Guild Holdings Company

Good afternoon, ladies and gentlemen, and welcome to the Guild Holdings Company first quarter 2023 earnings conference call. At this time, all participants are in 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 would now like to turn the conference over to 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 GILD's 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 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 Mary Ann McGarry. Mary Ann?

Thank you, Nikki. 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 Nalen, will join us for Q&A after our prepared remarks. Our first quarter results were in line with our expectations. In the first quarter, we generated $2.7 billion of total in-house loan originations compared to $3 billion in the fourth quarter of 2022. While these results reflect a challenging backdrop of rising rates and limited inventories, we continue to gain market share as we execute on our growth plan. Our origination volume from purchased business was 92%, compared to the Mortgage Bankers Association estimate of 80%. Additionally, our model is built on long-term relationships in communities. By focusing on purchase business, we see more consistency across interest rate cycles and believe our earnings are more durable and sustainable in all market cycles. Our servicing platform, along with our focus on customer service, also supports strong recapture rates. For the first quarter of 2023, Our purchase recapture rate was 24%, and we retained servicing rights for 87% of total loans sold in the first quarter of 2023, with strong retention driving ongoing growth in unpaid balance levels and related fees. We are pleased to see an uptick in volume in April, and while we can't control the constraints on the housing supply, we have taken steps to position Guild to continue to grow market share. During the quarter and subsequently, we have been effectively executing on our growth strategy. With the recent acquisitions and organic expansion that Terry will discuss, we are further building our foundation to drive growth, and we anticipate gaining additional market share as the acquisitions are fully integrated and continue to ramp. We have a differentiated platform, and our acquisitions and product offerings further bolster our position. As we continue to integrate our recent acquisitions, we expect to realize enhanced productivity. In addition, our pipeline of attractive opportunities continues to grow, and while we will remain disciplined, we believe the current environment provides a compelling window for external growth. Before turning the call over to Terri, I want to take a moment to comment on our previously disclosed management succession, which will be effective on July 1st. It has been an incredible journey for GILD, and I could not be more proud of what we have accomplished and the foundation we have created to deliver ongoing growth and shareholder value. GILD is a company with a strong culture. technology platform, and talented people. Since our management buyout in 2007, we have delivered tremendous growth and consistent returns due to our balanced business model, our focus on customer relationships, and offering creative product solutions to our customers' financing needs. We believe our combination of strong performance, Culture and longevity is unique. I will remain on the board of directors and I'm very confident in the team that will be leading the company day to day with Terry Schmidt's promotion to CEO and David Nayland as president and COO. Terry and I have worked together for almost four decades and David has been with us since before the management buyout in 2007. As a result, I am certain the transition will be seamless. And I want to thank the entire Guild team for their hard work and commitment to executing on our mission of delivering the promise of home in neighborhoods and communities across the United States. Terri?