Company achieves profitability on higher
volumes, margin growth and productivity
Completes Vision 2025 and launches
new strategic plan - Project North Star
Highlights:
- Revenue of $315 million, up 18% compared to the prior year.
Adjusted revenue of $329 million, up 26% compared to the prior
year.
- Company announces Ridgeland Mortgage joint venture with Smith
Douglas Homes, expanding loanDepot’s network of partnerships with
top homebuilders.
- Pull-through weighted gain on sale margin of 329 basis points,
the highest margin since the beginning of the market downturn.
- Net income of $3 million and adjusted net income of $7 million,
compared with prior year net loss and adjusted net loss of $34
million and $29 million, respectively, reflect the positive impact
of higher revenue and cost productivity.
- Adjusted EBITDA of $64 million compared with $15 million in the
prior year.
- Strong liquidity profile with cash balance of $483
million.
loanDepot, Inc. (NYSE: LDI), (together with its subsidiaries,
“loanDepot” or the “Company”), a leading provider of products and
services that power the homeownership journey, today announced
results for the third quarter ended September 30, 2024.
“Through the successful implementation of our Vision 2025
strategic program, loanDepot returned to profitability in the third
quarter on modest improvements in market volumes, which resulted in
higher revenue,” said President and Chief Executive Officer Frank
Martell. “We are also realizing the benefits of our ongoing cost
management and productivity programs, which helped to fund
strategic investments in our platforms, solutions and people. These
investments should help position the company for success in 2025
and beyond.
“Vision 2025, launched in July of 2022, was a critical factor in
our successful navigation of unprecedented and challenging market
conditions over the past three years. The launch of Project North
Star builds on the strategic pillars of Vision 2025, including our
focus on durable revenue growth, positive operating leverage,
productivity and investments in platforms and solutions that
support our customer’s homeownership journey,” added Martell.
“We are pleased that the successful completion of the strategic
objectives of Vision 2025 has delivered the company’s first
profitable quarter since the beginning of the market downturn in
the first quarter of 2022,” said David Hayes, Chief Financial
Officer. “The third quarter served as validation of our strategy as
we saw a modest improvement in the mortgage market, coupled with
the company’s positive operating leverage fueled our return to
profitability. As we look toward 2025, we anticipate continued
market challenges, but we believe that the implementation of
Project North Star will allow us to capture the benefit of higher
market volumes while we continue to capitalize on our ongoing
investments in operational efficiency to achieve sustainable
profitability in a wide variety of operating environments.”
Third Quarter Highlights:
Financial Summary
Three Months Ended
Nine Months Ended
($ in thousands except per share data)
(Unaudited)
Sep 30, 2024
Jun 30, 2024
Sep 30, 2023
Sep 30, 2024
Sep 30, 2023
Rate lock volume
$
9,792,423
$
8,298,270
$
8,295,935
$
24,893,023
$
25,738,036
Pull-through weighted lock volume(1)
6,748,057
5,782,309
5,685,209
17,262,202
17,067,876
Loan origination volume
6,659,329
6,090,634
6,083,143
17,308,314
17,301,023
Gain on sale margin(2)
3.33
%
3.06
%
2.74
%
3.11
%
2.66
%
Pull-through weighted gain on sale
margin(3)
3.29
%
3.22
%
2.93
%
3.12
%
2.69
%
Financial Results
Total revenue
$
314,598
$
265,390
$
265,661
$
802,772
$
745,395
Total expense
311,003
342,547
305,128
961,497
949,760
Net income (loss)
2,672
(65,853
)
(34,262
)
(134,685
)
(175,743
)
Diluted earnings (loss) per share
$
0.01
$
(0.18
)
$
(0.09
)
$
(0.36
)
$
(0.48
)
Non-GAAP Financial Measures(4)
Adjusted total revenue
$
329,499
$
278,007
$
261,116
$
838,318
$
755,852
Adjusted net income (loss)
7,077
(15,890
)
(29,211
)
(48,309
)
(124,417
)
Adjusted EBITDA
63,742
34,575
15,253
98,820
(8,399
)
(1)
Pull-through weighted rate lock volume is
the 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.
Year-over-Year Operational Highlights
- Non-volume related expenses decreased $11.4 million from the
third quarter of 2023, primarily due to lower general and
administrative expenses, offset somewhat by higher headcount
related salary expenses and marketing costs.
- Accrued a net benefit of $18.9 million primarily associated
with expected insurance proceeds related to the settlement of
class-action litigation related to the first quarter Cybersecurity
Incident.
- Incurred restructuring and impairment charges totaling $1.9
million, a decrease of $0.4 million from the third quarter of
2023.
- Pull-through weighted lock volume of $6.7 billion for the third
quarter of 2024, an increase of $1.1 billion or 19% from the third
quarter of 2023.
- Loan origination volume for the third quarter of 2024 was $6.7
billion, an increase of $0.6 billion or 9% from the third quarter
of 2023.
- Purchase volume totaled 66% of total loans originated during
the third quarter, down slightly from 71% during the third quarter
of 2023.
- Our preliminary organic refinance consumer direct recapture
rate1 increased to 71% from the third quarter 2023’s recapture rate
of 69%.
- Net income for the third quarter of 2024 of $2.7 million as
compared to net loss of $34.3 million in the third quarter of 2023.
Net income increased primarily due to higher revenue from increased
volume and pull-through weighted gain on sale margin.
- Adjusted net income for the third quarter of 2024 was $7.1
million as compared to adjusted net loss of $29.2 million for the
third quarter of 2023.
Outlook for the fourth quarter of 2024
- Origination volume of between $6 billion and $8 billion.
- Pull-through weighted rate lock volume of between $5.5 billion
and $7.5 billion.
- Pull-through weighted gain on sale margin of between 285 basis
points and 305 basis points.
Servicing
Three Months Ended
Nine Months Ended
Servicing Revenue Data:
($ in thousands)
(Unaudited)
Sep 30, 2024
Jun 30, 2024
Sep 30, 2023
Sep 30, 2024
Sep 30, 2023
Due to collection/realization of cash
flows
$
(41,498
)
$
(42,285
)
$
(38,502
)
$
(119,783
)
$
(114,777
)
Due to changes in valuation inputs or
assumptions
(52,557
)
15,623
68,651
(8,690
)
73,422
Realized gain (loss) on sale of servicing
rights
32
(3,057
)
5,247
(2,980
)
12,411
Net gain (loss) from derivatives hedging
servicing rights
37,624
(25,183
)
(69,353
)
(23,876
)
(96,290
)
Change in fair value of servicing rights,
net of hedging gains and losses
(14,901
)
(12,617
)
4,545
(35,546
)
(10,457
)
Other realized losses on sales of
servicing rights (1)
(164
)
(5,885
)
(1,731
)
(7,290
)
(1,734
)
Changes in fair value of servicing rights,
net
$
(56,563
)
$
(60,787
)
$
(35,688
)
$
(162,619
)
$
(126,968
)
Servicing fee income (2)
$
124,133
$
125,082
$
120,911
$
373,273
$
360,329
(1)
Includes the (provision) recovery for sold
MSRs and broker fees.
(2)
Servicing fee income for the three and
nine months ended September 30, 2023, has been adjusted to
incorporate earnings credits, which were previously classified as
part of net interest income.
_________________________________
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.
Three Months Ended
Nine Months Ended
Servicing Rights, at Fair
Value:
($ in thousands)
(Unaudited)
Sep 30, 2024
Jun 30, 2024
Sep 30, 2023
Sep 30, 2024
Sep 30, 2023
Balance at beginning of period
$
1,566,463
$
1,970,164
$
1,998,762
$
1,985,718
$
2,025,136
Additions
62,039
66,115
80,068
176,529
215,229
Sales proceeds
(8,466
)
(439,199
)
(73,972
)
(503,777
)
(171,167
)
Changes in fair value:
Due to changes in valuation inputs or
assumptions
(52,557
)
15,623
68,651
(8,690
)
73,422
Due to collection/realization of cash
flows
(41,498
)
(42,285
)
(38,502
)
(119,783
)
(114,777
)
Realized gains (losses) on sales of
servicing rights
32
(3,955
)
3,647
(3,984
)
10,811
Total changes in fair value
(94,023
)
(30,617
)
33,796
(132,457
)
(30,544
)
Balance at end of period (1)
$
1,526,013
$
1,566,463
$
2,038,654
$
1,526,013
$
2,038,654
(1)
Balances are net of $16.7 million, $16.7
million, and $14.7 million of servicing rights liability as of
September 30, 2024, June 30, 2024, and September 30, 2023,
respectively.
% Change
Servicing Portfolio Data:
($ in thousands)
(Unaudited)
Sep 30, 2024
Jun 30, 2024
Sep 30, 2023
Sep-24
vs
Jun-24
Sep-24 vs
Sep-23
Servicing portfolio (unpaid principal
balance)
$
114,915,206
$
114,278,549
$
143,959,705
0.6
%
(20.2
)%
Total servicing portfolio (units)
409,344
403,302
490,191
1.5
(16.5
)
60+ days delinquent ($)
$
1,654,955
$
1,457,098
$
1,235,443
13.6
34.0
60+ days delinquent (%)
1.4
%
1.3
%
0.9
%
Servicing rights, net to UPB
1.3
%
1.4
%
1.4
%
Balance Sheet Highlights
% Change
($ in thousands)
(Unaudited)
Sep 30, 2024
Jun 30, 2024
Sep 30, 2023
Sep-24 vs
Jun-24
Sep-24 vs
Sep-23
Cash and cash equivalents
$
483,048
$
533,153
$
717,196
(9.4
)%
(32.6
)%
Loans held for sale, at fair value
2,790,284
2,377,987
2,070,748
17.3
34.7
Loans held for investment, at fair
value
122,066
120,287
—
1.5
NM
Servicing rights, at fair value
1,542,720
1,583,128
2,053,359
(2.6
)
(24.9
)
Total assets
6,417,627
5,942,777
6,078,529
8.0
5.6
Warehouse and other lines of credit
2,565,713
2,213,128
1,897,859
15.9
35.2
Total liabilities
5,825,578
5,363,839
5,309,594
8.6
9.7
Total equity
592,049
578,938
768,935
2.3
(23.0
)
An increase in loans held for sale at September 30, 2024,
resulted in a corresponding increase in the balance on our
warehouse lines of credit. Total funding capacity with our lending
partners was $3.1 billion at September 30, 2024, and $3.9 billion
at September 30, 2023. Available borrowing capacity was $0.5
billion at September 30, 2024.
Consolidated Statements of
Operations
($ in thousands except per share data)
Three Months Ended
Nine Months Ended
Sep 30, 2024
Jun 30, 2024
Sep 30, 2023
Sep 30, 2024
Sep 30, 2023
(Unaudited)
(Unaudited)
REVENUES:
Interest income
$
38,673
$
35,052
$
37,253
$
104,650
$
98,271
Interest expense
(39,488
)
(35,683
)
(36,770
)
(106,837
)
(96,459
)
Net interest (expense) income
(815
)
(631
)
483
(2,187
)
1,812
Gain on origination and sale of loans,
net
198,027
166,920
148,849
481,007
411,336
Origination income, net
23,675
19,494
17,740
56,775
48,088
Servicing fee income
124,133
125,082
120,911
373,273
360,329
Change in fair value of servicing rights,
net
(56,563
)
(60,787
)
(35,688
)
(162,619
)
(126,968
)
Other income
26,141
15,312
13,366
56,523
50,798
Total net revenues
314,598
265,390
265,661
802,772
745,395
EXPENSES:
Personnel expense
161,330
141,036
141,432
436,683
440,258
Marketing and advertising expense
36,282
31,175
33,894
95,811
104,520
Direct origination expense
23,120
21,550
15,749
62,841
50,352
General and administrative expense
22,984
73,160
46,522
153,889
157,473
Occupancy expense
4,800
5,204
5,903
15,113
18,083
Depreciation and amortization
8,931
8,955
10,592
27,329
31,339
Servicing expense
8,427
8,467
8,532
25,155
19,116
Other interest expense
45,129
53,000
42,504
144,676
128,619
Total expenses
311,003
342,547
305,128
961,497
949,760
Income (loss) before income taxes
3,595
(77,157
)
(39,467
)
(158,725
)
(204,365
)
Income tax expense (benefit)
923
(11,304
)
(5,205
)
(24,040
)
(28,622
)
Net income (loss)
2,672
(65,853
)
(34,262
)
(134,685
)
(175,743
)
Net income (loss) attributable to
noncontrolling interests
1,303
(33,642
)
(17,663
)
(69,588
)
(92,793
)
Net income (loss) attributable to
loanDepot, Inc.
$
1,369
$
(32,211
)
$
(16,599
)
$
(65,097
)
$
(82,950
)
Basic income (loss) per share
$
0.01
$
(0.18
)
$
(0.09
)
$
(0.36
)
$
(0.48
)
Diluted income (loss) per share
$
0.01
$
(0.18
)
$
(0.09
)
$
(0.36
)
$
(0.48
)
Weighted average shares outstanding
Basic
185,385,271
182,324,046
175,962,804
183,041,489.00
173,568,986.00
Diluted
332,532,984
182,324,046
175,962,804
183,041,489.00
173,568,986.00
Consolidated Balance Sheets
($ in thousands)
Sep 30, 2024
Jun 30, 2024
Dec 31, 2023
(Unaudited)
ASSETS
Cash and cash equivalents
$
483,048
$
533,153
$
660,707
Restricted cash
95,593
98,057
85,149
Loans held for sale, at fair value
2,790,284
2,377,987
2,132,880
Loans held for investment, at fair
value
122,066
120,287
—
Derivative assets, at fair value
68,647
59,779
93,574
Servicing rights, at fair value
1,542,720
1,583,128
1,999,763
Trading securities, at fair value
92,324
89,477
92,901
Property and equipment, net
62,974
64,631
70,809
Operating lease right-of-use asset
23,020
24,549
29,433
Loans eligible for repurchase
860,300
740,238
711,371
Investments in joint ventures
17,899
17,905
20,363
Other assets
258,752
233,586
254,098
Total assets
$
6,417,627
$
5,942,777
$
6,151,048
LIABILITIES AND EQUITY
LIABILITIES:
Warehouse and other lines of credit
$
2,565,713
$
2,213,128
$
1,947,057
Accounts payable and accrued expenses
381,543
375,319
379,971
Derivative liabilities, at fair value
22,143
17,856
84,962
Liability for loans eligible for
repurchase
860,300
740,238
711,371
Operating lease liability
38,538
41,896
49,192
Debt obligations, net
1,957,341
1,975,402
2,274,011
Total liabilities
5,825,578
5,363,839
5,446,564
EQUITY:
Total equity
592,049
578,938
704,484
Total liabilities and equity
$
6,417,627
$
5,942,777
$
6,151,048
Loan Origination and Sales Data
($ in thousands)
(Unaudited)
Three Months Ended
Nine Months Ended
Sep 30, 2024
Jun 30, 2024
Sep 30, 2023
Sep 30, 2024
Sep 30, 2023
Loan origination volume by
type:
Conventional conforming
$
3,254,702
$
3,232,905
$
3,158,107
$
8,991,282
$
9,375,605
FHA/VA/USDA
2,564,827
2,271,104
2,354,630
6,489,956
6,371,168
Jumbo
300,086
229,379
126,408
646,787
405,551
Other
539,714
357,246
443,998
1,180,289
1,148,699
Total
$
6,659,329
$
6,090,634
$
6,083,143
$
17,308,314
$
17,301,023
Loan origination volume by
purpose:
Purchase
$
4,378,575
$
4,383,145
$
4,337,476
$
12,057,993
$
12,403,166
Refinance - cash out
1,954,071
1,562,827
1,660,578
4,660,580
4,599,564
Refinance - rate/term
326,683
144,662
85,089
589,741
298,293
Total
$
6,659,329
$
6,090,634
$
6,083,143
$
17,308,314
$
17,301,023
Loans sold:
Servicing retained
$
3,818,375
$
4,011,399
$
4,175,126
$
10,816,315
$
11,396,678
Servicing released
2,487,589
1,893,515
2,092,762
5,833,916
6,345,660
Total
$
6,305,964
$
5,904,914
$
6,267,888
$
16,650,231
$
17,742,338
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 the Company’s earnings
results.
The conference call can also be accessed by dialing (800)
715-9871, Conference ID: 9881136. Please call five minutes in
advance to ensure that you are connected prior to the call. A
webcast can also be accessed at
https://events.q4inc.com/attendee/479196723.
A replay of the webcast will be made available on the Investor
Relations website following the conclusion of the event.
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), 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 (if dilutive), and Adjusted EBITDA (LBITDA). We exclude from
these non-GAAP financial measures the change in fair value of MSRs,
gains (losses) from the sale of MSRs and related hedging gains and
losses that represent realized and unrealized adjustments resulting
from changes in valuation, mostly due to changes in market interest
rates, and are not indicative of the Company’s operating
performance or results of operation. Beginning in the second
quarter of 2024, we began to include the gains (losses) from the
sale of MSRs in valuation changes in servicing rights, net of
hedging gains and losses to appropriately capture all valuation
changes in MSRs up to and including the sales date. Prior periods
have been revised to conform with this new presentation. We also
exclude stock-based compensation expense, which is a non-cash
expense, expenses directly related to the Cybersecurity Incident,
net of expected insurance recoveries, including costs to
investigate and remediate the Cybersecurity Incident, the costs of
customer notifications and identity protection, professional fees,
including legal expenses, litigation settlement costs, and
commission guarantees, 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 well as certain costs associated with our
restructuring efforts, 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. Adjustments to Diluted Weighted Average Shares
Outstanding assumes the pro forma conversion of weighted average
Class C shares to Class A common stock. 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, 2024
Jun 30, 2024
Sep 30, 2023
Sep 30, 2024
Sep 30, 2023
Total net revenue
$
314,598
$
265,390
$
265,661
$
802,772
$
745,395
Valuation changes in servicing rights, net
of hedging gains and losses(1)
14,901
12,617
(4,545
)
35,546
10,457
Adjusted total revenue
$
329,499
$
278,007
$
261,116
$
838,318
$
755,852
(1)
Represents the change in the fair value of
servicing rights due to changes in valuation inputs or assumptions,
net of gains or losses from derivatives hedging servicing rights.
Beginning in the second quarter of 2024, we began to include the
gains (losses) from the sale of MSRs in valuation changes in
servicing rights, net of hedging gains and losses to appropriately
capture all valuation changes in MSRs up to and including the sales
date. Prior periods have been revised to conform with this new
presentation.
Reconciliation of Net Income (Loss) to
Adjusted Net Income (Loss)
($ in thousands)
(Unaudited)
Three Months Ended
Nine Months Ended
Sep 30, 2024
Jun 30, 2024
Sep 30, 2023
Sep 30, 2024
Sep 30, 2023
Net income (loss) attributable to
loanDepot, Inc.
$
1,369
$
(32,211
)
$
(16,599
)
$
(65,097
)
$
(82,950
)
Net income (loss) from the pro forma
conversion of Class C common shares to Class A common stock (1)
1,303
(33,642
)
(17,663
)
(69,588
)
(92,793
)
Net income (loss)
2,672
(65,853
)
(34,262
)
(134,685
)
(175,743
)
Adjustments to the (provision) benefit for
income taxes(2)
(326
)
8,838
4,845
17,982
25,054
Tax-effected net income (loss)
2,346
(57,015
)
(29,417
)
(116,703
)
(150,689
)
Valuation changes in servicing rights, net
of hedging gains and losses(3)
14,901
12,617
(4,545
)
35,546
10,457
Stock-based compensation expense
8,200
5,898
3,940
18,952
15,619
Restructuring charges(4)
1,853
3,127
2,007
7,105
8,357
Cybersecurity incident(5)
(18,880
)
26,942
—
22,760
—
Loss (gain) on extinguishment of debt
—
5,680
(1,651
)
5,680
(1,690
)
Loss (gain) on disposal of fixed
assets
3
—
93
(25
)
1,105
Other impairment(6)
10
1,193
129
1,202
470
Tax effect of adjustments(7)
(1,356
)
(14,332
)
233
(22,826
)
(8,046
)
Adjusted net income (loss)
$
7,077
$
(15,890
)
$
(29,211
)
$
(48,309
)
$
(124,417
)
(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 the (provision)
benefit for income taxes reflect the 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, 2024
Jun 30, 2024
Sep 30, 2023
Sep 30, 2024
Sep 30, 2023
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)
4.01 %
5.27 %
6.43 %
4.84 %
6.00 %
Effective income tax rate
25.01 %
26.27 %
27.43 %
25.84 %
27.00 %
(3)
Represents the change in the fair value of
servicing rights due to changes in valuation inputs or assumptions,
net of gains or losses from derivatives hedging servicing rights,
and gains (losses) from the sale of MSRs. Beginning in the second
quarter of 2024, we began to include the gains (losses) from the
sale of MSRs in valuation changes in servicing rights, net of
hedging gains and losses to appropriately capture all valuation
changes in MSRs up to and including the sales date. Prior periods
have been revised to conform with this new presentation.
(4)
Reflects employee severance expense and
professional services associated with restructuring efforts
subsequent to the announcement of Vision 2025 in July 2022.
(5)
Represents expenses directly related to
the Cybersecurity Incident, net of expected insurance recoveries,
including costs to investigate and remediate the Cybersecurity
Incident, the costs of customer notifications and identity
protection, professional fees including legal expenses, litigation
settlement costs, and commission guarantees. During the three
months ended September 30, 2024, the Company recorded a $20.0
million receivable for reimbursement from its insurers. During the
nine months ended September 30, 2024, the Company recorded $35.0
million for an insurance reimbursement and receivable, and an
accrual of $25.0 million in connection with class action litigation
related to the Cybersecurity Incident.
(6)
Represents lease impairment on corporate
and retail locations.
(7)
Amounts represent the income tax effect
using the aforementioned effective income tax rates, excluding
certain discrete tax items.
Reconciliation of Adjusted Diluted Weighted Average Shares
Outstanding to Diluted Weighted Average Shares Outstanding
($ in thousands except per share data)
(Unaudited)
Three Months Ended
Nine Months Ended
Sep 30, 2024
Jun 30, 2024
Sep 30, 2023
Sep 30, 2024
Sep 30, 2023
Net income (loss) attributable to
loanDepot, Inc.
$
1,369
$
(32,211
)
$
(16,599
)
$
(65,097
)
$
(82,950
)
Adjusted net income (loss)
7,077
(15,890
)
(29,211
)
(48,309
)
(124,417
)
Share Data:
Diluted weighted average shares of Class A
and Class D common stock outstanding
332,532,984
182,324,046
175,962,804
183,041,489
173,568,986
Assumed pro forma conversion of weighted
average Class C shares to Class A common stock (1)
—
142,907,533
147,171,089
142,333,213
148,741,661
Adjusted diluted weighted average shares
outstanding
332,532,984
325,231,579
323,133,893
325,374,702
322,310,647
(1)
Reflects the assumed pro forma exchange
and conversion of anti-dilutive Class C common shares.
Reconciliation of Net Income (Loss) to
Adjusted EBITDA (LBITDA)
($ in thousands)
(Unaudited)
Three Months Ended
Nine Months Ended
Sep 30, 2024
Jun 30, 2024
Sep 30, 2023
Sep 30, 2024
Sep 30, 2023
Net income (loss)
$
2,672
$
(65,853
)
$
(34,262
)
$
(134,685
)
$
(175,743
)
Interest expense - non-funding debt
(1)
45,129
53,000
42,504
144,676
128,619
Income tax expense (benefit)
923
(11,304
)
(5,205
)
(24,040
)
(28,622
)
Depreciation and amortization
8,931
8,955
10,592
27,329
31,339
Valuation changes in servicing rights, net
of
hedging gains and losses(2)
14,901
12,617
(4,545
)
35,546
10,457
Stock-based compensation expense
8,200
5,898
3,940
18,952
15,619
Restructuring charges(3)
1,853
3,127
2,007
7,105
8,357
Cybersecurity incident(4)
(18,880
)
26,942
—
22,760
—
Loss (gain) on disposal of fixed
assets
3
—
93
(25
)
1,105
Other impairment(5)
10
1,193
129
1,202
470
Adjusted EBITDA (LBITDA)
$
63,742
$
34,575
$
15,253
$
98,820
$
(8,399
)
(1)
Represents other interest expense, which
includes gain or loss on extinguishment of debt and amortization of
debt issuance costs and debt discount, in the Company’s
consolidated statements of operations.
(2)
Represents the change in the fair value of
servicing rights due to changes in valuation inputs or assumptions,
net of gains or losses from derivatives hedging servicing rights,
and gains (losses) from the sale of MSRs. Beginning in the second
quarter of 2024, we began to include the gains (losses) from the
sale of MSRs in valuation changes in servicing rights, net of
hedging gains and losses to appropriately capture all valuation
changes in MSRs up to and including the sales date. Prior periods
have been revised to conform with this new presentation.
(3)
Reflects employee severance expense and
professional services associated with restructuring efforts
subsequent to the announcement of Vision 2025 in July 2022.
(4)
Represents expenses, directly related to
the Cybersecurity Incident, net of expected insurance recoveries,
that occurred in the first quarter of 2024, including costs to
investigate and remediate the Cybersecurity Incident, the costs of
customer notifications and identity protection, professional fees
including legal expenses, litigation settlement costs, and
commission guarantees. During the three months ended September 30,
2024, the Company recorded a $20.0 million receivable for
reimbursement from its insurers. During the nine months ended
September 30, 2024, the Company recorded $35.0 million for an
insurance reimbursement and receivable, and an accrual of $25.0
million in connection with class action litigation related to the
Cybersecurity Incident.
(5)
Represents lease impairment on corporate
and retail locations.
Forward-Looking Statements
This press release may contain "forward-looking statements,"
which reflect loanDepot's current views with respect to, among
other things, our business strategies, including Project North
Star, our progress toward run-rate profitability, ongoing cost
management and productivity programs, our HELOC product, financial
condition and liquidity, competitive position, industry and
regulatory environment, potential growth opportunities, the effects
of competition, the impact of the Cybersecurity Incident,
operations and financial performance. These forward-looking
statements can be identified by the fact that they do not relate
strictly to historical or current facts and may contain the words
“outlook,” “potential,” “believe,” “anticipate,” “expect,”
“intend,” “plan,” “predict,” “estimate,” “project,” “will be,”
“will continue,” “will likely result,” or other similar words and
phrases or future or conditional verbs such as “will,” “may,”
“might,” “should,” “would,” or “could” and the negatives of those
terms. 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 that are difficult to predict,
including but not limited to, the following: our ability to achieve
the expected benefits of Project North Star and the success of
other business initiatives; our ability to achieve run-rate
profitability; our loan production volume; our ability to maintain
an operating platform and management system sufficient to conduct
our business; our ability to maintain warehouse lines of credit and
other sources of capital and liquidity; impacts of cybersecurity
incidents, cyberattacks, information or security breaches and
technology disruptions or failures, of ours or of our third party
vendors; the outcome of legal proceedings to which we are a party;
our ability to reach a definitive settlement agreement related to
the Cybersecurity Incident; adverse changes in macroeconomic and
U.S residential real estate and mortgage market conditions,
including changes in interest rates; changing federal, state and
local laws, as well as changing regulatory enforcement policies and
priorities; and other risks detailed in the "Risk Factors" section
of loanDepot, Inc.'s Annual Report on Form 10-K for the year ended
December 31, 2023, and Quarterly Reports on Form 10-Q as well as
any subsequent filings with the Securities and Exchange Commission.
Therefore, current plans, anticipated actions, and 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 leading provider of lending solutions
that make the American dream of homeownership more accessible and
achievable for all, especially the increasingly diverse communities
of first-time homebuyers, through a broad suite of lending and real
estate services that simplify one of life's most complex
transactions. Since its launch in 2010, the company has been
recognized as an innovator, using its industry-leading technology
to deliver a superior customer experience. Our digital-first
approach makes it easier, faster and less stressful to purchase or
refinance a home. Today, as one of the largest non-bank lenders in
the country, loanDepot and its mellohome operating unit offer an
integrated platform of lending, loan servicing, real estate and
home services that support customers along their entire
homeownership journey. Headquartered in Southern California and
with hundreds of local market offices nationwide, loanDepot’s
passionate team is dedicated to making a positive difference in the
lives of their customers every day.
LDI-IR
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241105434727/en/
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
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