Decreased net loss by 39% on expense
reduction; increased cash balances by 20% to $1.14 billion
- Lower market volumes and the exit of wholesale channel
fueled revenue decrease of $34.4
million, or 11%.
- Reduced total expenses by $125.5
million, or 22%, from second quarter primarily driven by
right-sizing staffing levels, reduced marketing spend, and lower
third-party costs.
- Company expects to achieve Vision 2025 annualized expense
savings target of $400 million by
year-end 2022.
- Net loss reduced 38.6% to $137.5
million in third quarter from second quarter, driven by
expense reductions which more than offset lower revenues.
- Company increased already strong cash balance to
$1.14 billion at end of third
quarter.
- Substantially completed transition of servicing portfolio to
in-house platform, improving customer experience and increasing
cross-sell opportunities.
- Roll-out of digital HELOC solution commenced, providing
customers fast, easy way to access cash from their home
equity.
FOOTHILL
RANCH, Calif., Nov. 8, 2022
/PRNewswire/ -- loanDepot, Inc. (NYSE: LDI), (together with its
subsidiaries, "loanDepot" or the "Company"), today announced
results for the third quarter ended September 30,
2022.
"loanDepot made significant progress on our previously announced
goals for Vision 2025, including right-sizing the company for
current and expected market conditions, launching our digital HELOC
solution, and significantly enhancing our liquidity position," said
President and Chief Executive Officer Frank
Martell. "We aggressively reduced our costs, exited the
wholesale channel, and narrowed our losses during the third quarter
in line with our previously announced targets. We are firmly on
pace to meet our expense reduction goal of an annualized
$400 million for the second half of
2022, and at the same time, we have substantially increased our
cash position. Looking ahead, we have built our expense reduction
plan to size the company appropriately for a mortgage market that
we believe will total approximately $1.5
trillion in 2023.
"We are excited about the launch of our digital HELOC, which we
expect will be a meaningful contributor to revenues in 2023. This
unique digital solution has been launched in several markets and
provides our customers with an attractive option to access their
home equity. With the value of home equity at an all-time high,
many homeowners would greatly benefit from an easy and fast way to
access cash while preserving their historically low interest rate
first mortgage. Our HELOC launch is an important step in advancing
our goal of adding more products and services that will benefit our
customers, diversify our revenues, and generate profitable
growth.
"As we look toward 2023, with a consistent track record of
delivering on Vision 2025 strategy, we believe we are well
positioned to navigate what is likely a challenging mortgage
market. We will continue to focus on driving higher revenues while
delivering outstanding quality and service levels, and returning to
sustained profitability as we implement Vision 2025 and as the
mortgage market resets."
Third Quarter Highlights:
Financial Summary
|
Three Months
Ended
|
|
Nine Months
Ended
|
($ in thousands except
per
share data)
(Unaudited)
|
Sep 30,
2022
|
|
Jun 30,
2022
|
|
Sep 30,
2021
|
|
Sep 30,
2022
|
|
Sep 30,
2021
|
Rate lock
volume
|
$ 12,032,026
|
|
$ 19,596,763
|
|
$ 43,673,515
|
|
$ 61,620,241
|
|
$
131,502,157
|
Pull through weighted
lock
volume(1)
|
8,755,082
|
|
12,412,894
|
|
30,354,123
|
|
40,968,021
|
|
93,603,559
|
Loan origination
volume
|
9,849,927
|
|
15,995,055
|
|
31,985,805
|
|
47,395,713
|
|
107,959,122
|
Gain on sale
margin(2)
|
1.80 %
|
|
1.16 %
|
|
2.84 %
|
|
1.66 %
|
|
2.71 %
|
Pull through weighted
gain on
sale margin(3)
|
2.03 %
|
|
1.50 %
|
|
2.99 %
|
|
1.92 %
|
|
3.13 %
|
Financial
Results
|
|
|
|
|
|
|
|
|
|
Total
revenue
|
$
274,192
|
|
$
308,639
|
|
$
923,756
|
|
$
1,086,141
|
|
$
3,019,678
|
Total
expense
|
435,125
|
|
560,657
|
|
744,771
|
|
1,602,038
|
|
2,364,054
|
Net (loss)
income
|
(137,482)
|
|
(223,822)
|
|
154,277
|
|
(452,623)
|
|
608,414
|
Diluted (loss) earnings
per
share
|
$
(0.37)
|
|
$
(0.66)
|
|
$
0.40
|
|
$
(1.29)
|
|
$0.82
|
Non-GAAP
Financial
Measures(4)
|
|
|
|
|
|
|
|
|
|
Adjusted total
revenue
|
$ 249,663
|
|
$ 273,273
|
|
$
948,770
|
|
$
1,027,540
|
|
$
3,015,540
|
Adjusted net (loss)
income
|
(116,846)
|
|
(168,863)
|
|
147,533
|
|
(367,101)
|
|
524,564
|
Adjusted (LBITDA)
EBITDA
|
(114,133)
|
|
(191,510)
|
|
238,261
|
|
(380,049)
|
|
805,622
|
Adjusted diluted
(loss)
earnings per share(5)
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
|
(1)
|
Pull through weighted
rate lock volume is the unpaid 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.
|
(5)
|
Omitted adjusted
diluted (loss) earnings per share measures that included the impact
of assumed exchange of shares to the extent the exchange was
antidilutive.
|
Vision 2025
Our Vision 2025 plan is designed to address current and
anticipated mortgage market conditions and position loanDepot for
sustainable long-term value creation. Building on the foundation of
our strong balance sheet and liquidity, we have achieved the
following since the announcement of Vision 2025:
- In partnership with National HomeCorp., a Georgia-based homebuilder specializing in
affordable single-family homes, we formed NHC Mortgage, a new joint
venture partnership advancing our goal of purpose-driven lending
and providing credit to underserved communities.
- Substantially completed the transition of our servicing
portfolio to our in-house platform.
- Recently began the phased national roll out of our digital
HELOC.
- Added Joseph Grassi as our Chief
Risk Officer and Gregory Smallwood
as our Chief Legal Officer enabling the Company to increase the
effectiveness of our quality and compliance initiatives.
- Achieved quarterly non-volume related expense reductions of
$68.9 million from the second
quarter, an annualized impact of $275.5
million.
- Reduced quarterly volume related expenses, consisting of
commissions and direct origination expenses, by $56.6 million from the second quarter.
- Incurred expenses related to the Vision 2025 plan during the
quarter of $37.2 million, including
$20.8 million of lease and other
asset impairments, $9.4 million of
personnel related expenses, and $7.0
million of professional services fees. Second quarter Vision
2025 expenses totaled $54.6
million.
Operational Results
- Pull through weighted lock volume of $8.8 billion for the three months ended
September 30, 2022, resulted in
quarterly total revenue of $274.2
million, a decrease of $34.4
million, or 11%, from the second quarter of 2022 due to
higher interest rates reducing borrower demand.
- Loan origination volume for the third quarter of 2022 was
$9.8 billion, a decrease of
$6.1 billion or 38% from the second
quarter of 2022.
- Gain on origination and sales of loans, net increased from the
second quarter of 2022 due primarily to a reduction in loan loss
provision somewhat offset by lower pull through weighted lock
volume.
- Purchase volume increased to 70% of total loans during the
third quarter, up from 59% of total loans during the second quarter
of 2022 and 34% of total loans during the third quarter of 2021,
reflecting our progress in executing a purpose-driven lending
strategy of assisting our customers in buying a home.
- For the twelve months ended September
30, 2022, our preliminary organic refinance consumer direct
recapture rate1 remained strong at 71%. This highlights
the efficacy of our marketing efforts, the strength of our customer
relationships, and the value of our servicing portfolio for
additional revenue opportunities.
- Net loss for the third quarter of 2022 of $137.5 million as compared to net loss of
$223.8 million in the second quarter
of 2022. Net loss decreased quarter over quarter primarily due to a
decrease in total expenses offset somewhat by lower revenues due to
lower rate lock volume.
- Adjusted LBITDA for the third quarter of 2022 was $114.1 million as compared to adjusted LBITDA of
$191.5 million for the second quarter
of 2022. Adjusted (LBITDA) EBITDA excludes the impact of fair value
changes of our mortgage servicing rights, net of hedging results,
impairment charges, and other operating expenses.
Our outlook for the fourth quarter of 2022 is
- Origination volume of between $4
billion and $7 billion.
- Pull-through weighted rate lock volume of between $3 billion and $6
billion.
- Pull-through weighted gain on sale margin of between 210 basis
points and 270 basis points.
Strategic Channel Overview
Our purpose driven origination strategy ensures we can serve
customers in the way they want to be served, with the right
mortgage professional, with the right product, at the right price,
and at the right time. Complementing our origination strategy is
our servicing portfolio, which ensures we can serve the customer
through their entire homeownership journey.
Retail Channel
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
($ in
thousands)
(Unaudited)
|
|
Sep 30,
2022
|
|
Jun 30,
2022
|
|
Sep 30,
2021
|
|
Sep 30,
2022
|
|
Sep 30,
2021
|
Volume data:
|
|
|
|
|
|
|
Rate locks
|
|
$
8,709,388
|
|
$
12,584,274
|
|
$
35,924,760
|
|
$
43,142,881
|
|
$
106,924,605
|
Loan
originations
|
|
6,331,564
|
|
10,877,875
|
|
24,938,035
|
|
33,688,829
|
|
86,247,597
|
Gain on sale
margin
|
|
2.34 %
|
|
1.03 %
|
|
3.28 %
|
|
1.87 %
|
|
3.02 %
|
Partner Channel
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
($ in
thousands)
(Unaudited)
|
|
Sep 30,
2022
|
|
Jun 30,
2022
|
|
Sep 30,
2021
|
|
Sep 30,
2022
|
|
Sep 30,
2021
|
Volume data:
|
|
|
|
|
|
|
Rate locks
|
|
$
3,322,638
|
|
$
7,012,489
|
|
$
7,748,755
|
|
$
18,477,360
|
|
$
24,577,552
|
Loan
originations
|
|
3,518,363
|
|
5,117,180
|
|
7,047,770
|
|
13,706,884
|
|
21,711,525
|
Gain on sale
margin
|
|
0.84 %
|
|
1.45 %
|
|
1.24 %
|
|
1.15 %
|
|
1.49 %
|
Our Partner Channel originates loans through our network of
approved mortgage brokers, as well as a series of exclusive joint
ventures with some of the nation's largest homebuilders and
depositories, who market our broad spectrum of products utilizing
our innovative mello® technology platform to efficiently
underwrite, process and fund mortgage loans, while delivering an
exceptional customer experience.
The decrease in volume in our Partner Channel since the second
quarter of 2022 primarily reflects our decision to exit the
wholesale origination business. The decrease in the Partner
Channel's gain on sale margin also reflects our exit of the
wholesale origination business as new fallout adjusted interest
rate locks from that business decreased significantly during the
quarter.
Servicing
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
Servicing Revenue
Data:
($ in
thousands)
(Unaudited)
|
|
Sep 30,
2022
|
|
Jun 30,
2022
|
|
Sep 30,
2021
|
|
Sep 30,
2022
|
|
Sep 30,
2021
|
Due to changes in
valuation inputs
or assumptions
|
|
$
75,366
|
|
$
98,795
|
|
$
(3,461)
|
|
$
373,158
|
|
$
98,295
|
Due to
collection/realization of cash
flows
|
|
(49,519)
|
|
(66,380)
|
|
(99,230)
|
|
(193,022)
|
|
(323,107)
|
Realized losses on
sales of servicing
rights
|
|
(13,489)
|
|
(2,493)
|
|
(14,218)
|
|
(5,949)
|
|
(8,224)
|
Net loss from
derivatives hedging
servicing rights
|
|
(50,837)
|
|
(63,429)
|
|
(21,553)
|
|
(314,557)
|
|
(94,158)
|
Changes in fair value
of servicing
rights, net
|
|
$
(38,479)
|
|
$
(33,507)
|
|
$ (138,462)
|
|
$ (140,370)
|
|
$ (327,194)
|
|
|
|
|
|
|
|
|
|
|
|
Servicing fee
income
|
|
$
113,544
|
|
$
117,326
|
|
$
102,429
|
|
$
341,929
|
|
$
279,738
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
Servicing Rights, at
Fair Value:
($ in
thousands)
(Unaudited)
|
|
Sep 30,
2022
|
|
Jun 30,
2022
|
|
Sep 30,
2021
|
|
Sep 30,
2022
|
|
Sep 30,
2021
|
Balance at beginning of
period
|
|
$
2,204,593
|
|
$
2,078,187
|
|
$
1,776,395
|
|
$
1,999,402
|
|
$
1,124,302
|
Additions
|
|
124,244
|
|
180,455
|
|
345,882
|
|
574,459
|
|
1,302,884
|
Sales proceeds,
net
|
|
(341,415)
|
|
(86,464)
|
|
(182,892)
|
|
(740,728)
|
|
(365,680)
|
Changes in fair
value:
|
|
|
|
|
|
|
|
|
|
|
Due to changes in
valuation
inputs or assumptions
|
|
75,366
|
|
98,795
|
|
(3,461)
|
|
373,158
|
|
98,295
|
Due to
collection/realization of
cash flows
|
|
(49,519)
|
|
(66,380)
|
|
(99,230)
|
|
(193,022)
|
|
(323,107)
|
Balance at end of
period (1)
|
|
$
2,013,269
|
|
$
2,204,593
|
|
$
1,836,694
|
|
$
2,013,269
|
|
$
1,836,694
|
(1)
|
Balances are net of
$16.8 million, $9.1 million, and $4.8 million of servicing rights
liability as of September 30, 2022, June 30, 2022, and September
30, 2021, respectively.
|
|
|
|
%
Change
|
Servicing Portfolio
Data:
($ in
thousands)
(Unaudited)
|
Sep 30,
2022
|
|
Jun 30,
2022
|
|
Sep 30,
2021
|
|
Sep-22
vs
Jun-22
|
|
Sep-22
vs
Sep-21
|
|
|
|
|
|
|
|
|
|
|
Servicing portfolio
(unpaid
principal balance)
|
$
139,709,633
|
|
$
155,217,012
|
|
$
145,305,182
|
|
(10.0) %
|
|
(3.9) %
|
|
|
|
|
|
|
|
|
|
|
Total servicing
portfolio (units)
|
463,471
|
|
507,231
|
|
469,019
|
|
(8.6)
|
|
(1.2)
|
|
|
|
|
|
|
|
|
|
|
60+ days delinquent
($)
|
$
1,365,774
|
|
$ 1,511,871
|
|
$
1,679,691
|
|
(9.7)
|
|
(18.7)
|
60+ days delinquent
(%)
|
1.0 %
|
|
1.0 %
|
|
1.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Servicing rights, net
to UPB
|
1.4 %
|
|
1.4 %
|
|
1.3 %
|
|
|
|
|
The decrease in unpaid principal balance of our servicing
portfolio was driven primarily by sales of $18.6 billion of unpaid principal balance during
the quarter.
As of September 30, 2022, approximately 0.2%, or
$319.5 million, of our servicing
portfolio was in active forbearance. This represents an aggregate
decrease from 0.4%, or $587.8 million
as of June 30, 2022.
Balance Sheet Highlights
|
|
|
|
|
|
|
%
Change
|
($ in
thousands)
(Unaudited)
|
Sep 30,
2022
|
|
Jun 30,
2022
|
|
Sep 30,
2021
|
|
Sep-22
vs
Jun-22
|
|
Sep-22
vs
Sep-21
|
Cash and cash
equivalents
|
$
1,143,948
|
|
$
954,930
|
|
$
506,608
|
|
19.8 %
|
|
125.8 %
|
Loans held for sale, at
fair value
|
2,692,820
|
|
4,656,338
|
|
8,873,736
|
|
(42.2)
|
|
(69.7)
|
Servicing rights, at
fair value
|
2,030,026
|
|
2,213,700
|
|
1,841,512
|
|
(8.3)
|
|
10.2
|
Total assets
|
7,378,536
|
|
9,195,187
|
|
12,749,278
|
|
(19.8)
|
|
(42.1)
|
Warehouse and other
lines of
credit
|
2,529,436
|
|
4,265,343
|
|
8,212,142
|
|
(40.7)
|
|
(69.2)
|
Total
liabilities
|
6,300,039
|
|
7,981,324
|
|
11,091,114
|
|
(21.1)
|
|
(43.2)
|
Total equity
|
1,078,497
|
|
1,213,863
|
|
1,658,164
|
|
(11.2)
|
|
(35.0)
|
The increase in cash and cash equivalents from June 30,
2022, included the proceeds from MSR sales and loans sold in excess
of loans originated during the quarter. A decrease in loans held
for sale at September 30, 2022, resulted in a corresponding
decrease in the balance on our warehouse lines of credit.
Total funding capacity with our lending partners decreased to
$5.7 billion at September 30,
2022 from $9.9 billion at
June 30, 2022. The decrease of $4.2
billion was primarily due to our decision to reduce our
borrowing capacity, reflecting lower volume expectations. Available
borrowing capacity was $3.1 billion
at September 30, 2022.
Consolidated Statements of Operations
($ in thousands except
per share data)
(Unaudited)
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Sep 30,
2022
|
|
Jun 30,
2022
|
|
Sep 30,
2021
|
|
Sep 30,
2022
|
|
Sep 30,
2021
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
Interest
income
|
$
51,202
|
|
$
62,722
|
|
$
71,020
|
|
$
166,888
|
|
$
187,625
|
Interest
expense
|
(41,408)
|
|
(39,923)
|
|
(56,785)
|
|
(121,220)
|
|
(165,130)
|
Net interest
income
|
9,794
|
|
22,799
|
|
14,235
|
|
45,668
|
|
22,495
|
|
|
|
|
|
|
|
|
|
|
Gain on origination
and sale of
loans, net
|
156,300
|
|
146,562
|
|
821,275
|
|
665,993
|
|
2,647,328
|
Origination income,
net
|
21,268
|
|
39,108
|
|
86,601
|
|
119,449
|
|
280,824
|
Servicing fee
income
|
113,544
|
|
117,326
|
|
102,429
|
|
341,929
|
|
279,738
|
Change in fair value
of servicing
rights, net
|
(38,479)
|
|
(33,507)
|
|
(138,462)
|
|
(140,370)
|
|
(327,194)
|
Other
income
|
11,765
|
|
16,351
|
|
37,678
|
|
53,472
|
|
116,487
|
Total net
revenues
|
274,192
|
|
308,639
|
|
923,756
|
|
1,086,141
|
|
3,019,678
|
|
|
|
|
|
|
|
|
|
|
EXPENSES:
|
|
|
|
|
|
|
|
|
|
Personnel
expense
|
218,819
|
|
296,569
|
|
449,152
|
|
861,382
|
|
1,523,012
|
Marketing and
advertising expense
|
42,940
|
|
60,837
|
|
131,971
|
|
205,289
|
|
355,730
|
Direct origination
expense
|
19,463
|
|
33,996
|
|
49,559
|
|
106,616
|
|
146,553
|
General and
administrative expense
|
83,412
|
|
63,927
|
|
50,013
|
|
197,089
|
|
149,984
|
Occupancy
expense
|
9,889
|
|
9,388
|
|
9,686
|
|
28,673
|
|
28,956
|
Depreciation and
amortization
|
10,243
|
|
11,323
|
|
8,688
|
|
32,110
|
|
25,827
|
Servicing
expense
|
14,221
|
|
10,741
|
|
22,879
|
|
46,472
|
|
76,731
|
Other interest
expense
|
36,138
|
|
33,140
|
|
22,823
|
|
83,671
|
|
57,261
|
Goodwill
impairment
|
—
|
|
40,736
|
|
—
|
|
40,736
|
|
—
|
Total
expenses
|
435,125
|
|
560,657
|
|
744,771
|
|
1,602,038
|
|
2,364,054
|
|
|
|
|
|
|
|
|
|
|
(Loss) income
before income
taxes
|
(160,933)
|
|
(252,018)
|
|
178,985
|
|
(515,897)
|
|
655,624
|
Income tax (benefit)
expense
|
(23,451)
|
|
(28,196)
|
|
24,708
|
|
(63,274)
|
|
47,210
|
Net (loss)
income
|
(137,482)
|
|
(223,822)
|
|
154,277
|
|
(452,623)
|
|
608,414
|
Net (loss) income
attributable to
noncontrolling interests
|
(77,401)
|
|
(122,894)
|
|
102,802
|
|
(256,873)
|
|
503,503
|
Net (loss) income
attributable to
loanDepot, Inc.
|
$
(60,081)
|
|
$
(100,928)
|
|
$
51,475
|
|
$ (195,750)
|
|
$
104,911
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) earnings
per share
|
$
(0.37)
|
|
$
(0.66)
|
|
$
0.40
|
|
$
(1.29)
|
|
$
0.82
|
Diluted (loss)
earnings per share
|
$
(0.37)
|
|
$
(0.66)
|
|
$
0.40
|
|
$
(1.29)
|
|
$
0.82
|
Consolidated Balance Sheets
($ in
thousands)
|
Sep 30,
2022
|
|
Jun 30,
2022
|
|
Dec 31,
2021
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
$
1,143,948
|
|
$
954,930
|
|
$
419,571
|
Restricted
cash
|
160,926
|
|
194,645
|
|
201,025
|
Accounts receivable,
net
|
108,253
|
|
91,766
|
|
56,183
|
Loans held for sale,
at fair value
|
2,692,820
|
|
4,656,338
|
|
8,136,817
|
Derivative assets, at
fair value
|
316,647
|
|
153,607
|
|
194,665
|
Servicing rights, at
fair value
|
2,030,026
|
|
2,213,700
|
|
2,006,712
|
Trading securities, at
fair value
|
97,210
|
|
105,308
|
|
72,874
|
Property and
equipment, net
|
98,944
|
|
111,443
|
|
104,262
|
Operating lease
right-of-use asset
|
39,480
|
|
48,443
|
|
55,646
|
Prepaid expenses and
other assets
|
115,452
|
|
140,145
|
|
140,315
|
Loans eligible for
repurchase
|
554,892
|
|
506,454
|
|
363,373
|
Investments in joint
ventures
|
19,938
|
|
18,408
|
|
18,553
|
Goodwill and other
intangible assets, net
|
—
|
|
—
|
|
42,317
|
Total
assets
|
$
7,378,536
|
|
$
9,195,187
|
|
$ 11,812,313
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
LIABILITIES:
|
|
|
|
|
|
Warehouse and other
lines of credit
|
$
2,529,436
|
|
$
4,265,343
|
|
$
7,457,199
|
Accounts payable and
accrued expenses
|
716,048
|
|
643,144
|
|
624,444
|
Derivative
liabilities, at fair value
|
149,837
|
|
72,758
|
|
37,797
|
Liability for loans
eligible for repurchase
|
554,892
|
|
506,454
|
|
363,373
|
Operating lease
liability
|
66,122
|
|
66,485
|
|
71,932
|
Debt obligations,
net
|
2,283,704
|
|
2,427,140
|
|
1,628,208
|
Total
liabilities
|
6,300,039
|
|
7,981,324
|
|
10,182,953
|
EQUITY:
|
|
|
|
|
|
Total
equity
|
1,078,497
|
|
1,213,863
|
|
1,629,360
|
Total liabilities and
equity
|
$
7,378,536
|
|
$
9,195,187
|
|
$ 11,812,313
|
Loan Origination and Sales Data
($ in
thousands)
(Unaudited)
|
|
Three Months
Ended
|
|
Sep 30,
2022
|
|
Jun 30,
2022
|
|
Sep 30,
2021
|
Loan origination
volume by type:
|
|
|
|
|
|
|
Conventional
conforming
|
|
$
6,002,765
|
|
$ 10,392,730
|
|
$ 23,621,149
|
FHA/VA/USDA
|
|
3,038,467
|
|
3,658,309
|
|
4,784,112
|
Jumbo
|
|
571,509
|
|
1,595,843
|
|
3,049,321
|
Other
|
|
237,186
|
|
348,173
|
|
531,223
|
Total
|
|
$
9,849,927
|
|
$ 15,995,055
|
|
$ 31,985,805
|
|
|
|
|
|
|
|
Loan origination
volume by channel:
|
|
|
|
|
|
|
Retail
|
|
$
6,331,564
|
|
$ 10,877,875
|
|
$ 24,938,035
|
Partnership
|
|
3,518,363
|
|
5,117,180
|
|
7,047,770
|
Total
|
|
$
9,849,927
|
|
$ 15,995,055
|
|
$ 31,985,805
|
|
|
|
|
|
|
|
Loan origination
volume by purpose:
|
|
|
|
|
|
|
Purchase
|
|
$
6,938,408
|
|
$
9,500,164
|
|
$ 11,008,399
|
Refinance
|
|
2,911,519
|
|
6,494,891
|
|
20,977,406
|
Total
|
|
$
9,849,927
|
|
$ 15,995,055
|
|
$ 31,985,805
|
|
|
|
|
|
|
|
Loans
sold:
|
|
|
|
|
|
|
Servicing
retained
|
|
$
6,604,979
|
|
$ 10,568,649
|
|
$ 26,520,547
|
Servicing
released
|
|
5,132,350
|
|
7,342,889
|
|
5,672,551
|
Total
|
|
$ 11,737,329
|
|
$ 17,911,538
|
|
$ 32,193,098
|
|
|
|
|
|
|
|
Loan origination
margins:
|
|
|
|
|
|
|
Gain on sale
margin
|
|
1.80 %
|
|
1.16 %
|
|
2.84 %
|
Third 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 (888)
440-6385 using conference ID number 2021948. Please call five
minutes in advance to ensure that you are connected prior to the
call. A replay of the webcast and transcript will also be made
available on the Investor Relations website following the
conclusion of the event, or can be accessed by dialing (800)
770-2030 following the conclusion of the event through December 8, 2022.
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), the amortization of intangibles, 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, and Adjusted EBITDA (LBITDA). We
exclude from each of these non-GAAP financial measures the change
in fair value of MSRs and related hedging gains and losses as they
add volatility and are not indicative of the Company's operating
performance or results of operation. We also exclude stock
compensation expense, which is a non-cash expense, management fees,
IPO expenses, 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 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. 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
|
|
Nine Months
Ended
|
|
Sep 30,
2022
|
|
Jun 30,
2022
|
|
Sep 30,
2021
|
|
Sep 30,
2022
|
|
Sep 30,
2021
|
Total net
revenue
|
|
$ 274,192
|
|
$ 308,639
|
|
$ 923,756
|
|
$
1,086,141
|
|
$
3,019,678
|
Change in fair value
of servicing rights, net of
hedging gains and losses(1)
|
|
(24,529)
|
|
(35,366)
|
|
25,014
|
|
(58,601)
|
|
(4,138)
|
Adjusted total
revenue
|
|
$ 249,663
|
|
$ 273,273
|
|
$ 948,770
|
|
$
1,027,540
|
|
$
3,015,540
|
|
|
(1)
|
Represents the change
in the fair value of servicing rights attributable to changes in
assumptions, net of hedging gains and losses.
|
Reconciliation of
Net Income (Loss) to Adjusted
Net Income (Loss)
($ in
thousands)
(Unaudited)
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Sep 30,
2022
|
|
Jun 30,
2022
|
|
Sep 30,
2021
|
|
Sep 30,
2022
|
|
Sep 30,
2021
|
Net (loss) income
attributable to loanDepot, Inc.
|
|
$
(60,081)
|
|
$
(100,928)
|
|
$
51,475
|
|
$
(195,750)
|
|
$ 104,911
|
Net (loss) income from
the pro forma conversion of
Class C common shares to Class A common shares
(1)
|
|
(77,401)
|
|
(122,894)
|
|
102,802
|
|
(256,873)
|
|
503,503
|
Net (loss)
income
|
|
(137,482)
|
|
(223,822)
|
|
154,277
|
|
(452,623)
|
|
608,414
|
Adjustments to the
provision for income taxes(2)
|
|
20,124
|
|
31,952
|
|
(27,171)
|
|
66,787
|
|
(133,076)
|
Tax-effected net
(loss) income
|
|
(117,358)
|
|
(191,870)
|
|
127,106
|
|
(385,836)
|
|
475,338
|
Change in fair value
of servicing rights, net of
hedging gains and losses(3)
|
|
(24,529)
|
|
(35,366)
|
|
25,014
|
|
(58,601)
|
|
(4,138)
|
Change in fair value -
contingent consideration
|
|
—
|
|
—
|
|
(77)
|
|
—
|
|
(77)
|
Stock compensation
expense and management
fees
|
|
4,773
|
|
4,712
|
|
2,882
|
|
11,794
|
|
65,084
|
IPO
expenses
|
|
—
|
|
—
|
|
(54)
|
|
—
|
|
6,041
|
Loss on disposal of
fixed assets
|
|
11,026
|
|
—
|
|
—
|
|
11,026
|
|
—
|
Gain on extinguishment
of debt
|
|
—
|
|
—
|
|
—
|
|
(10,528)
|
|
—
|
Goodwill
impairment
|
|
—
|
|
40,736
|
|
—
|
|
40,736
|
|
—
|
Other
impairment
|
|
9,149
|
|
5,963
|
|
—
|
|
15,112
|
|
—
|
Tax effect of
adjustments(4)
|
|
93
|
|
6,962
|
|
(7,338)
|
|
9,196
|
|
(17,684)
|
Adjusted net (loss)
income
|
|
$
(116,846)
|
|
$
(168,863)
|
|
$ 147,533
|
|
$
(367,101)
|
|
$ 524,564
|
|
|
(1)
|
Reflects net income
(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
|
|
Nine Months
Ended
|
|
Sep 30,
2022
|
|
Jun 30,
2022
|
|
Sep 30,
2021
|
|
Sep 30,
2022
|
|
Sep 30,
2021
|
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)
|
|
5.00 %
|
|
5.00 %
|
|
5.43 %
|
|
5.00 %
|
|
5.43 %
|
Effective income tax
rate
|
|
26.00 %
|
|
26.00 %
|
|
26.43 %
|
|
26.00 %
|
|
26.43 %
|
|
|
(3)
|
Represents the change
in the fair value of servicing rights attributable to changes in
assumptions, net of hedging gains and losses.
|
(4)
|
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
|
|
Nine Months
Ended
|
|
Sep 30,
2022
|
|
Jun 30,
2022
|
|
Sep 30,
2021
|
|
Sep 30,
2022
|
|
Sep 30,
2021
|
Net (loss) income
attributable to loanDepot, Inc.
|
|
$
(60,081)
|
|
$
(100,928)
|
|
$
51,475
|
|
$
(195,750)
|
|
$ 104,911
|
Adjusted net (loss)
income
|
|
(116,846)
|
|
(168,863)
|
|
147,533
|
|
(367,101)
|
|
524,564
|
Share
Data:
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares of
Class A and Class D common stock
outstanding
|
|
162,464,369
|
|
153,822,380
|
|
130,297,565
|
|
151,803,928
|
|
127,941,331
|
Assumed pro forma
conversion of
weighted average Class C shares to
Class A common stock (1)
|
|
156,677,534
|
|
165,281,304
|
|
191,579,524
|
|
167,796,888
|
|
195,111,599
|
Adjusted diluted
weighted average
shares outstanding
|
|
319,141,903
|
|
319,103,684
|
|
321,877,089
|
|
319,600,816
|
|
323,052,930
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss) earnings
per share
|
|
$
(0.37)
|
|
$
(0.66)
|
|
$
0.40
|
|
$
(1.29)
|
|
$
0.82
|
Adjusted diluted (loss)
earnings per share(2)
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
|
(1)
|
Reflects the assumed
pro forma conversion of all outstanding shares of Class C common
stock to Class A common stock.
|
(2)
|
Omitted adjusted
diluted (loss) earnings per share measures that included the impact
of the assumed exchange of shares to the extent the exchange was
antidilutive.
|
Reconciliation of
Net (Loss) Income to
Adjusted (LBITDA) EBITDA
($ in
thousands)
(Unaudited)
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Sep 30,
2022
|
|
Jun 30,
2022
|
|
Sep 30,
2021
|
|
Sep 30,
2022
|
|
Sep 30,
2021
|
Net (Loss)
Income
|
|
$
(137,482)
|
|
$
(223,822)
|
|
$
154,277
|
|
$
(452,623)
|
|
$
608,414
|
Interest expense -
non-funding debt (1)
|
|
36,138
|
|
33,140
|
|
22,823
|
|
83,671
|
|
57,261
|
Income tax (benefit)
expense
|
|
(23,451)
|
|
(28,196)
|
|
24,708
|
|
(63,274)
|
|
47,210
|
Depreciation and
amortization
|
|
10,243
|
|
11,323
|
|
8,688
|
|
32,110
|
|
25,827
|
Change in fair value of
servicing rights, net of
hedging gains and
losses(2)
|
|
(24,529)
|
|
(35,366)
|
|
25,014
|
|
(58,601)
|
|
(4,138)
|
Change in fair value -
contingent
consideration
|
|
—
|
|
—
|
|
(77)
|
|
—
|
|
(77)
|
Stock compensation
expense and
management fees
|
|
4,773
|
|
4,712
|
|
2,882
|
|
11,794
|
|
65,084
|
IPO expense
|
|
—
|
|
—
|
|
(54)
|
|
—
|
|
6,041
|
Loss on disposal of
fixed assets
|
|
11,026
|
|
—
|
|
—
|
|
11,026
|
|
—
|
Goodwill
impairment
|
|
—
|
|
40,736
|
|
—
|
|
40,736
|
|
—
|
Other
impairment
|
|
9,149
|
|
5,963
|
|
—
|
|
15,112
|
|
—
|
Adjusted (LBITDA)
EBITDA
|
|
$
(114,133)
|
|
$
(191,510)
|
|
$
238,261
|
|
$
(380,049)
|
|
$
805,622
|
|
|
(1)
|
Represents other
interest expense, which includes gain on extinguishment of debt and
amortization of debt issuance costs, in the Company's consolidated
statement of operations.
|
(2)
|
Represents the change
in the fair value of servicing rights attributable to changes in
assumptions, net of hedging gains and losses.
|
Forward-Looking Statements
This press release may contain "forward-looking statements,"
which reflect loanDepot's current views with respect to, among
other things, its business strategies, including the Vision 2025
plan, our digital 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 the risks in the "Risk Factors" section of
loanDepot, Inc.'s Annual Report on Form 10-K for the year ended
December 31, 2021 and Quarterly
Reports on Form 10-Q , 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 digital commerce company committed to
serving its customers throughout the home ownership journey. Since
its launch in 2010, loanDepot has revolutionized the mortgage
industry with a digital-first approach that makes it easier, faster
and less stressful to purchase or refinance a home. Today, as one
of the nation's largest non-bank retail mortgage lenders, loanDepot
enables customers to achieve the American dream of homeownership
through a broad suite of lending and real estate services that
simplify one of life's most complex transactions. With headquarters
in Southern California and offices
nationwide, loanDepot is committed to serving the communities in
which its team lives and works through a variety of local, regional
and national philanthropic efforts.
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
LDI-IR
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.
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multimedia:https://www.prnewswire.com/news-releases/loandepot-announces-third-quarter-2022-financial-results-301672194.html
SOURCE loanDepot, Inc.