California-based mortgage lender loan library Financial losses were reduced in the second quarter of 2024, while the impact of the January cyber attack was still felt. During the three-month period, the company increased sales and profits while implementing efficiency programs and selling mortgage servicing rights (MSRs).
On Tuesday, loanDepot reported a non-GAAP adjusted net loss of $16 million from April to June, compared with a loss of $39.5 million in the previous quarter and a loss of $36 million in the same period in 2023.Commission filing, second quarter 2024 sales of $65.8 million Securities and Exchange Commission (U.S. Securities and Exchange Commission).
In the second quarter, the company delivered its “strongest operating results since the market downturn that began in the first quarter of 2022,” President and CEO Frank Martell said in a conference call with analysts. Martell was referring to pretax earnings of $34.5 million in the second quarter of 2024.
In the second quarter, loanDepot’s expenses were US$342.5 million, a quarterly increase of 11% and an annual increase of 3.75%. The company had $27 million in nonoperating expenses related to cyberattacks in the last quarter, including accruals related to class-action settlements.
“We are currently negotiating the terms of the settlement agreement, which the plaintiffs may submit to the court for approval later in the third quarter. We believe the settlement agreement will eliminate significant uncertainty for our stakeholders going forward,” Chief Financial Officer David David Hayes said in a statement.
In the second quarter, the company also extended approximately $500 million in debt maturing in 2025, reducing its outstanding corporate debt by $137 million. LoanDepot reported a loss of $6 million “due to debt extinguishments related to the successful tender exchange.”
LoanDepot delivered $120 million in benefits, a goal of its supplemental productivity program. Martell said the measures include revamping compensation plans and reducing layers of management in the organization.
At the same time, the company’s total revenue reached $265.4 million, an increase of 19% from the previous quarter, but a decrease of 2.3% from the second quarter of 2023. LoanDepot reported a cash balance of $533 million at the end of the quarter.
Business Highlights
LoanDepot issued $6 billion from April to June, up from $4.5 billion in the previous quarter and down from $6.3 billion in the second quarter of 2023. %, compared with 2.74% in the second quarter of 2024, % in the first quarter of 2024, and 2.85% in the second quarter of 2023.
“Higher sales margins benefited from a reversal in loss provisions, reflecting strong credit performance in our historical production years, as well as growing contributions from high-margin home equity products,” Hayes told analysts.
In the second quarter of 2024, purchase loans accounted for 72% of LoanDepot’s total volume.
Regarding loanDepot’s servicing portfolio, unpaid principal balance (UPB) decreased to $114 billion as of June 30 from $142 billion as of March 31, primarily due to MSR’s sales of low coupons in 2020 and 2021 product.
In the second quarter of 2024, service fee revenue increased to $125 million, compared with $124 million in the previous quarter. Hayes said the firm hedges its portfolio to protect against volatility.
“We opportunistically took advantage of strong market conditions to monetize approximately $29 billion of unpaid principal balances in mortgage servicing rights. We expect servicing revenue to be lower going forward due to the smaller product portfolio,” Hai said. Yes said.
Looking ahead, executives said loanDepot has gradually increased the number of loan officers and operating capacity to take advantage of the lower mortgage rate environment.
Company executives expect financing to reach $5 billion to $7 billion in the third quarter of 2024. The sales profit margin is expected to be between 2.8% and 3%. In the third quarter, the company will announce a new strategic plan to replace Vision 2025.
After the financial report was released, loanDepot stock traded at $2.15, rising 3.86% after the bell.
