Guild Holdings Company

Good morning, ladies and gentlemen, and welcome to the Guild Holdings Company first quarter 2022 earnings conference call. At this time, all participants are on a listen-only mode. Later, we will conduct a question and answer session with instructions to follow at that time. As a reminder, this call will be recorded. I will now like to turn the conference over to Michael Kemp, Investor Relations. Please go ahead, sir.

Thank you, and good morning, everyone. Before we begin, I'd like to remind everyone that comments on this conference call may contain certain forward-looking statements regarding the company's expected operating and financial performance for future periods. These statements are based on the company's current expectations. Actual results for future periods may differ materially from those expressed or implied by these forward-looking statements due to a number of risks or other factors that are described in greater detail under the section titled Risk Factors in Guilds Form 10-K and 10-Q and in other reports filed with the U.S. Securities and Exchange Commission. Additionally, today's remarks will refer to certain non-GAAP financial measures. Reconciliations of non-GAAP financial measures to the corresponding GAAP measures can be found in our earnings release filed today with the SEC and are also available on Guild's Investor Relations website. Participating in the call today are Chief Executive Officer Mary Ann McGarry, President Terry Schmidt, and Chief Financial Officer Amber Kramer. Now, I'd like to turn the call over to Mary Ann McGarry. Mary Ann?

Thank you, Michael. Good morning, everyone, and thank you for joining us. As always, I'm joined by our president, Terry Schmidt, and our chief financial officer, Amber Kramer. Our chief operating officer, David Nalen, will join us for Q&A after our prepared remarks. For the first quarter of 2022, our financial results reinforced the benefits of our differentiated and balanced business model. Origination volumes and gain-on-sale margins compressed compared to prior quarters, consistent with broader industry trends. Adjusted net income and earnings per share came in at 32 million and 53 cents, respectively, for the first quarter of this year. Our servicing platform, which Terry will discuss in further detail, acted as a hedge with strong growth in servicing fees as well as sizable gains in the underlying value of the MSR asset on the balance sheet. Focusing on our originations business, we believe that we remain well positioned to gain market share over time given our unique purchase-focused model and retail infrastructure with loan officers in communities throughout the United States. However, Near-term purchase market share trends have been impacted by limited inventories, rising interest rates, and increased competition. We have been through many economic cycles over decades and believe we have demonstrated our ability to sustain profitability during challenging market conditions. Despite near-term pressures, we are confident that our purchase model will enable us to effectively navigate the current cycle. We have remained fiscally responsible and believe our platform, infrastructure, product breadth, and compensation structures will drive sustainable purchase market share gains over time, particularly as industry volumes continue to shift in favor of purchase activity. Purchase loans accounted for 66% of our mortgage volumes in the first quarter of 2022, up from 62% for the fourth quarter of 2021. Industry-wide, purchase loans accounted for an estimated 55% of overall mortgage volumes in the first quarter of 2022, according to the Mortgage Bankers Association. Beyond our attractive value proposition with loan officers, we are focused on continuing to leverage Guild's scale, brand, team, and platform to proactively capitalize on opportunities to gain share during the current cycle. The mortgage industry remains highly fragmented, with some smaller players lacking the scale and resources to adapt to shifting competitive dynamics. In contrast, we have built a leading retail distribution platform with a strong management team that has a proven track record of successfully navigating through changing mortgage cycles. Innovation is part of our identity, with continued product development a key differentiating factor during mortgage market downturns. As an example, we worked with investors and the Home Depot to introduce Green Smart Advantage, a new program designed to help homebuyers save on utility costs and manage multiple payments by bundling the cost new energy efficient appliances into mortgage loans. Green Smart Advantage reduces upfront costs and ongoing utility expenses for homebuyers and consolidates related payments. while promoting the purchase of more sustainable appliances. As mentioned, we believe our value proposition shines through particularly during down cycles, with our focus on customer service, relationship building, and product development increasingly resonating with prospective loan officers. As a result, we have shown that we are adept to adding to our team in an accretive way during market dislocations, and our ongoing recruiting efforts are off to a strong start this year. While it takes time for incoming loan officers to build volume, we expect that our expanding retail footprint will drive incremental growth over time. Additionally, our longer-term retention rates remain strong. As of the end of 2021, 79% of origination volume over the trailing five-year period was sourced from loan officers that are still with Guild today. Finally, we maintain ample capacity to fund strategic acquisitions should they arise. We have a strong track record of successfully sourcing, acquiring, and integrating complementary businesses. with persistent macro headwinds likely resulting in increased opportunities as seller expectations normalize. In summary, we remain focused on delivering consistent and profitable growth across interest rate cycles. We have generated a 40.4% adjusted return on equity over the last five years, including a 12.5% adjusted return on equity, and a 81.2% return on equity for the first quarter of 2022, even as origination volumes and gain-on-sale margins softened. All of our accomplishments can be directly tied to the hard work and dedication of our more than 5,000 employees, so I want to thank each of them for their continued service every day. So with that, I'd like to turn it over to our president, Terri Schmidt. Terri?