Guild Holdings Company

And welcome to the Guild Holdings Company fourth quarter 2022 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Nikki Sachs, Investor Relations. Please go ahead.

Thank you, and good afternoon, 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 and industry trends. 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 GILDS 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 debt measures can be found in our earnings release furnished today with the SEC and are also available on GILD's Investor Relations website. Now, I'd like to turn the call over to Chief Executive Officer Marianne McGarry. Marianne?

Thank you. Good afternoon, everyone, and thank you for joining us. Today, I'm joined by our President, Terry Schmidt, and Chief Financial Officer, Amber Kramer. Our Chief Operating Officer, David Nayland, will join us for Q&A after our prepared remarks. The fourth quarter marked Guild's second year anniversary as a publicly listed company, and I am proud of what we've accomplished in that short time. Notably, for 2022, we produced another year of profitability as we leveraged our product mix, technology, servicing capabilities, and broad network of local loan officers across the country. We also continued to execute on our objective of strategically growing Guild's platform to capture more of the purchase mortgage market through both new product rollouts and compelling acquisitions. Supported by a strong balance sheet and liquidity, we have continued to invest in our business to enhance our leading position in the purchase mortgage business. Even as the industry faces headwinds amid rising rates and still limited inventories, we are demonstrating the benefits of our differentiated strategy, which focuses on the purchase mortgage market and is strengthened by targeted acquisitions. This approach has enabled us to grow the platform and to do so in a profitable manner, while positioning Gill to not only manage through this volatile market, but to accelerate our growth as the market normalizes. Where the year ended December 31, 2022, GAAP net income was $329 million, or $5.39 per share, a 15% increase from the prior year. Adjusted net income and adjusted earnings per share came in at $70 million and $1.15 per share, respectively. Our return on equity was over 30%. An adjusted return on equity was above 6% as we delivered positive returns for the year, outperforming lower industry-wide origination volumes and margins. Origination volume was 19 billion for the year, and while down from the prior year, we maintained a healthy gain-on-sale margin of 368 basis points. Part of our resilience is our concentration on purchase mortgages, including targeting the first-time buyer and diverse markets. For the year, we realized 81% of our closed loan origination volume from purchase business, compared to the Mortgage Bankers Association estimate of 70%. This favorable differential persisted as the year progressed and industry-wide refinancings declined dramatically. In the fourth quarter, 93% of our closed loan origination volume was derived from purchased business, compared to the Mortgage Bankers Association estimate of 83%. An additional key differentiator is our relationship-based strategy. This approach of creating clients for life has proven throughout our history to generate value by encouraging relationships our existing clients to return to us for later transactions. This approach has been effective by providing us additional opportunities to earn origination and servicing fee income. Even as originations have temporarily slowed industry-wide, we are continuing to be a meaningful presence in the markets we serve by conducting home ownership events, realtor events, and building trust through education with prospective first-time home buyers. Being able to offer customers an array of products which support individual needs is critical for us in our efforts to gain market share. By building close relationships with our customers, we better understand their needs and continue to expand our product offering to address those needs. As Terry will elaborate, We have introduced a number of new products which specifically support the first-time homebuyer and provide creative options for affordable lending. This approach is being recognized by industry publications where we have been awarded best of rankings, including Forbes and Money Magazine, where Guild was named as the top first-time homebuyer lender. We believe our industry is seeing a long-term trend toward consolidation around companies like Guild that can scale and that have regulatory and operational expertise. As part of our ongoing growth initiative, in the fourth quarter and subsequent to year end, we acquired two mortgage companies. With these additions, we have now completed three acquisitions since our public listing and numerous since 2008. We are very thoughtful and strategic in our approach to acquisitions, as we add companies with similar philosophies of being in the communities and neighborhoods we serve, while seeking to grow share in key markets. Importantly, I am proud of how efficiently we have onboarded these acquisitions. Our pipeline of attractive opportunities continues to grow, and while we remain disciplined, we believe the current environment provides a compelling window for external growth. As we have demonstrated, we are committed to delivering positive returns for our shareholders over the long term. And it is because of our differentiated model that we believe we can continue to do so. Our model is built around a retail strategy which focuses on servicing the loans that we originate. By focusing on the purchase business, we see more consistency across interest rate cycles. are more durable and sustainable in all market cycles. Additionally, we will continue to make prudent capital allocation decisions which position GILD to create shareholder value through investments in our business and new products, share repurchases, and external growth initiatives. While we are confident we are in a relatively favorable position as the industry looks for stabilization, there will continue to be some near-term pressure, particularly on gain-on-sale margins from rising interest rates and limited inventory. Given our profitability and cash generation, we are positioned to capitalize on the current environment to further scale our business so we can reaccelerate our growth as the market turns. Specifically, we believe our long and successful acquisition record is attractive to smaller firms trying to address ongoing revenue pressures, shifting competitive dynamics, and diminishing profitability. Broader market disruptions are driving a flight to quality, and Guild should be a net beneficiary given our long and successful history through market cycles. With that, I'd like to turn it over to our president, Terry Schmidt. Terry? Terry?