Subjects: EARNINGS, Conference Call, Webcast
loanDepot Announces Fourth Quarter and Year-End 2023 Financial Results
loanDepot, Inc. (NYSE: LDI), (together with its subsidiaries, "loanDepot" or the "Company"), a leading provider of lending solutions that make the American dream of homeownership more accessible and achievable for all, today announced results for the fourth quarter and year-ended December 31, 2023.
"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," Martell added.
"During the course of 2023, we reduced our cost structure by $693 million," said Chief Financial Officer David Hayes. "We expect significant additional benefits from our previously announced $120 million annualized cost reduction program during 2024. Our cost reset has allowed us to maintain a strong liquidity position and at the same time support reinvestment in critical platforms and programs. As the housing and mortgage markets begin to recover, we believe we enter 2024 positioned for success through a relentless focus on delivering against the pillars of Vision 2025."
Fourth Quarter Highlights:
Financial Summary
|
Three Months Ended |
|
Year Ended |
||||||||||||||||
($ 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 since the third quarter of 2023, primarily due to higher restructuring related charges, lease and other asset impairment costs, and legal expenses.
- Incurred restructuring charges of $3.5 million and lease and other asset impairment charges of $0.8 million during the quarter for a total of $4.3 million, an increase of $2.1 million from the third quarter of 2023.
- Accrued $3.7 million of legal expenses related to the expected settlement of outstanding litigation compared to $2.0 million accrued during the third quarter of 2023.
- Pull through weighted lock volume of $4.4 billion for the fourth quarter of 2023, a decrease of $1.3 billion or 22% from the third quarter of 2023, resulting in quarterly total revenue of $228.6 million, a decrease of $37.0 million, or 14%, over the same period.
- Loan origination volume for the fourth quarter of 2023 was $5.4 billion, a decrease of $0.7 billion or 12% from the third quarter of 2023.
- Purchase volume increased to 76% of total loans originated during the fourth quarter, up from 71% of total loans originated during the third quarter of 2023 and flat to 76% 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 of 69%.
- Net loss for the fourth quarter of 2023 of $59.8 million as compared to net loss of $34.3 million in the third quarter of 2023. Net loss increased quarter over quarter primarily due to revenues decreasing more than the decrease in expenses.
- Adjusted net loss for the fourth quarter of 2023 was $26.7 million as compared to adjusted net loss of $25.4 million for the third quarter of 2023.
Outlook for the first quarter of 2024
- Origination volume of between $3.5 billion and $5.5 billion.
- Pull-through weighted rate lock volume of between $3.5 billion and $5.5 billion.
- Pull-through weighted gain on sale margin of between 270 basis points and 300 basis points.
1 |
We define organic refinance consumer direct recapture rate as the total unpaid principal balance ("UPB") of loans in our servicing portfolio that are paid in full for purposes of refinancing the loan on the same property, with the Company acting as lender on both the existing and new loan, divided by the UPB of all loans in our servicing portfolio that paid in full for the purpose of refinancing the loan on the same property. The recapture rate is finalized following the publication date of this release when external data becomes available. |
Servicing
|
|
Three Months Ended |
|
Year Ended |
||||||||||||||||
Servicing Revenue Data: ($ 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 $14.0 million, $14.7 million, and $12.3 million of servicing rights liability as of December 31, 2023, September 30, 2023, and December 31, 2022, respectively. |
|
|
|
% Change |
||||||||||||||
Servicing Portfolio Data: ($ 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 $3.1 billion at December 31, 2023, and $3.9 billion at September 30, 2023. Available borrowing capacity was $1.2 billion at December 31, 2023.
Consolidated Statements of Operations
($ 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 U.S. federal, state and local income taxes. Adjustments to Diluted Weighted Average Shares Outstanding assumes the pro forma conversion of weighted average Class C shares to Class A common stock. These non-GAAP measures have limitations as analytical tools and should not be considered in isolation or as a substitute for revenue, net income, or any other operating performance measure calculated in accordance with GAAP, and may not be comparable to a similarly titled measure reported by other companies. Some of these limitations are:
- 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 U.S. GAAP measurements, to assist in the evaluation of operating performance. See below for a reconciliation of these non-GAAP measures to their most comparable U.S. GAAP measures.
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 100% of LD Holdings. |
|
|
Three Months Ended |
|
Year Ended |
|||||||||||
|
Dec 31,
|
|
Sep 30,
|
|
Dec 31,
|
|
Dec 31,
|
|
Dec 31,
|
||||||
Statutory U.S. federal income tax rate |
|
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 |
) |
|
$ |
18,907 |
|
|
$ |
(446,938 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
| (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. |
||
| (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 U.S residential real estate and mortgage market conditions, including increases in interest rate levels; changing federal, state and local laws, as well as changing regulatory enforcement policies and priorities; and other risks detailed in the "Risk Factors" section of loanDepot, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2022 and Quarterly Reports on Form 10-Q as well as any subsequent filings with the Securities and Exchange Commission, which are difficult to predict. Therefore, current plans, anticipated actions, financial results, as well as the anticipated development of the industry, may differ materially from what is expressed or forecasted in any forward-looking statement. loanDepot does not undertake any obligation to publicly update or revise any forward-looking statement to reflect future events or circumstances, except as required by applicable law.
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 Southern California and with hundreds of local market offices nationwide, loanDepot's passionate team is dedicated to making a positive difference in the lives of their customers every day.
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