Strong operational results highlighted by
expanded market share and gain on sale margins; continues to invest
in key growth initiatives and platforms.
Highlights:
- Revenue of $265 million as higher origination and servicing
revenues partially offset negative net change in fair value of
servicing rights.
- Adjusted revenue of $278 million, the highest level since the
beginning of the market downturn.
- Pull-through weighted gain on sale margin of 322 basis points,
the highest margin since the beginning of the market downturn.
- Completed $120 million Vision 2025 supplemental productivity
program.
- Net loss of $66 million, including non-operational charges of
$27 million related to the first quarter 2024 cybersecurity
incident and $6 million loss on the extinguishment of debt related
to the successful tender exchange.
- Adjusted net loss decreased 56% to $16 million compared to
second quarter of 2023.
- Adjusted EBITDA of $35 million, the highest level since the
beginning of market the downturn.
- Completed tender exchange of 2025 unsecured notes, extending
maturity and reducing outstanding corporate debt by $137
million.
- Reached tentative agreement to settle class action litigation
related to cybersecurity incident.
- Strong liquidity profile with cash balance of $533
million.
loanDepot, Inc. (NYSE: LDI), (together with its subsidiaries,
“loanDepot” or the “Company”), a leading provider of lending
solutions that make the American dream of homeownership more
accessible and achievable for all, today announced results for the
second quarter ended June 30, 2024.
“During the second quarter, by most measures, we delivered our
strongest operational results since the beginning of the market
downturn that began in the first quarter of 2022,” said President
and Chief Executive Officer Frank Martell. “As we near the
completion of our Vision 2025 strategic plan, which was launched in
July 2022, we have dramatically improved our operational results
while positioning the company for long-term success. Our positive
operational momentum was driven by profitable adjusted revenue
growth as well as our ongoing commitment to cost discipline.
“Importantly, we continue to make critical and strategic
investments in our people, products and technology platforms. We
believe these investments position the company to capture the
opportunities to expand market share and profitability presented by
higher forecasted market volumes in 2025. This quarter, the company
continued to build our in-market retail franchise, which
contributed to our expanded margins and market share growth.
“In addition, we believe the company is increasingly well
positioned to capitalize on the record levels of home equity
available to homeowners for debt consolidation and home
improvement, as well as the inevitable increase in rate and term
refinance volume as mortgage interest rates are expected to
decrease. At loanDepot, we believe home means everything and our
expanding team of professionals delivers a complete suite of
products and services that fuel the American dream.”
Added Chief Financial Officer David Hayes, “We are laser focused
on our commitment to profitability and continue to work with
discipline to grow revenue and manage costs. During the second
quarter we successfully delivered the $120 million benefit targeted
by our supplemental productivity program.
“As we approach a return to sustainable profitability, the
second quarter was marked by two very significant milestones. The
first is our successful tender and exchange of $500 million of
corporate notes coming due in the fourth quarter of 2025. The net
result of the exchange was to reduce the principal balance of our
debt by $137 million and extend the maturity to 2027. As part of
the debt exchange, we took advantage of strong market conditions
and monetized approximately $29 billion of unpaid principal balance
of our mortgage servicing rights to end the quarter with a strong
balance sheet, including $533 million in cash. Second, we also
reached a settlement in principle related to the class-action
litigation attributable to the January cyber incident. We are
presently negotiating the terms of a settlement agreement, and
plaintiffs will likely submit it for court approval later in the
third quarter. We believe the settlement will remove significant
uncertainty for our stakeholders going forward.”
Second Quarter Highlights:
Financial Summary
Three Months Ended
Six Months Ended
($ in thousands except per share data)
(Unaudited)
Jun 30, 2024
Mar 31, 2024
Jun 30, 2023
Jun 30, 2024
Jun 30, 2023
Rate lock volume
$
8,298,270
$
6,802,330
$
8,973,666
$
15,100,600
$
17,442,101
Pull-through weighted lock volume(1)
5,782,309
4,731,836
6,057,179
10,514,145
11,382,667
Loan origination volume
6,090,634
4,558,351
6,273,543
10,648,985
11,217,880
Gain on sale margin(2)
3.06
%
2.84
%
2.75
%
2.97
%
2.61
%
Pull-through weighted gain on sale
margin(3)
3.22
%
2.74
%
2.85
%
3.01
%
2.57
%
Financial Results
Total revenue
$
265,390
$
222,785
$
271,833
$
488,175
$
479,734
Total expense
342,547
307,950
330,148
650,496
644,632
Net loss
(65,853
)
(71,505
)
(49,759
)
(137,357
)
(141,480
)
Diluted loss per share
$
(0.18
)
$
(0.19
)
$
(0.13
)
$
(0.37
)
$
(0.38
)
Non-GAAP Financial Measures(4)
Adjusted total revenue
$
278,007
$
230,816
$
268,736
$
508,820
$
494,735
Adjusted net loss
(15,890
)
(39,499
)
(36,120
)
(55,384
)
(95,043
)
Adjusted EBITDA
34,575
503
4,070
35,078
(23,411
)
(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 increased $11.5 million from the
second quarter of 2023, primarily due to costs related to the
January 2024 cyber incident (“Cybersecurity Incident”) and debt
exchange, offset somewhat by lower headcount related salary
expenses and marketing costs.
- Incurred $26.9 million of expenses related to the first quarter
Cybersecurity Incident, including accrual to settle outstanding
legal claims against the company.
- Incurred restructuring and impairment charges totaling $4.3
million, a decrease of $1.7 million from the second quarter of
2023.
- Pull-through weighted lock volume of $5.8 billion for the
second quarter of 2024, a decrease of $0.3 billion or 5% from the
second quarter of 2023.
- Loan origination volume for the second quarter of 2024 was $6.1
billion, a decrease of $0.2 billion or 3% from the second quarter
of 2023.
- Purchase volume totaled 72% of total loans originated during
the second quarter, down slightly from 73% during the second
quarter of 2023.
- Our preliminary organic refinance consumer direct recapture
rate1 increased to 70% from the second quarter 2023’s refinance
rate of 68%.
- Net loss for the second quarter of 2024 of $65.9 million as
compared to net loss of $49.8 million in the second quarter of
2023. Net loss increased primarily due to higher expenses, which
included costs related to the first quarter 2024 cyber incident and
charges related to the debt exchange transaction.
- Adjusted net loss for the second quarter of 2024 was $15.9
million as compared to adjusted net loss of $36.1 million for the
second quarter of 2023.
Outlook for the third quarter of 2024
- Origination volume of between $5 billion and $7 billion.
- Pull-through weighted rate lock volume of between $5 billion
and $7 billion.
- Pull-through weighted gain on sale margin of between 280 basis
points and 300 basis points.
Servicing
Three Months Ended
Six Months Ended
Servicing Revenue Data:
($ in thousands)
(Unaudited)
Jun 30, 2024
Mar 31, 2024
Jun 30, 2023
Jun 30, 2024
Jun 30, 2023
Due to collection/realization of cash
flows
$
(42,285
)
$
(35,999
)
$
(41,619
)
$
(78,285
)
$
(76,276
)
Due to changes in valuation inputs or
assumptions
15,623
28,244
26,138
43,867
4,771
Realized (loss) gain on sale of servicing
rights
(3,057
)
44
6,973
(3,013
)
7,164
Net loss from derivatives hedging
servicing rights
(25,183
)
(36,319
)
(30,014
)
(61,499
)
(26,936
)
Change in fair value of servicing rights,
net of hedging gains and losses
(12,617
)
(8,031
)
3,097
(20,645
)
(15,001
)
Other realized (losses) gains on sales of
servicing rights (1)
(5,885
)
(1,240
)
48
(7,126
)
(3
)
Changes in fair value of servicing rights,
net
$
(60,787
)
$
(45,270
)
$
(38,474
)
$
(106,056
)
$
(91,280
)
Servicing fee income (2)
$
125,082
$
124,059
$
119,529
$
249,140
$
239,418
(1)
Includes the (provision) recovery for sold
MSRs and broker fees.
(2)
Servicing fee income for the three months
ended June 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
Six Months Ended
Servicing Rights, at Fair
Value:
($ in thousands)
(Unaudited)
Jun 30, 2024
Mar 31, 2024
Jun 30, 2023
Jun 30, 2024
Jun 30, 2023
Balance at beginning of period
$
1,970,164
$
1,985,718
$
2,016,568
$
1,985,718
$
2,025,136
Additions
66,115
48,375
75,866
114,491
135,161
Sales proceeds
(439,199
)
(56,113
)
(85,164
)
(495,312
)
(97,194
)
Changes in fair value:
Due to changes in valuation inputs or
assumptions
15,623
28,244
26,138
43,867
4,771
Due to collection/realization of cash
flows
(42,285
)
(35,999
)
(41,619
)
(78,285
)
(76,276
)
Realized (losses) gains on sales of
servicing rights
(3,955
)
(61
)
6,973
(4,016
)
7,164
Total changes in fair value
(30,617
)
(7,816
)
(8,508
)
(38,434
)
(64,341
)
Balance at end of period (1)
$
1,566,463
$
1,970,164
$
1,998,762
$
1,566,463
$
1,998,762
(1)
Balances are net of $16.7 million, $15.8
million, and $13.3 million of servicing rights liability as of June
30, 2024, March 31, 2024, and June 30, 2023, respectively.
% Change
Servicing Portfolio Data:
($ in thousands)
(Unaudited)
Jun 30, 2024
Mar 31, 2024
Jun 30, 2023
Jun-24
vs
Mar-24
Jun-24 vs
Jun-23
Servicing portfolio (unpaid principal
balance)
$
114,278,549
$
142,337,251
$
142,479,870
(19.7
)%
(19.8
)%
Total servicing portfolio (units)
403,302
491,871
482,266
(18.0
)
(16.4
)
60+ days delinquent ($)
$
1,457,098
$
1,445,489
$
1,192,377
0.8
22.2
60+ days delinquent (%)
1.3
%
1.0
%
0.8
%
Servicing rights, net to UPB
1.4
%
1.4
%
1.4
%
Balance Sheet Highlights
% Change
($ in thousands)
(Unaudited)
Jun 30, 2024
Mar 31, 2024
Jun 30, 2023
Jun-24 vs
Mar-24
Jun-24 vs
Jun-23
Cash and cash equivalents
$
533,153
$
603,663
$
719,073
(11.7
)%
(25.9
)%
Loans held for sale, at fair value
2,377,987
2,300,058
2,256,551
3.4
5.4
Loans held for investment, at fair
value
120,287
—
—
NM
NM
Servicing rights, at fair value
1,583,128
1,985,948
2,012,049
(20.3
)
(21.3
)
Total assets
5,942,777
6,193,270
6,203,504
(4.0
)
(4.2
)
Warehouse and other lines of credit
2,213,128
2,069,619
2,046,208
6.9
8.2
Total liabilities
5,363,839
5,555,928
5,406,160
(3.5
)
(0.8
)
Total equity
578,938
637,342
797,344
(9.2
)
(27.4
)
An increase in loans held for sale at June 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 June 30, 2024, and $3.9 billion at June 30, 2023.
Available borrowing capacity was $0.8 billion at June 30, 2024.
Consolidated Statements of
Operations
($ in thousands except per share data)
Three Months Ended
Six Months Ended
Jun 30, 2024
Mar 31, 2024
Jun 30, 2023
Jun 30, 2024
Jun 30, 2023
(Unaudited)
(Unaudited)
REVENUES:
Interest income
$
35,052
$
30,925
$
33,060
$
65,977
$
61,017
Interest expense
(35,683
)
(31,666
)
(32,001
)
(67,349
)
(59,689
)
Net interest (expense) income
(631
)
(741
)
1,059
(1,372
)
1,328
Gain on origination and sale of loans,
net
166,920
116,060
154,335
282,981
262,487
Origination income, net
19,494
13,606
18,332
33,099
30,349
Servicing fee income
125,082
124,059
119,529
249,140
239,418
Change in fair value of servicing rights,
net
(60,787
)
(45,270
)
(38,474
)
(106,056
)
(91,280
)
Other income
15,312
15,071
17,052
30,383
37,432
Total net revenues
265,390
222,785
271,833
488,175
479,734
EXPENSES:
Personnel expense
141,036
134,318
157,799
275,354
298,826
Marketing and advertising expense
31,175
28,354
34,712
59,529
70,626
Direct origination expense
21,550
18,171
17,224
39,721
34,603
General and administrative expense
73,160
57,746
54,817
130,905
110,951
Occupancy expense
5,204
5,110
6,099
10,314
12,180
Depreciation and amortization
8,955
9,443
10,721
18,398
20,747
Servicing expense
8,467
8,261
5,750
16,728
10,583
Other interest expense
53,000
46,547
43,026
99,547
86,116
Total expenses
342,547
307,950
330,148
650,496
644,632
Loss before income taxes
(77,157
)
(85,165
)
(58,315
)
(162,321
)
(164,898
)
Income tax benefit
(11,304
)
(13,660
)
(8,556
)
(24,964
)
(23,418
)
Net loss
(65,853
)
(71,505
)
(49,759
)
(137,357
)
(141,480
)
Net loss attributable to noncontrolling
interests
(33,642
)
(37,250
)
(26,316
)
(70,891
)
(75,130
)
Net loss attributable to loanDepot,
Inc.
$
(32,211
)
$
(34,255
)
$
(23,443
)
$
(66,466
)
$
(66,350
)
Basic loss per share
$
(0.18
)
$
(0.19
)
$
(0.13
)
$
(0.37
)
$
(0.38
)
Diluted loss per share
$
(0.18
)
$
(0.19
)
$
(0.13
)
$
(0.37
)
$
(0.38
)
Weighted average shares outstanding
Basic
182,324,046
181,407,353
173,908,030
181,863,195
172,358,924
Diluted
182,324,046
324,679,090
173,908,030
181,863,195
172,358,924
Consolidated Balance Sheets
($ in thousands)
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
(Unaudited)
ASSETS
Cash and cash equivalents
$
533,153
$
603,663
$
660,707
Restricted cash
98,057
74,346
85,149
Loans held for sale, at fair value
2,377,987
2,300,058
2,132,880
Loans held for investment, at fair
value
120,287
—
—
Derivative assets, at fair value
59,779
64,055
93,574
Servicing rights, at fair value
1,583,128
1,985,948
1,999,763
Trading securities, at fair value
89,477
91,545
92,901
Property and equipment, net
64,631
66,160
70,809
Operating lease right-of-use asset
24,549
27,409
29,433
Loans eligible for repurchase
740,238
748,476
711,371
Investments in joint ventures
17,905
17,849
20,363
Other assets
233,586
213,761
254,098
Total assets
$
5,942,777
$
6,193,270
$
6,151,048
LIABILITIES AND EQUITY
LIABILITIES:
Warehouse and other lines of credit
$
2,213,128
$
2,069,619
$
1,947,057
Accounts payable and accrued expenses
375,319
367,457
379,971
Derivative liabilities, at fair value
17,856
11,233
84,962
Liability for loans eligible for
repurchase
740,238
748,476
711,371
Operating lease liability
41,896
45,324
49,192
Debt obligations, net
1,975,402
2,313,819
2,274,011
Total liabilities
5,363,839
5,555,928
5,446,564
EQUITY:
Total equity
578,938
637,342
704,484
Total liabilities and equity
$
5,942,777
$
6,193,270
$
6,151,048
Loan Origination and Sales Data
($ in thousands)
(Unaudited)
Three Months Ended
Six Months Ended
Jun 30, 2024
Mar 31, 2024
Jun 30, 2023
Jun 30, 2024
Jun 30, 2023
Loan origination volume by
type:
Conventional conforming
$
3,311,617
$
2,545,203
$
3,323,678
$
5,856,820
$
6,217,499
FHA/VA/USDA
2,271,104
1,654,025
2,337,946
3,925,129
4,016,537
Jumbo
150,666
75,794
148,077
226,460
279,143
Other
357,247
283,329
463,842
640,576
704,701
Total
$
6,090,634
$
4,558,351
$
6,273,543
$
10,648,985
$
11,217,880
Loan origination volume by
purpose:
Purchase
$
4,383,145
$
3,296,273
$
4,552,919
$
7,679,418
$
8,065,690
Refinance - cash out
1,562,827
1,143,682
1,614,747
2,706,509
2,938,986
Refinance - rate/term
144,662
118,396
105,877
263,058
213,204
Total
$
6,090,634
$
4,558,351
$
6,273,543
$
10,648,985
$
11,217,880
Loans sold:
Servicing retained
$
4,011,399
$
2,986,541
$
3,943,845
$
6,997,940
$
7,221,552
Servicing released
1,893,515
1,452,812
2,134,024
3,346,327
4,252,898
Total
$
5,904,914
$
4,439,353
$
6,077,869
$
10,344,267
$
11,474,450
Second 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/410319294.
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
Six Months Ended
Jun 30, 2024
Mar 31, 2024
Jun 30, 2023
Jun 30, 2024
Jun 30, 2023
Total net revenue
$
265,390
$
222,785
$
271,833
$
488,175
$
479,734
Valuation changes in servicing rights, net
of hedging gains and losses(1)
12,617
8,031
(3,097
)
20,645
15,001
Adjusted total revenue
$
278,007
$
230,816
$
268,736
$
508,820
$
494,735
(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
Six Months Ended
Jun 30, 2024
Mar 31, 2024
Jun 30, 2023
Jun 30, 2024
Jun 30, 2023
Net loss attributable to loanDepot,
Inc.
$
(32,211
)
$
(34,255
)
$
(23,443
)
$
(66,466
)
$
(66,350
)
Net loss from the pro forma conversion of
Class C common shares to Class A common stock (1)
(33,642
)
(37,250
)
(26,316
)
(70,891
)
(75,130
)
Net loss
(65,853
)
(71,505
)
(49,759
)
(137,357
)
(141,480
)
Adjustments to the benefit for income
taxes(2)
8,838
9,774
6,916
18,616
20,120
Tax-effected net loss
(57,015
)
(61,731
)
(42,843
)
(118,741
)
(121,360
)
Valuation changes in servicing rights, net
of hedging gains and losses(3)
12,617
8,031
(3,097
)
20,645
15,001
Stock-based compensation expense
5,898
4,855
5,754
10,753
11,679
Restructuring charges(4)
3,127
2,124
4,544
5,252
6,591
Cybersecurity incident(5)
26,942
14,698
—
41,640
—
Loss (gain) on extinguishment of debt
5,680
—
(39
)
5,680
(39
)
Loss (gain) on disposal of fixed
assets
—
(29
)
751
(28
)
1,012
Other (recovery) impairment(6)
1,193
(1
)
686
1,192
341
Tax effect of adjustments(7)
(14,332
)
(7,446
)
(1,876
)
(21,777
)
(8,268
)
Adjusted net loss
$
(15,890
)
$
(39,499
)
$
(36,120
)
$
(55,384
)
$
(95,043
)
(1)
Reflects net 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 income tax benefit
reflect the income tax rates below, and the pro forma assumption
that loanDepot, Inc. owns 100% of LD Holdings.
Three Months Ended
Six Months Ended
Jun 30, 2024
Mar 31, 2024
Jun 30, 2023
Jun 30, 2024
Jun 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)
5.27
%
5.24
%
5.28
%
5.26
%
5.78
%
Effective income tax rate
26.27
%
26.24
%
26.28
%
26.26
%
26.78
%
(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 quarter
ended June 30, 2024, the Company recorded an accrual of $25 million
in connection with class action litigation related to the
Cybersecurity Incident.
(6)
Represents lease impairment on corporate
and retail locations.
(7)
Amounts represent the income tax effect
using the aforementioned effective income tax rates, excluding
certain discrete tax items.
Reconciliation of Adjusted Diluted
Weighted Average Shares Outstanding to Diluted Weighted Average
Shares Outstanding
($ in thousands except per share data)
(Unaudited)
Three Months Ended
Six Months Ended
Jun 30, 2024
Mar 31, 2024
Jun 30, 2023
Jun 30, 2024
Jun 30, 2023
Net loss attributable to loanDepot,
Inc.
$
(32,211
)
$
(34,255
)
$
(23,443
)
$
(66,466
)
$
(66,350
)
Adjusted net loss
(15,890
)
(39,499
)
(36,120
)
(55,384
)
(95,043
)
Share Data:
Diluted weighted average shares of Class A
and Class D common stock outstanding
182,324,046
324,679,090
173,908,030
181,863,195
172,358,924
Assumed pro forma conversion of weighted
average Class C shares to Class A common stock (1)
142,803,534
—
148,597,745
142,863,473
149,535,576
Adjusted diluted weighted average shares
outstanding
325,127,580
324,679,090
322,505,775
324,726,668
321,894,500
(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
Six Months Ended
Jun 30, 2024
Mar 31, 2024
Jun 30, 2023
Jun 30, 2024
Jun 30, 2023
Net loss
$
(65,853
)
$
(71,505
)
$
(49,759
)
$
(137,357
)
$
(141,480
)
Interest expense - non-funding debt
(1)
53,000
46,547
43,026
99,547
86,116
Income tax benefit
(11,304
)
(13,660
)
(8,556
)
(24,964
)
(23,418
)
Depreciation and amortization
8,955
9,443
10,721
18,398
20,747
Valuation changes in servicing rights, net
of hedging gains and losses(2)
12,617
8,031
(3,097
)
20,645
15,001
Stock-based compensation expense
5,898
4,855
5,754
10,753
11,679
Restructuring charges(3)
3,127
2,124
4,544
5,252
6,591
Cybersecurity incident(4)
26,942
14,698
—
41,640
—
Loss (gain) on disposal of fixed
assets
—
(29
)
751
(28
)
1,012
Other (recovery) impairment
1,193
(1
)
686
1,192
341
Adjusted EBITDA (LBITDA)
$
34,575
$
503
$
4,070
$
35,078
$
(23,411
)
(1)
Represents other interest expense, which
includes gain or loss on extinguishment of debt and amortization of
debt issuance costs, 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 quarter ended June 30, 2024, the
Company recorded an accrual of $25 million in connection with class
action litigation related to the Cybersecurity Incident.
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 the Vision 2025
plan, including our expanded productivity program, our progress
toward run-rate profitability, 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, including but not limited to, the
following: our ability to achieve the expected benefits of our
Vision 2025 plan and the success of our cost-reduction initiatives,
such as the expanded productivity program; 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 increases in interest rate levels; 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, which are difficult to predict.
Therefore, current plans, anticipated actions, 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/20240806117619/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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