company launched a supplemental cost reduction program targeting
$120 million 86% of the planned improvements. -
Year-over-year net loss decreased from
$158 million $60 million $26 million -
Year-over-year adjusted net loss decreased from
$107 million $27 million $1 million -
Company reports cash balance of
$661 million
“loanDepot made substantial progress in 2023, significantly resetting its cost structure and making critical investments in our technology platforms and business processes, which we believe position us to capture the benefits of the eventual rebound in mortgage volumes,” said President and Chief Executive Officer Frank Martell.
“We are entering 2024 with a more durable revenue model built around a strong multi-channel origination business and a low cost, high-quality servicing platform that underpins our strategy of becoming a trusted partner for individuals and families on their homeownership journey. We will continue to aggressively pursue automation and productivity programs to support expanded operating leverage and continue to fund reinvestment in solutions that support the increasingly diverse communities that represent a growing number of homebuyers,”
“During the course of 2023, we reduced our cost structure by
Fourth Quarter Highlights:
Financial Summary
|
Three Months Ended |
|
Year Ended |
||||||||||||||||
($ in thousands except per share data) (Unaudited) |
Dec 31,
|
|
Sep 30,
|
|
Dec 31,
|
|
Dec 31,
|
|
Dec 31,
|
||||||||||
Rate lock volume |
$ |
6,417,419 |
|
|
$ |
8,295,935 |
|
|
$ |
6,933,099 |
|
|
$ |
32,155,455 |
|
|
$ |
68,553,340 |
|
Pull through weighted lock volume(1) |
|
4,407,386 |
|
|
|
5,685,209 |
|
|
|
4,196,894 |
|
|
|
21,475,262 |
|
|
|
45,164,915 |
|
Loan origination volume |
|
5,370,708 |
|
|
|
6,083,143 |
|
|
|
6,382,743 |
|
|
|
22,671,731 |
|
|
|
53,778,456 |
|
Gain on sale margin(2) |
|
2.43 |
% |
|
|
2.74 |
% |
|
|
1.45 |
% |
|
|
2.60 |
% |
|
|
1.63 |
% |
Pull through weighted gain on sale margin(3) |
|
2.96 |
% |
|
|
2.93 |
% |
|
|
2.21 |
% |
|
|
2.75 |
% |
|
|
1.94 |
% |
Financial Results |
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue |
$ |
228,626 |
|
|
$ |
265,661 |
|
|
$ |
169,655 |
|
|
$ |
974,022 |
|
|
$ |
1,255,796 |
|
Total expense |
|
302,571 |
|
|
|
305,128 |
|
|
|
343,735 |
|
|
|
1,252,330 |
|
|
|
1,945,773 |
|
Net loss |
|
(59,771 |
) |
|
|
(34,262 |
) |
|
|
(157,762 |
) |
|
|
(235,512 |
) |
|
|
(610,385 |
) |
Diluted loss per share |
$ |
(0.16 |
) |
|
$ |
(0.09 |
) |
|
$ |
(0.46 |
) |
|
$ |
(0.63 |
) |
|
$ |
(1.75 |
) |
Non-GAAP Financial Measures(4) |
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted total revenue |
$ |
251,450 |
|
|
$ |
266,363 |
|
|
$ |
188,501 |
|
|
$ |
1,019,714 |
|
|
$ |
1,216,041 |
|
Adjusted net loss |
|
(26,660 |
) |
|
|
(25,405 |
) |
|
|
(107,156 |
) |
|
|
(142,443 |
) |
|
|
(457,601 |
) |
Adjusted EBITDA (LBITDA) |
|
14,957 |
|
|
|
20,497 |
|
|
|
(86,836 |
) |
|
|
18,907 |
|
|
|
(446,938 |
) |
(1) |
Pull through weighted rate lock volume is the principal balance of loans subject to interest rate lock commitments, net of a pull-through factor for the loan funding probability. |
||
(2) |
Gain on sale margin represents the total of (i) gain on origination and sale of loans, net, and (ii) origination income, net, divided by loan origination volume during period. |
||
(3) |
Pull through weighted gain on sale margin represents the total of (i) gain on origination and sale of loans, net, and (ii) origination income, net, divided by the pull through weighted rate lock volume. |
||
(4) |
See “Non-GAAP Financial Measures” for a discussion of Non-GAAP Financial Measures and a reconciliation of these metrics to their closest GAAP measure. |
Operational Highlights
-
Quarterly non-volume related expenses increased
$4.9 million -
Incurred restructuring charges of
$3.5 million $0.8 million $4.3 million $2.1 million -
Accrued
$3.7 million $2.0 million -
Pull through weighted lock volume of
$4.4 billion $1.3 billion 22% from the third quarter of 2023, resulting in quarterly total revenue of$228.6 million $37.0 million 14% , over the same period. -
Loan origination volume for the fourth quarter of 2023 was
$5.4 billion $0.7 billion 12% from the third quarter of 2023. -
Purchase volume increased to
76% of total loans originated during the fourth quarter, up from71% of total loans originated during the third quarter of 2023 and flat to76% of total loans originated during the fourth quarter of 2022. -
For the three months ending December 31, 2023, our preliminary organic refinance consumer direct recapture rate1 decreased to
58% from the third quarter’s refinance rate of69% . -
Net loss for the fourth quarter of 2023 of
$59.8 million $34.3 million -
Adjusted net loss for the fourth quarter of 2023 was
$26.7 million $25.4 million
Outlook for the first quarter of 2024
-
Origination volume of between
$3.5 billion $5.5 billion -
Pull-through weighted rate lock volume of between
$3.5 billion $5.5 billion - Pull-through weighted gain on sale margin of between 270 basis points and 300 basis points.
1 |
We define organic refinance consumer direct recapture rate as the total unpaid principal balance (“UPB”) of loans in our servicing portfolio that are paid in full for purposes of refinancing the loan on the same property, with the Company acting as lender on both the existing and new loan, divided by the UPB of all loans in our servicing portfolio that paid in full for the purpose of refinancing the loan on the same property. The recapture rate is finalized following the publication date of this release when external data becomes available. |
Servicing
|
|
Three Months Ended |
|
Year Ended |
||||||||||||||||
Servicing Revenue Data: ($ in thousands) (Unaudited) |
|
Dec 31,
|
|
Sep 30,
|
|
Dec 31,
|
|
Dec 31,
|
|
Dec 31,
|
||||||||||
Due to changes in valuation inputs or assumptions |
|
$ |
(71,195 |
) |
|
$ |
68,651 |
|
|
$ |
(10,094 |
) |
|
$ |
2,227 |
|
|
$ |
363,064 |
|
Due to collection/realization of cash flows |
|
|
(34,433 |
) |
|
|
(38,502 |
) |
|
|
(37,427 |
) |
|
|
(149,211 |
) |
|
|
(230,449 |
) |
Realized (losses) gains on sales of servicing rights, net (1) |
|
|
(192 |
) |
|
|
3,516 |
|
|
|
2,285 |
|
|
|
10,486 |
|
|
|
(3,663 |
) |
Net gain (loss) from derivatives hedging servicing rights |
|
|
48,371 |
|
|
|
(69,353 |
) |
|
|
(8,752 |
) |
|
|
(47,919 |
) |
|
|
(323,309 |
) |
Changes in fair value of servicing rights, net |
|
$ |
(57,449 |
) |
|
$ |
(35,688 |
) |
|
$ |
(53,988 |
) |
|
$ |
(184,417 |
) |
|
$ |
(194,357 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Servicing fee income |
|
$ |
132,482 |
|
|
$ |
120,911 |
|
|
$ |
107,221 |
|
|
$ |
492,811 |
|
|
$ |
449,150 |
|
(1) |
Includes the provision for sold MSRs. |
|
|
Three Months Ended |
|
Year Ended |
||||||||||||||||
Servicing Rights, at Fair Value: ($ in thousands) (Unaudited) |
|
Dec 31,
|
|
Sep 30,
|
|
Dec 31,
|
|
Dec 31,
|
|
Dec 31,
|
||||||||||
Balance at beginning of period |
|
$ |
2,038,654 |
|
|
$ |
1,998,762 |
|
|
$ |
2,013,269 |
|
|
$ |
2,025,136 |
|
|
$ |
1,999,402 |
|
Additions |
|
|
62,158 |
|
|
|
80,068 |
|
|
|
73,256 |
|
|
|
277,387 |
|
|
|
647,716 |
|
Sales proceeds |
|
|
(9,521 |
) |
|
|
(73,972 |
) |
|
|
(13,874 |
) |
|
|
(180,687 |
) |
|
|
(765,151 |
) |
Changes in fair value: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Due to changes in valuation inputs or assumptions |
|
|
(71,195 |
) |
|
|
68,651 |
|
|
|
(10,094 |
) |
|
|
2,227 |
|
|
|
363,064 |
|
Due to collection/realization of cash flows |
|
|
(34,433 |
) |
|
|
(38,502 |
) |
|
|
(37,427 |
) |
|
|
(149,211 |
) |
|
|
(230,449 |
) |
Realized gains on sales of servicing rights |
|
|
55 |
|
|
|
3,647 |
|
|
|
6 |
|
|
|
10,866 |
|
|
|
10,554 |
|
Balance at end of period (1) |
|
$ |
1,985,718 |
|
|
$ |
2,038,654 |
|
|
$ |
2,025,136 |
|
|
$ |
1,985,718 |
|
|
$ |
2,025,136 |
|
| (1) |
Balances are net of |
|
|
|
% Change |
||||||||||||||
Servicing Portfolio Data: ($ in thousands) (Unaudited) |
Dec 31,
|
|
Sep 30,
|
|
Dec 31,
|
|
Dec-23 vs Sep-23 |
|
Dec-23
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Servicing portfolio (unpaid principal balance) |
$ |
145,090,199 |
|
|
$ |
143,959,705 |
|
|
$ |
141,170,931 |
|
|
0.8 |
% |
|
2.8 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||
Total servicing portfolio (units) |
|
496,894 |
|
|
|
490,191 |
|
|
|
471,022 |
|
|
1.4 |
|
|
5.5 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
60+ days delinquent ($) |
$ |
1,392,606 |
|
|
$ |
1,235,443 |
|
|
$ |
1,421,722 |
|
|
12.7 |
|
|
(2.0 |
) |
60+ days delinquent (%) |
|
1.0 |
% |
|
|
0.9 |
% |
|
|
1.0 |
% |
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||||
Servicing rights, net to UPB |
|
1.37 |
% |
|
|
1.42 |
% |
|
|
1.43 |
% |
|
|
|
|
||
Balance Sheet Highlights
|
|
|
|
|
|
|
% Change |
|||||||
($ in thousands) (Unaudited) |
Dec 31,
|
|
Sep 30,
|
|
Dec 31,
|
|
Dec-23
|
|
Dec-23
|
|||||
Cash and cash equivalents |
$ |
660,707 |
|
$ |
717,196 |
|
$ |
863,956 |
|
(7.9 |
) % |
|
(23.5 |
) % |
Loans held for sale, at fair value |
|
2,132,880 |
|
|
2,070,748 |
|
|
2,373,427 |
|
3.0 |
|
|
(10.1 |
) |
Servicing rights, at fair value |
|
1,999,763 |
|
|
2,053,359 |
|
|
2,037,447 |
|
(2.6 |
) |
|
(1.8 |
) |
Total assets |
|
6,151,048 |
|
|
6,078,529 |
|
|
6,609,934 |
|
1.2 |
|
|
(6.9 |
) |
Warehouse and other lines of credit |
|
1,947,057 |
|
|
1,897,859 |
|
|
2,146,602 |
|
2.6 |
|
|
(9.3 |
) |
Total liabilities |
|
5,446,564 |
|
|
5,309,594 |
|
|
5,688,461 |
|
2.6 |
|
|
(4.3 |
) |
Total equity |
|
704,484 |
|
|
768,935 |
|
|
921,473 |
|
(8.4 |
) |
|
(23.5 |
) |
An increase in loans held for sale at December 31, 2023, resulted in a corresponding increase in the balance on our warehouse lines of credit. Total funding capacity with our lending partners was
Consolidated Statements of Operations
($ in thousands except per share data) |
Three Months Ended |
|
Year Ended |
||||||||||||||||
|
Dec 31,
|
|
Sep 30,
|
|
Dec 31,
|
|
Dec 31,
|
|
Dec 31,
|
||||||||||
|
(Unaudited) |
|
(Unaudited) |
|
|
||||||||||||||
REVENUES: |
|
|
|
|
|
|
|
|
|
||||||||||
Interest income |
$ |
34,992 |
|
|
$ |
37,253 |
|
|
$ |
33,316 |
|
|
$ |
133,263 |
|
|
$ |
200,204 |
|
Interest expense |
|
(33,686 |
) |
|
|
(36,770 |
) |
|
|
(29,676 |
) |
|
|
(130,145 |
) |
|
|
(150,897 |
) |
Net interest income |
|
1,306 |
|
|
|
483 |
|
|
|
3,640 |
|
|
|
3,118 |
|
|
|
49,307 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gain on origination and sale of loans, net |
|
113,185 |
|
|
|
148,849 |
|
|
|
82,547 |
|
|
|
524,521 |
|
|
|
748,540 |
|
Origination income, net |
|
17,120 |
|
|
|
17,740 |
|
|
|
10,287 |
|
|
|
65,209 |
|
|
|
129,736 |
|
Servicing fee income |
|
132,482 |
|
|
|
120,911 |
|
|
|
107,221 |
|
|
|
492,811 |
|
|
|
449,150 |
|
Change in fair value of servicing rights, net |
|
(57,449 |
) |
|
|
(35,688 |
) |
|
|
(53,988 |
) |
|
|
(184,417 |
) |
|
|
(194,357 |
) |
Other income |
|
21,982 |
|
|
|
13,366 |
|
|
|
19,948 |
|
|
|
72,780 |
|
|
|
73,420 |
|
Total net revenues |
|
228,626 |
|
|
|
265,661 |
|
|
|
169,655 |
|
|
|
974,022 |
|
|
|
1,255,796 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
EXPENSES: |
|
|
|
|
|
|
|
|
|
||||||||||
Personnel expense |
|
132,752 |
|
|
|
141,432 |
|
|
|
165,626 |
|
|
|
573,010 |
|
|
|
1,027,008 |
|
Marketing and advertising expense |
|
28,360 |
|
|
|
33,894 |
|
|
|
31,539 |
|
|
|
132,880 |
|
|
|
236,828 |
|
Direct origination expense |
|
16,790 |
|
|
|
15,749 |
|
|
|
14,239 |
|
|
|
67,141 |
|
|
|
120,854 |
|
General and administrative expense |
|
55,258 |
|
|
|
46,522 |
|
|
|
68,590 |
|
|
|
212,732 |
|
|
|
265,680 |
|
Occupancy expense |
|
5,433 |
|
|
|
5,903 |
|
|
|
6,633 |
|
|
|
23,516 |
|
|
|
35,306 |
|
Depreciation and amortization |
|
9,922 |
|
|
|
10,592 |
|
|
|
10,085 |
|
|
|
41,261 |
|
|
|
42,195 |
|
Servicing expense |
|
8,572 |
|
|
|
8,532 |
|
|
|
6,633 |
|
|
|
27,687 |
|
|
|
53,106 |
|
Other interest expense |
|
45,484 |
|
|
|
42,504 |
|
|
|
40,390 |
|
|
|
174,103 |
|
|
|
124,060 |
|
Goodwill impairment |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
40,736 |
|
Total expenses |
|
302,571 |
|
|
|
305,128 |
|
|
|
343,735 |
|
|
|
1,252,330 |
|
|
|
1,945,773 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss before income taxes |
|
(73,945 |
) |
|
|
(39,467 |
) |
|
|
(174,080 |
) |
|
|
(278,308 |
) |
|
|
(689,977 |
) |
Income tax benefit |
|
(14,174 |
) |
|
|
(5,205 |
) |
|
|
(16,318 |
) |
|
|
(42,796 |
) |
|
|
(79,592 |
) |
Net loss |
|
(59,771 |
) |
|
|
(34,262 |
) |
|
|
(157,762 |
) |
|
|
(235,512 |
) |
|
|
(610,385 |
) |
Net loss attributable to noncontrolling interests |
|
(32,578 |
) |
|
|
(17,663 |
) |
|
|
(80,492 |
) |
|
|
(125,370 |
) |
|
|
(337,365 |
) |
Net loss attributable to loanDepot, Inc. |
$ |
(27,193 |
) |
|
$ |
(16,599 |
) |
|
$ |
(77,270 |
) |
|
$ |
(110,142 |
) |
|
$ |
(273,020 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic loss per share |
$ |
(0.15 |
) |
|
$ |
(0.09 |
) |
|
$ |
(0.46 |
) |
|
$ |
(0.63 |
) |
|
$ |
(1.75 |
) |
Diluted loss per share |
$ |
(0.16 |
) |
|
$ |
(0.09 |
) |
|
$ |
(0.46 |
) |
|
$ |
(0.63 |
) |
|
$ |
(1.75 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average shares outstanding |
|
|
|
|
|
|
|
|
|
||||||||||
Basic |
|
178,888,225 |
|
|
|
175,962,804 |
|
|
|
168,617,732 |
|
|
|
174,906,063 |
|
|
|
156,030,350 |
|
Diluted |
|
326,288,272 |
|
|
|
175,962,804 |
|
|
|
168,617,732 |
|
|
|
174,906,063 |
|
|
|
156,030,350 |
|
Consolidated Balance Sheets
($ in thousands) |
Dec 31,
|
|
Sep 30,
|
|
Dec 31,
|
|||
|
(Unaudited) |
|
|
|||||
ASSETS |
|
|
|
|
|
|||
Cash and cash equivalents |
$ |
660,707 |
|
$ |
717,196 |
|
$ |
863,956 |
Restricted cash |
|
85,149 |
|
|
114,765 |
|
|
116,545 |
Loans held for sale, at fair value |
|
2,132,880 |
|
|
2,070,748 |
|
|
2,373,427 |
Derivative assets, at fair value |
|
93,574 |
|
|
86,622 |
|
|
39,411 |
Servicing rights, at fair value |
|
1,999,763 |
|
|
2,053,359 |
|
|
2,037,447 |
Trading securities, at fair value |
|
92,901 |
|
|
89,334 |
|
|
94,243 |
Property and equipment, net |
|
70,809 |
|
|
76,762 |
|
|
92,889 |
Operating lease right-of-use asset |
|
29,433 |
|
|
32,558 |
|
|
35,668 |
Loans eligible for repurchase |
|
711,371 |
|
|
639,806 |
|
|
634,677 |
Investments in joint ventures |
|
20,363 |
|
|
18,778 |
|
|
20,410 |
Other assets |
|
254,098 |
|
|
178,601 |
|
|
301,261 |
Total assets |
$ |
6,151,048 |
|
$ |
6,078,529 |
|
$ |
6,609,934 |
|
|
|
|
|
|
|||
LIABILITIES AND EQUITY |
|
|
|
|
|
|||
LIABILITIES: |
|
|
|
|
|
|||
Warehouse and other lines of credit |
$ |
1,947,057 |
|
$ |
1,897,859 |
|
$ |
2,146,602 |
Accounts payable and accrued expenses |
|
379,971 |
|
|
462,521 |
|
|
488,696 |
Derivative liabilities, at fair value |
|
84,962 |
|
|
49,742 |
|
|
67,492 |
Liability for loans eligible for repurchase |
|
711,371 |
|
|
639,806 |
|
|
634,677 |
Operating lease liability |
|
49,192 |
|
|
53,579 |
|
|
61,675 |
Debt obligations, net |
|
2,274,011 |
|
|
2,206,087 |
|
|
2,289,319 |
Total liabilities |
|
5,446,564 |
|
|
5,309,594 |
|
|
5,688,461 |
EQUITY: |
|
|
|
|
|
|||
Total equity |
|
704,484 |
|
|
768,935 |
|
|
921,473 |
Total liabilities and equity |
$ |
6,151,048 |
|
$ |
6,078,529 |
|
$ |
6,609,934 |
Loan Origination and Sales Data
($ in thousands) (Unaudited) |
|
Three Months Ended |
|
Year Ended |
|||||||||||
|
Dec 31,
|
|
Sep 30,
|
|
Dec 31,
|
|
Dec 31,
|
|
Dec 31,
|
||||||
Loan origination volume by type: |
|
|
|
|
|
|
|
|
|
|
|||||
Conventional conforming |
|
$ |
2,830,776 |
|
$ |
3,158,107 |
|
$ |
3,823,857 |
|
$ |
12,206,382 |
|
$ |
35,931,625 |
FHA/VA/USDA |
|
|
2,062,928 |
|
|
2,354,630 |
|
|
2,104,409 |
|
|
8,434,095 |
|
|
12,769,696 |
Jumbo |
|
|
81,591 |
|
|
126,408 |
|
|
242,785 |
|
|
487,142 |
|
|
4,197,841 |
Other |
|
|
395,413 |
|
|
443,998 |
|
|
211,692 |
|
|
1,544,112 |
|
|
879,294 |
Total |
|
$ |
5,370,708 |
|
$ |
6,083,143 |
|
$ |
6,382,743 |
|
$ |
22,671,731 |
|
$ |
53,778,456 |
|
|
|
|
|
|
|
|
|
|
|
|||||
Loan origination volume by purpose: |
|
|
|
|
|
|
|
|
|
|
|||||
Purchase |
|
$ |
4,071,761 |
|
$ |
4,337,476 |
|
$ |
4,864,187 |
|
$ |
16,474,927 |
|
$ |
29,333,525 |
Refinance - cash out |
|
|
1,221,538 |
|
|
1,660,578 |
|
|
1,432,195 |
|
|
5,821,102 |
|
|
19,613,365 |
Refinance - rate/term |
|
|
77,409 |
|
|
85,089 |
|
|
86,361 |
|
|
375,702 |
|
|
4,831,566 |
Total |
|
$ |
5,370,708 |
|
$ |
6,083,143 |
|
$ |
6,382,743 |
|
$ |
22,671,731 |
|
$ |
53,778,456 |
|
|
|
|
|
|
|
|
|
|
|
|||||
Loans sold: |
|
|
|
|
|
|
|
|
|
|
|||||
Servicing retained |
|
$ |
3,825,478 |
|
$ |
4,175,126 |
|
$ |
4,165,552 |
|
$ |
15,222,156 |
|
$ |
38,461,896 |
Servicing released |
|
|
1,572,369 |
|
|
2,092,762 |
|
|
2,634,855 |
|
|
7,918,029 |
|
|
20,855,416 |
Total |
|
$ |
5,397,847 |
|
$ |
6,267,888 |
|
$ |
6,800,407 |
|
$ |
23,140,185 |
|
$ |
59,317,312 |
|
|
|
|
|
|
|
|
|
|
|
|||||
Fourth Quarter Earnings Call
Management will host a conference call and live webcast today at 5:00 p.m. ET on loanDepot’s Investor Relations website, investors.loandepot.com, to discuss its earnings results.
The conference call can also be accessed by dialing (800) 715-9871, Conference ID: 9881136. Please call five minutes in advance to ensure that you are connected prior to the call. A webcast can also be accessed at https://events.q4inc.com/attendee/248239049
A replay of the webcast will be made available on the Investor Relations website following the conclusion of the event.
For more information about loanDepot, please visit the company’s Investor Relations website: investors.loandepot.com.
Non-GAAP Financial Measures
To provide investors with information in addition to our results as determined by GAAP, we disclose certain non-GAAP measures to assist investors in evaluating our financial results. We believe these non-GAAP measures provide useful information to investors regarding our results of operations because each measure assists both investors and management in analyzing and benchmarking the performance and value of our business. They facilitate company-to-company operating performance comparisons by backing out potential differences caused by variations in hedging strategies, changes in valuations, capital structures (affecting interest expense on non-funding debt), taxation, the age and book depreciation of facilities (affecting relative depreciation expense), and other cost or benefit items which may vary for different companies for reasons unrelated to operating performance. These non-GAAP measures include our Adjusted Total Revenue, Adjusted Net Income (Loss), Adjusted Diluted Earnings (Loss) Per Share (if dilutive), and Adjusted EBITDA (LBITDA). We exclude from these non-GAAP financial measures the change in fair value of MSRs and related hedging gains and losses as they represent non-cash, unrealized adjustments resulting from changes in valuation assumptions, mostly due to changes in market interest rates, and are not indicative of the Company’s operating performance or results of operation. We also exclude stock-based compensation expense, which is a non-cash expense, gains or losses on extinguishment of debt and disposal of fixed assets, non-cash goodwill impairment, and other impairment charges to intangible assets and operating lease right-of-use assets, as well as certain costs associated with our restructuring efforts, as management does not consider these costs to be indicative of our performance or results of operations. Adjusted EBITDA (LBITDA) includes interest expense on funding facilities, which are recorded as a component of “net interest income (expense),” as these expenses are a direct operating expense driven by loan origination volume. By contrast, interest expense on our non-funding debt is a function of our capital structure and is therefore excluded from Adjusted EBITDA (LBITDA). Adjustments for income taxes are made to reflect historical results of operations on the basis that it was taxed as a corporation under the Internal Revenue Code, and therefore subject to
- they do not reflect every cash expenditure, future requirements for capital expenditures or contractual commitments;
- Adjusted EBITDA (LBITDA) does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payment on our debt;
- although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced or require improvements in the future, and Adjusted Total Revenue, Adjusted Net Income (Loss), and Adjusted EBITDA (LBITDA) do not reflect any cash requirement for such replacements or improvements; and
- they are not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows.
Because of these limitations, Adjusted Total Revenue, Adjusted Net Income (Loss), Adjusted Diluted Earnings (Loss) Per Share, and Adjusted EBITDA (LBITDA) are not intended as alternatives to total revenue, net income (loss), net income (loss) attributable to the Company, or Diluted Earnings (Loss) Per Share or as an indicator of our operating performance and should not be considered as measures of discretionary cash available to us to invest in the growth of our business or as measures of cash that will be available to us to meet our obligations. We compensate for these limitations by using Adjusted Total Revenue, Adjusted Net Income (Loss), Adjusted Diluted Earnings (Loss) Per Share, and Adjusted EBITDA (LBITDA) along with other comparative tools, together with
Reconciliation of Total Revenue to Adjusted Total Revenue ($ in thousands) (Unaudited) |
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
Dec 31,
|
|
Sep 30,
|
|
Dec 31,
|
|
Dec 31,
|
|
Dec 31,
|
|||||||
Total net revenue |
|
$ |
228,626 |
|
$ |
265,661 |
|
$ |
169,655 |
|
$ |
974,022 |
|
$ |
1,255,796 |
|
Change in fair value of servicing rights, net of hedging gains and losses(1) |
|
|
22,824 |
|
|
702 |
|
|
18,846 |
|
|
45,692 |
|
|
(39,755 |
) |
Adjusted total revenue |
|
$ |
251,450 |
|
$ |
266,363 |
|
$ |
188,501 |
|
$ |
1,019,714 |
|
$ |
1,216,041 |
|
| (1) | Represents the change in the fair value of servicing rights due to changes in valuation inputs or assumptions, net of gains or losses from derivatives hedging servicing rights. |
Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) ($ in thousands) (Unaudited) |
|
Three Months Ended |
|
Year Ended |
||||||||||||||||
|
Dec 31,
|
|
Sep 30,
|
|
Dec 31,
|
|
Dec 31,
|
|
Dec 31,
|
|||||||||||
Net loss attributable to loanDepot, Inc. |
|
$ |
(27,193 |
) |
|
$ |
(16,599 |
) |
|
$ |
(77,270 |
) |
|
$ |
(110,142 |
) |
|
$ |
(273,020 |
) |
Net loss from the pro forma conversion of Class C common shares to Class A common stock (1) |
|
|
(32,578 |
) |
|
|
(17,663 |
) |
|
|
(80,492 |
) |
|
|
(125,370 |
) |
|
|
(337,365 |
) |
Net loss |
|
|
(59,771 |
) |
|
|
(34,262 |
) |
|
|
(157,762 |
) |
|
|
(235,512 |
) |
|
|
(610,385 |
) |
Adjustments to the benefit for income taxes(2) |
|
|
7,776 |
|
|
|
4,845 |
|
|
|
25,339 |
|
|
|
32,872 |
|
|
|
92,337 |
|
Tax-effected net loss from the pro forma conversion of Class C common shares to Class A common stock |
|
|
(51,995 |
) |
|
|
(29,417 |
) |
|
|
(132,423 |
) |
|
|
(202,640 |
) |
|
|
(518,048 |
) |
Change in fair value of servicing rights, net of hedging gains and losses(3) |
|
|
22,824 |
|
|
|
702 |
|
|
|
18,846 |
|
|
|
45,692 |
|
|
|
(39,755 |
) |
Stock-based compensation expense |
|
|
6,375 |
|
|
|
3,940 |
|
|
|
8,789 |
|
|
|
21,993 |
|
|
|
20,583 |
|
Restructuring charges(4) |
|
|
3,517 |
|
|
|
2,004 |
|
|
|
5,178 |
|
|
|
11,811 |
|
|
|
25,126 |
|
Gain on extinguishment of debt |
|
|
— |
|
|
|
(1,651 |
) |
|
|
— |
|
|
|
(1,690 |
) |
|
|
(10,528 |
) |
Loss on disposal of fixed assets |
|
|
325 |
|
|
|
93 |
|
|
|
1,568 |
|
|
|
1,430 |
|
|
|
12,594 |
|
Goodwill impairment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
40,736 |
|
Other impairment |
|
|
455 |
|
|
|
129 |
|
|
|
2,388 |
|
|
|
925 |
|
|
|
17,500 |
|
Tax effect of adjustments(5) |
|
|
(8,161 |
) |
|
|
(1,205 |
) |
|
|
(11,502 |
) |
|
|
(19,964 |
) |
|
|
(5,809 |
) |
Adjusted net loss |
|
$ |
(26,660 |
) |
|
$ |
(25,405 |
) |
|
$ |
(107,156 |
) |
|
$ |
(142,443 |
) |
|
$ |
(457,601 |
) |
(1) |
Reflects net loss to Class A common stock and Class D common stock from the pro forma exchange of Class C common stock. |
||
(2) |
loanDepot, Inc. is subject to federal, state and local income taxes. Adjustments to income tax benefit reflect the effective income tax rates below, and the pro forma assumption that loanDepot, Inc. owns |
|
|
Three Months Ended |
|
Year Ended |
|||||||||||
|
Dec 31,
|
|
Sep 30,
|
|
Dec 31,
|
|
Dec 31,
|
|
Dec 31,
|
||||||
Statutory |
|
21.00 |
% |
|
21.00 |
% |
|
21.00 |
% |
|
21.00 |
% |
|
21.00 |
% |
State and local income taxes (net of federal benefit) |
|
2.87 |
% |
|
6.43 |
% |
|
10.48 |
% |
|
5.22 |
% |
|
6.37 |
% |
Effective income tax rate |
|
23.87 |
% |
|
27.43 |
% |
|
31.48 |
% |
|
26.22 |
% |
|
27.37 |
% |
| (3) | Represents the change in the fair value of servicing rights due to changes in valuation inputs or assumptions, net of gains or losses from derivatives hedging servicing rights. |
||
| (4) | Reflects employee severance expense and professional services associated with restructuring efforts subsequent to the announcement of Vision 2025 in July 2022. |
||
| (5) | Amounts represent the income tax effect using the aforementioned effective income tax rates, excluding certain discrete tax items. |
Reconciliation of Adjusted Diluted Weighted Average Shares Outstanding to Diluted Weighted Average Shares Outstanding ($ in thousands except per share data) (Unaudited) |
|
Three Months Ended |
|
Year Ended |
||||||||||||||||
|
Dec 31,
|
|
Sep 30,
|
|
Dec 31,
|
|
Dec 31,
|
|
Dec 31,
|
|||||||||||
Net loss attributable to loanDepot, Inc. |
|
$ |
(27,193 |
) |
|
$ |
(16,599 |
) |
|
$ |
(77,270 |
) |
|
$ |
(110,142 |
) |
|
$ |
(273,020 |
) |
Adjusted net loss |
|
|
(26,660 |
) |
|
|
(25,405 |
) |
|
|
(107,156 |
) |
|
|
(142,443 |
) |
|
|
(457,601 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Share Data: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted weighted average shares of Class A and Class D common stock outstanding |
|
|
326,288,272 |
|
|
|
175,962,804 |
|
|
|
168,617,732 |
|
|
|
174,906,063 |
|
|
|
156,030,350 |
|
Assumed pro forma conversion of weighted average Class C shares to Class A common stock (1) |
|
|
— |
|
|
|
147,171,089 |
|
|
|
150,278,656 |
|
|
|
147,789,060 |
|
|
|
163,541,101 |
|
Adjusted diluted weighted average shares outstanding |
|
|
326,288,272 |
|
|
|
323,133,893 |
|
|
|
318,896,388 |
|
|
|
322,695,123 |
|
|
|
319,571,451 |
|
(1) |
Reflects the assumed pro forma exchange and conversion of anti-dilutive Class C common shares. For the three months ended December 31, 2023, Class C common shares were dilutive and included in diluted weighted average shares of Class A common stock outstanding in the table above. |
Reconciliation of Net Income (Loss) to Adjusted EBITDA (LBITDA) ($ in thousands) (Unaudited) |
|
Three Months Ended |
|
Year Ended |
||||||||||||||||
|
Dec 31,
|
|
Sep 30,
|
|
Dec 31,
|
|
Dec 31,
|
|
Dec 31,
|
|||||||||||
Net loss |
|
$ |
(59,771 |
) |
|
$ |
(34,262 |
) |
|
$ |
(157,762 |
) |
|
$ |
(235,512 |
) |
|
$ |
(610,385 |
) |
Interest expense - non-funding debt (1) |
|
|
45,484 |
|
|
|
42,504 |
|
|
|
40,390 |
|
|
|
174,103 |
|
|
|
124,060 |
|
Income tax benefit |
|
|
(14,174 |
) |
|
|
(5,205 |
) |
|
|
(16,318 |
) |
|
|
(42,796 |
) |
|
|
(79,592 |
) |
Depreciation and amortization |
|
|
9,922 |
|
|
|
10,592 |
|
|
|
10,085 |
|
|
|
41,261 |
|
|
|
42,195 |
|
Change in fair value of servicing rights, net of hedging gains and losses(2) |
|
|
22,824 |
|
|
|
702 |
|
|
|
18,846 |
|
|
|
45,692 |
|
|
|
(39,755 |
) |
Stock-based compensation expense |
|
|
6,375 |
|
|
|
3,940 |
|
|
|
8,789 |
|
|
|
21,993 |
|
|
|
20,583 |
|
Restructuring charges |
|
|
3,517 |
|
|
|
2,004 |
|
|
|
5,178 |
|
|
|
11,811 |
|
|
|
25,126 |
|
Loss on disposal of fixed assets |
|
|
325 |
|
|
|
93 |
|
|
|
1,568 |
|
|
|
1,430 |
|
|
|
12,594 |
|
Goodwill impairment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
40,736 |
|
Other impairment (recovery) |
|
|
455 |
|
|
|
129 |
|
|
|
2,388 |
|
|
|
925 |
|
|
|
17,500 |
|
Adjusted EBITDA (LBITDA) |
|
$ |
14,957 |
|
|
$ |
20,497 |
|
|
$ |
(86,836 |
) |
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$ |
18,907 |
|
|
$ |
(446,938 |
) |
|
|
|
|
|
|
|
|
|
|
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| (1) | Represents other interest expense, which includes gain on extinguishment of debt and amortization of debt issuance costs, in the Company’s consolidated statements of operations. |
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| (2) | Represents the change in the fair value of servicing rights due to changes in valuation inputs or assumptions, net of gains or losses from derivatives hedging servicing rights. |
Forward-Looking Statements
This press release may contain "forward-looking statements," which reflect loanDepot's current views with respect to, among other things, our business strategies, including the Vision 2025 plan, including our expanded productivity program, our progress toward run-rate profitability, our HELOC product, financial condition and liquidity, competitive position, industry and regulatory environment, potential growth opportunities, the effects of competition, operations and financial performance. You can identify these statements by the use of words such as "outlook," "potential," "continue," "may," "seek," "approximately," "predict," "believe," "expect," "plan," "intend," "estimate," “project,” or "anticipate" and similar expressions or the negative versions of these words or comparable words, as well as future or conditional verbs such as "will," "should," "would" and "could." These forward-looking statements are based on current available operating, financial, economic and other information, and are not guarantees of future performance and are subject to risks, uncertainties and assumptions, including but not limited to, the following: our ability to achieve the expected benefits of our Vision 2025 plan and the success of our cost-reduction initiatives, such as the expanded productivity program; our ability to achieve run-rate profitability; our loan production volume; our ability to maintain an operating platform and management system sufficient to conduct our business; our ability to maintain warehouse lines of credit and other sources of capital and liquidity; impacts of cybersecurity incident, cyberattacks, information or security breaches and technology disruptions or failures, of ours or of our third party vendors; the outcome of legal proceedings to which we are a party; adverse changes in macroeconomic and
About loanDepot
loanDepot (NYSE: LDI) is a leading provider of lending solutions that make the American dream of homeownership more accessible and achievable for all, especially the increasingly diverse communities of first-time homebuyers, through a broad suite of lending and real estate services that simplify one of life's most complex transactions. Since its launch in 2010, the company has been recognized as an innovator, using its industry-leading technology to deliver a superior customer experience. Our digital-first approach makes it easier, faster and less stressful to purchase or refinance a home. Today, as one of the largest non-bank lenders in the country, loanDepot and its mellohome operating unit offer an integrated platform of lending, loan servicing, real estate and home services that support customers along their entire homeownership journey. Headquartered in
LDI-IR
View source version on businesswire.com: https://www.businesswire.com/news/home/20240312180152/en/
Investor Relations Contact:
Gerhard Erdelji
Senior Vice President, Investor Relations
(949) 822-4074
gerdelji@loandepot.com
Media Contact:
Rebecca Anderson
Senior Vice President, Communications & Public Relations
(949) 822-4024
rebeccaanderson@loandepot.com
Source: loanDepot, Inc.
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