Guild delivers $37M profit as origination volume jumps 69%


Guild Holdings Co., the parent company of Guild Mortgage, delivered a profit in the second quarter of 2024, mainly due to the performance of its growing servicing portfolio. Meanwhile, its origination volume increased by 69% from April to June compared to the previous quarter but at lower margins. 

Net income in Q2 2024 increased to $37.6 million, compared to $28.5 million in the previous quarter, according to filings with the Securities and Exchange Commission (SEC). The data shows that adjusted net income was $30.7 million and adjusted EBITDA was $41.6 million. 

Guild CEO Terry Schmidt said in a statement that the company’s performance reflects its strategy to increase market share “by investing in people and technology” and its ability to “executive effectively in a challenging market environment.” 

During an earnings call with analysts, Schmidt also highlighted the integration of Academy Mortgage, acquired in February, which has represented 18% to 20% of the company’s origination volume. She also mentioned the launch of GuildGPT, an in-house artificial intelligence (AI) system that allows “team members to easily access AI assistance for instant delivery of customer information on background.”

Schmidt said Guild will pursue ”selective acquisitions that align with our model and culture.” She told analysts that activity has slowed despite a still-active M&A pipeline and that growing organically by hiring LOs continues to be a strong option.  

Guild originated $6.5 billion in the second quarter, up 69% from the previous quarter, and 92% of the total involved purchase loans. Executives compared the volume increase with the industry average of 14%, indicating that Guild gained market share during the period.

Its gain-on-sale margin, however, declined to 326 basis points, down from 364 bps in the same period last year. Ultimately, the lender’s origination division delivered a $3.1 million net loss from April to June, compared to a $24.2 million loss in the previous quarter.

The bright spot was its servicing segment, which had a net income of $69.5 million in Q2 2024, lower than the $83.9 million in Q1 2024. This included a gain of $2.1 million related to the valuation adjustments of mortgage servicing rights (MSRs).

The company’s unpaid principal balance (UPB) in its servicing portfolio grew by 9% to $89 billion, with the company retaining servicing rights for 68% of total loans sold in the second quarter of 2024. Guild’s purchase recapture rate was 27% in the second quarter.

The company sees more opportunities to originate loans from its servicing portfolio as rates decline since approximately 20% of the UPB includes a rate above 6% and more than one-quarter of it is above 5%. Executives said the retail platform works as a natural hedge for the servicing side of the business.

The lender’s cash and cash equivalents position was $102.2 million as of June 30.

During after-hours trading on Thursday, Guild’s stock price was down 0.06% to $15.90 after rising 12.6% during the day. 



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