Guild posts origination gains in Q1, declares a dividend

Guild Holdings Company, parent company of Guild Mortgage, recorded a 6% increase in mortgage originations and much higher revenue levels in the first quarter of 2024 than in 2023. Net income saw substantial improvements as the company continues to pursue an active acquisition strategy, according to an earnings report for Q1 released on Thursday.

“I am pleased to report that our first-quarter results demonstrate the continued success and disciplined execution of our strategy with growth in originations, market share gains, and the addition of more than 600 licensed loan originators,” said Terry Schmidt, Guild CEO.

“These results come against the backdrop of a persistent period of elevated rates and tight housing inventory, and they reflect our consistent ability to outperform the broader market by committing to our core mission to deliver the promise of home to homebuyers through our leading product set, proprietary end-to-end technology stack, and local, relationship-based approach,” she said.

The company approved a dividend of fifty cents per share despite a broadly challenging mortgage operating environment, and the company has fully implemented assets from its acquisition of Academy Mortgage. Schmidt said that the Academy assets are expected to begin contributing origination volume in the coming quarters.

Additionally, during an earnings call on Thursday, David Neylan — Guild’s president and COO — offered more details on the acquisition of Waterton Insurance after initially announcing a partnership in March.

“[Waterton is] an agency focused on nationwide home insurance solutions,” he said. “This enables a convenient insurance shopping experience for our mortgage customers, providing a more seamless and efficient home buying process.”

“Our balanced business model, with both our originations and servicing businesses, positions us for earnings stability in this uncertain rate environment and persistent period of limited home inventories,” Schmidt said. “With our strong balance sheet position, we are executing judiciously across all our capital priorities including investing in our organic growth, selectively pursuing accretive acquisitions, and enhancing technology and servicing capabilities, while also returning capital to stockholders.”

Among highlights in the report, the company pointed out that it originated 91% of its loan origination volume from purchase business, which beats a Mortgage Bankers Association (MBA) estimated industry average of 77%. Net revenue sharply increased to $231.8 million from only $57.2 million in Q4 2023, driven by improved origination volume, gain on sale margins and growth in the company’s servicing portfolio.

Net income in Q1 2024 also recovered substantially to $28.5 million, compared to a $93 million loss in Q4 2023. The company’s unpaid principal balance (UPB) in its servicing portfolio also grew by two percent to $86.3 billion, the company said.

The company is also extending a share repurchase program.

“During the three months ended March 31, 2024, the company repurchased and subsequently retired 17,747 shares of Guild’s Class A common stock at an average purchase price of $14.16 per share,” the report said. As of March 31, 2024, $10.9 million remains available for repurchase under the company’s share repurchase program.”

As of late day trading on Thursday, Guild’s stock price was up 2.34% for the day to $14.44.