Q1 2025 Guild Holdings Co Earnings Call

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Speaker Change: 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.

Speaker Change: Rice Earnings Conference Fall. At this time, all participants already listen only mode.

Speaker Change: 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 would like to remind everyone that comments on the conference call may contain certain forward-looking statements regarding the company's expected operating and financial performance for the future period and industry trends.

Speaker Change: These statements are based on the company's current expectations preliminary results for any portion of a quarter may not be indicative of a full quarter results and are subject to management and auditor customary review procedures actual results for future periods may differ materially from those expressed or implied by these forward looking statements due.

A number of risks or other factors that are described in greater detail under the section titled risk factors and guilds. Most recently filed annual report on Form 10-K and in other reports subsequently filed with the U S Securities and Exchange Commission.

Speaker Change: 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 <unk> Investor Relations website, I'd now like to turn the call over to our Chief Executive Officer.

Speaker Change: and other reports subsequently filed with the U.S. Secretary of the United States Secretary of the United States Secretary of State. Additionally, today's remarks will refer to the non-GAAP financial aid annual report on the implementation of non-GAAP financial aid reports. The court finally got measures that can be found in our earnings release.

Terry Schmid: Terry Schmid Terry.

Speaker Change: Good afternoon, everyone and thank you for joining us today for our first quarter 2025 earnings call with me today is David Nailing, our president and Chief operating officer, and Amber Kramer our CFO.

Speaker Change: I'd now like to turn the call over to our Chief Executive Officer, Terry Schmidt. Terry? Good afternoon, everyone, and thank you for joining us today for our first

Speaker Change: Our results once again demonstrate the success of our growth strategy.

Speaker Change: Our positive momentum and market share gains and our ability to execute in every market cycle.

Carter, 2025 Furners, Carl. We've meet today in David Neylan, our president and chief operating officer. Good afternoon, everyone. Our

Speaker Change: I am pleased to report in the first quarter, we achieved 35% growth in originations year over year to $5 2 billion, while delivering positive adjusted EBITDA of $36 4 million and adjusted net income of $21 6 million.

Speaker Change: Our results, once again, demonstrate the success of our growth media is David Neylan, our positive momentum in market share gains and our ability to execute in every market cycle.

Speaker Change: These results showcase the benefits of our strategy to invest through market downturn, and we continue to grow at a faster rate than the broader industry.

Speaker Change: I'm pleased to report in the first quarter we achieved 35% growth in origination, year-over-year through 5.2 billion, while delivering positive adjust to EBITDA of $36.4 million in the first quarter of 2021 growth in origination.

Speaker Change: Our year over year growth in originations reflects not only the academy acquisition, we made in the first quarter of last year, but also the organic recruiting efforts we've completed throughout the past year.

Speaker Change: and David Neylan. And we continue to grow at a faster rate than in the broader end of 21.

Speaker Change: Since the end of 2020, we have more than doubled our loan officer head count.

Speaker Change: Our servicing business also continues to expand now with more than 94 billion in our portfolio. Despite market volatility. This homegrown portfolio provides financial stability fuels, our customers for life strategy and gives our loan officers more at bats with their past clients.

Speaker Change: Hagen, our year-over-year growth in origination, we select not only the Academy Ag with issues we made in the first quarter of last year, but also the organic recruiting efforts for the broader throughout the past year.

Speaker Change: Since the end of 2020, we have more than doubled our Loan Officer Headcount. Our servicing business also continues to expand, now with more than $94 billion in our portfolio despite market volatility. This homegrown portfolio provides financial stability, fuels our customers for life strategy, and gives our loan officers more at-bats with their past clients.

Speaker Change: We have built a model designed to perform in every market cycle.

Speaker Change: And we have successfully navigated multiple cycles throughout our history, our consistent productivity improvement showcase the strength and deep experience as we continue to thrive.

Speaker Change: Even as the broader market is experiencing prolonged volatility we.

Speaker Change: We have built a model designed to perform at every market cycle. And we have successfully navigated our lone cyclers throughout our paths with their path. Our consistent productivity improvements show we have built a ranked design experience at the market cycle. And we even as a broader market is experiencing quite a long draw at our hill of e-read.

Speaker Change: We do not expect the current conditions to change in the short term, but we're all well positioned for success, even in todays uncertain landscape.

Speaker Change: As we look ahead, we are particularly pleased with our ability to leverage our balanced business model.

Speaker Change: Core platform advantages and the strength of our brands continued to drive our growth.

Speaker Change: We've united to step code of current conditions change in the short term. But we're all well-prepared as we can set to thrive, even in today's even as a drier market as experiencing prolonged volatility. As we look ahead, we are not to completely freeze with our ability to leverage our balanced business. But we're all well-prepared. Our platform advantages and the strength of our brands continue to drive our growth.

Speaker Change: While we do not control the market environment, we built a durable balanced business model that should perform in all cycles.

Speaker Change: This includes <unk>.

Speaker Change: Our continued focus on purchasing distributed retail which has proven to be a significant advantage in this rate environment.

Speaker Change: Our servicing book that provides stability with consistent cash flows.

Speaker Change: Integrated servicing recapture platform to create customers for life and deliver additional origination volume when refi and life events occur.

Speaker Change: Robust product offering to deliver specialty programs for unique situations.

Speaker Change: Continued organic growth as we benefit from industry consolidation and the strength of our brand in times of uncertainty.

Speaker Change: And prudent financial management and flexibility that position us to selectively pursue opportunistic acquisitions and further invest in our platform.

and Glinda Hirst.

Glinda Hirst: Robust, Product Operator, Deliver Special Caps Program for Unique Creatuation, Research for Life, and Deliver a Denton Youth Organic Growth, and we benefit from industry consolidation and the strength of our brand, and Robust, Product Operator, Deliver Special Caps Program for youth, financial management, and flexibility that position us, and collectively pursue opportunistic acquisition, and further invest in our platform. [inaudible]

Speaker Change: Looking ahead, we believe we are positioned guild for outperformance relative to the industry, regardless of the current market.

Speaker Change: We anticipate continued volatility, but we remain confident that we already have the balanced model needed for this environment.

Speaker Change: We have spent decades building this business model to adapt to a variety of markets.

Glinda Hirst: Looking ahead, we believe we have positioned Guild for our performance relatively to the end of the regardless of the current market. And further, we anticipate continued volatility. But we remain confident that we already have the fastest model needed for this form of a relative to the industry as we have spent decades building this business model to adapt to a variety of

Speaker Change: We believe those who can be flexible and adjust in these conditions will be the winners which is exactly how we have built our platform.

Speaker Change: We continue to capitalize on opportunities while remaining disciplined in our approach our focus remains consistent.

Speaker Change: Market share gains operational efficiencies, new product development organic recruiting and opportunistic M&A.

Glinda Hirst: But we believe those who can be flammable and adjust in these conditions will be the winner of it.

Glinda Hirst: which is exactly how we have built our class model to adapt to a variety of things. We continue to capitalize on opportunities while remaining left and right in our approach. Our focus remains consistent exactly how we have built our platform. Operational efficiencies, we continue to product development, organic recruiting, and operating as per the M&A. With that, I'd like to turn it over to David to provide more details on our operational achievements and now a new private building.

Speaker Change: With that I'd like to turn it over to David to provide more details on our operational achievements and outlook David.

David Nailing: Thank you Terry highlighted Guild has delivered another strong quarter, driven by our growth and operational improvements across the company, particularly in the origination segment I'd like to spend just a few moments discussing how our execution of acquisitions and organic growth has resulted in tremendous progress.

David: Thank you. Now, Terry Highlighted, Guild has delivered another strong quarter driven by our growth and operational improvement across the company, particularly in the origination segment.

David Nailing: In our origination performance positioning us for continued success in the current market environment.

David Nailing: As a result of our growth efforts, we have delivered consistent improvement in our originations segment, improving quarterly profitability by $21 million compared to the first quarter a year ago.

David: I'd like to spend a few moments discussing how our execution of the acquisition of an organic growth has resulted in tremendous progress in our origination performance, positioning us for continued success in the current market environment. As a result of our growth effort, organic growth has resulted in improvement in our origination. As an origination improving quarterly profitability by 21 million compared to the first quarter a year ago, as a result of our growth, this has been accomplished.

David Nailing: This has been accomplished in three ways.

David Nailing: First we have added scale as Terry mentioned by successfully retaining loan officers, who joined via acquisitions. While also welcoming additional new loan officers through organic recruiting at a time when top producers are making a flight to quality.

David Nailing: Second our experience playbook and expertise with Onboarding resulted in quickly achieving operational leverage as we grew this can be attributed to disciplined integration efforts from our seasoned teams across the country.

David: and I'm here to talk to you about how we can deliver a consistent improvement in our original segment, improving quarterly profitability by $21 million compared to the first quarter a year ago. This has been accomplished in three ways. First, we have added scale, as Terry mentioned, by successfully retaining loan officers who joined via acquisitions while also welcoming additional new loan officers through organic recruiting at a time when this can be attributed to disciplined integration efforts from our seasoned teams.

David Nailing: Finally, guilds investments and superior technology products and sales coaching have delivered enhanced productivity for our loan officers. We have been seeing this positive impact over the past several quarters and according to my records loan officers at killed on average experienced 30% more productivity.

David Nailing: Than the industry average.

David Nailing: We believe this strategy and durable balanced business model has created a foundation from which we will continue to benefit even in a challenging and volatile market.

David Nailing: Our outlook for the peak spring and summer home purchase market is cautiously optimistic we believe our national footprint community, driven or origination teams and customer for life servicing strategy are well suited for serving the needs of our customers in every market cycle.

David: Foundation from which we will continue to benefit, even in a challenging and volatile market average.

David Nailing: We are seeing strong early results and growing momentum to serve more first time home buyers through our promise of home educational events in major markets across the U S. We also continue to invest in product and technology innovation that will position Gil to serve a home buyer of the future.

David: Our outlook for the peak spring and summer home purchase market is cautiously optimistic. We believe our national footprint, community-driven work, origination teams, and customer for life servicing strategy are well-suited for serving the needs of our customers in every market cycle. We are seeing strong early results and growing momentum to serve more first-time homebuyers through our Promise of Home educational events in major markets across the U.S.

David Nailing: To summarize we're pleased with our first quarter performance and remain confident in our strategic direction. Despite market volatility, we intend to continue to grow through organic recruiting and strategic acquisitions with a disciplined focus on increased productivity for our loan officers and economies of scale in our.

David: We also continue to invest in product and technology innovation that will position GILD to serve the home buyer of the future. To summarize, we're pleased with our first quarter performance and remain confident in our strategic direction despite market volatility. We intend to continue to grow through organic recruiting and strategic acquisition with a disciplined focus on increased productivity for our loan officers and economies of scale in our business.

David Nailing: Business. We appreciate your continued interest and support of Guild, and we look forward to updating you on our progress in the coming quarters.

Amber Kramer: I'll now hand over to Amber, who will provide a more detailed financial overview amber.

Amber Kramer: Thank you David given a return to more traditional seasonal patterns in the mortgage industry I will provide commentary on both sequential quarter and year over year comparisons.

David: We appreciate your continued interest in the Port of Guilds and we look forward to updating you on our progress in the quarter. All now hand over to Amber, who will provide a more detailed financial overview. We appreciate your continued interest and supportive guild. Thank you, David.

Amber Kramer: For the first quarter of 2025, we generated $5 2 billion of total loan originations compared to $3 9 billion in the prior year first quarter and $6 7 billion in the fourth quarter.

Amber Kramer: Net revenue totaled $198 million compared to $232 million in the prior year and $373 million in the fourth quarter, which generated a net loss attributable to guild of $24 million compared to a net income of $28 million in the prior year and $98 million in the fourth quarter.

Amber: For the first quarter of 2035, we generated a 5.1 billion as a total one regionation in the mortgage industry. Compared to 3.9 billion in the prior year on the first quarter and 6.7 billion in the fourth quarter.

Amber Kramer: Adjusted net income was $22 million or <unk> 35 cents per diluted share and adjusted EBITDA was $36 million.

Amber Kramer: Now turning to our origination segment, our net loss of $3 million compared to a net loss of $24 million in the prior year first quarter.

Amber Kramer: This demonstrates the growth we have made as a business both through acquisitions and organic recruiting our ability to capture originations across market environments as well as the timing of our acquisition of Academy mortgage in February of last year.

Amber Kramer: Our gain on sale margin in the first quarter came in at 376 basis points compared to 364 basis points in the prior year first quarter and 317 basis points in the fourth quarter unfunded originations.

Speaker Change: and I'm here to talk to you today about the growth we have made as a business, both through acquisitions and organic recruiting. Our ability to capture originations across a network of environments as well as the timing of our acquisition of Academy Mortgage in February of last year. Our gain on sale margin in the first quarter came in at 376 base points compared to 364

Amber Kramer: Gain on sale margins on pull through adjusted lock volume was 316 basis points up from 290 basis points in the prior year first quarter and 360 basis points in the fourth quarter.

Amber Kramer: The uptick in Q1 is consistent with our historical experience, primarily due to seasonality and timing.

Speaker Change: Carter, I'm funded every day. I'm Amazon Margin, and the first game I'm still Margin is on full-trade just a box volume with 313 basic points, points in the upper 394, basis points in the prior year for a quarter, and 360 later I'm funded in the fourth quarter.

Amber Kramer: Total pull through adjusted lock volume was $5 9 billion compared to $4 6 billion in the prior year first quarter and $5 7 billion in the fourth quarter.

Amber Kramer: For our servicing segment our portfolio grew to 94 billion, we reported a net loss of $5 million compared to a net income of $84 million in the prior year first quarter and $152 million in the fourth quarter.

Amber Kramer: The loss in this year's first quarter was primarily due to the downward valuation adjustments MSR prices of $70 million due to the period end interest rate declines.

Amber Kramer: Our servicing portfolio continues to be a valuable source for ongoing cash flow future opportunities for loan recapture and it reinforces our customer for life strategy.

Speaker Change: The loss in this year's third quarter was primarily due to the downward valuation adjustment of MSR worth $70 million due to the period-end interest rate decline. Our servicing portfolio continues to be a valuable source for ongoing cash flow, future opportunities for loan recapture, and it reinforces our customer-for-life strategy. Furthermore, our business model, which combines the originations of the servicing segment, provides for a natural hedge over time as rate declines should translate into higher

Amber Kramer: Furthermore, our business model, which combines the originations in the servicing segment provides for a natural hedge over time as rate declines should translate into higher originations, both purchase and refinance it.

Amber Kramer: Our balance sheet remains strong and provides us with the flexibility to continue to invest in our growth turning to liquidity as of March 31, cash and cash equivalents totaled $112 million, while unutilized long funding capacity was $1 5 billion and the Unutilized mortgage servicing rights lines of credit was $195 million.

Speaker Change: and Richard Rabbit and Refinances. Furthermore, our business model, which can be found, our balance sheet remains strong and provides us with the flyability, not kidding, and over in our growth, as rate declined. Turning to the fluidity as a more higher rate version, casting a cast equivalent side at 112 million.

Amber Kramer: Based on total committed mounts and borrowing base limitations.

Amber Kramer: Maintaining a well positioned balance sheet continues to be a key priority for guild.

Amber Kramer: Our leverage ratio was one six times at quarter end, a strong indicator of our financial stewardship.

Speaker Change: Well, Unutilized Loan Funding Control, and we're buying the $0.5 billion to continue. And the Unutilized Remorgive Service St. Rice Fund, which is about $1195 million, based on telecommitted amount of $1,000,000, based on $1,000,000.

Tangible net book value per share was $15 77.

Amber Kramer: We are confident in our ability to navigate any market environment, while simultaneously, making strategic investments to enhance our long term value proposition.

Speaker Change: Well, unutilized loan by maintaining a well-positioned balance, and I can think it needs to be a key priority for a new deal. Our leverage ratio was 1.5 times at quarter-end, a strong endowator of our financial stewardship.

Amber Kramer: In addition, we continued our efforts to return capital to shareholders.

Amber Kramer: Specifically during the first quarter, we repurchased approximately 35000 shares at an average stock price of $12 94 per share.

Amber Kramer: As of March 31, 2025, there was $9 $5 million remaining under the original $20 million share repurchase authorization.

Amber Kramer: Additionally, as discussed on our last call during the first quarter. The company's board of directors declared and paid a special cash dividend of <unk> 50 per share on the company's class, a and class B common stock.

Amber Kramer: In April we generated $2 3 billion of loan originations and $2 5 billion of pull through adjusted lock volume.

Speaker Change: $25 million dollars a meeting under the original $20 million share replacement at an average stock price of $12,000. Additionally, as discussed on our last call during the first quarter, the company's private director is now declared and paid as the actual cash dividend of $50 million per share on the company's class day and class B common stock. In April , we generated $2.3 billion of loan origination, and $2.5 billion of crypto-rejected and long-body air.

Amber Kramer: As we look ahead, we recognize that market conditions may continue to show fluctuations yet we're encouraged by our sustained momentum in growing market share, particularly the strength, we're seeing in our originations business.

Amber Kramer: Our strategic investments in platform development combined with successful organic growth initiatives and targeted acquisitions position us well to deepen our lasting customer relationships.

Speaker Change: on the company's classic. As we look ahead, we recognize that market conditions may continue to show fluctuation. Yet, we're encouraged by our own everyday momentum and growing market share and a particular way to strengthen in our origination's business. As we look ahead, our future investment in our platform development, you combine with such as organic, growth, energy, and targeted acquisition and growing our market. Position us well to deepen our working customer relationship in our origination's business. Well, the broader market recovery continues in the craft for our ultimate. We remind patient and focus on our long-time.

Amber Kramer: While the broader market recovery continues to progress gradually we remain patient and focused on our long term vision.

Amber Kramer: We have full confidence that our enhanced platform and strategic positioning will drive accelerated growth as market conditions normalize.

Amber Kramer: And with that we'll open up the call for questions operator.

Amber Kramer: Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad a confirmation telephone indicate your line is in the question queue.

Speaker Change: We have full confidence that our hands we've got for our Master Touching Tradition Injust. We'll drive accelerated through as market renditions normalize, gradually, and with that, we'll open up and call for our live-in-from-bitch operator.

Amber Kramer: Fresh start two to remove yourself from the queue.

Amber Kramer: Participants using speaker equipment, it may be necessary to pick up your handset before pressing the sarkies.

Speaker Change: We have full confidence that we will now be conducting a question-and-and-and-and-and-and-and-and-and-and-and-and-and-and-and-and please press star with that and we'll open that telephone key pattern.

Rick Shane: First question, Rick Shane with Jpmorgan. Please go ahead.

Rick Shane: Hey, everybody. Thanks for taking my questions look it looks to me like the amortization expense on the MSR was down fairly sharply when you net out the the marks.

Speaker Change: The confirmation tone will indicate your line is in the question queue. You may press star 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star 2. The confirmation tone will indicate your line is in the question queue. First question, Rick Shane with JPMorgan. Please go ahead. Hey everybody, thanks for taking my questions. It looks to me like the amortization expense on the MSR was down fairly sharply.

Rick Shane: Can you help us understand that and sort of think about how to model that going forward because there were some pretty significant variance versus our model.

Rick Shane: Given where we thought speeds work.

Andrew: Andrew do you have that.

Rick Shane: Yep.

Rick Shane: Yeah, overall and prepayments were down.

Speaker Change: and Chris Bellahart. Hey everybody, thanks for taking my question. Can you help us understand that and sort of think about how to model that going forward because there were some pretty significant variants versus our model given where we thought Schmidt's from? The amortization expense on the elements are which down fairly sharply when you net out the marks.

Rick Shane: Quarter over quarter, and so the payoffs did go down slightly from the pay off percentage and there the rate is running off at the same in terms of value, but the payoffs were down overall.

Speaker Change: Amber, do you have any help us understand that and try to think about how to model that going? Overall, and prepayments were down year quarter over quarter. And so the pay off did go down slightly from the pay off percentage.

Rick Shane: First release percentage was 40% so slightly higher when youre looking at your roll forward on the portfolio overall, so keep that in mind as well.

Speaker Change: and the rate is running off at the same in terms of value, but the payoffs were down overall. The service release percentage was 40% to slightly higher when you're looking at your roll forward on the portfolio overall. So keep that in mind as well. Got it. Okay. Yeah, I have the amortization expense down.

Speaker Change: Got it okay, yes, I have the amortization expense down.

Rick Shane: Hang on one second.

Rick Shane: About 35% quarter over quarter.

Rick Shane: I, just didn't think speeds and move that much.

Rick Shane: And they did with the Refis in Q4 being up from October that we had and so with the that has impacted some of the the actual runoff.

Rick Shane: Runoff percentages on the payoff side.

Rick Shane: Got it and so it's really a timing issue of when rates moved in the first quarter rate.

Speaker Change: They did with the refives in Q4 being up from October that we had, and I just didn't think since I did move that month. It impacted some of the actual runoff percentages on the pay off side in Q4 being up from October . Got it. And so it's really a timing issue of when rates moved in the first quarter at the end. Okay, that actually makes sense to me. And then look, I know you guys don't provide specific guidance, so it's really a timing issue.

Rick Shane: At the end, Okay that actually makes sense to me and then look I know you guys don't provide specific.

Rick Shane: Specific guidance, but curious as we sort of move.

Rick Shane: Pretty deep into second quarter now what you guys are seeing in terms of margins and how we should be thinking about the dynamics currently.

Rick Shane: Yeah overall, we're not really yeah, we're not really seeing any changes that are any different than what we've you know.

Rick Shane: Seen in the past. So you know we've talked about this $3 30 to $3 40, so although we don't provide guidance. If you look historically, we're still running around that we had a gain on sale margins. You know we have the typical seasonality that we had in Q1.

Rick Shane: There was a pick up over Q4, which when you look back.

Rick Shane: It is the same as it's always been it was exacerbated by the market volatility in Q4 versus Q1, but overall on average we're still running around that same 330 to $3 40, and we don't see any changes you know that would affect that number.

Speaker Change: We have the typical seasonality that we had in Q1, there was a pickup over Q4, which when you look back is the same as it's always been. It was exaggerated by the market volatility in Q4 versus Q1, but overall on average we're still running around that same 330 to 340 and we don't see any changes that would affect that number. Terrific. Thank you so much.

Speaker Change: Terrific. Thank you so much.

Rick Shane: Okay.

Don <unk>: Next question, Don <unk> with Wells Fargo. Please go ahead.

Speaker Change: I was just curious if you are thinking.

Speaker Change: Thinking of any impact to your business with the rocket acquisition of Redfin and Mr. Cooper.

Speaker Change: You already have an origination.

Speaker Change: Substantial servicing business, but is there anything you are thinking about differently strategically.

Fandetti with Roll Fargo, please go ahead. That changes.

Speaker Change: You know I think we've been focused on trying to engage the customer earlier in the process, which is exactly you know what there and we're trying to focus on with the redfin transaction and as well as Cooper so.

John Pandetti: Hi, I was just curious if you're thinking of any impact to your business with the Rocket Acquisition or Red Finn, John Fandetti, with Wilkins, Wilkins, Wilkins, Wilkins, Wilkins, Wilkins,

Speaker Change: You know that I think we're continuing to look at and try to figure out ways that we can.

Speaker Change: Get to the top of the funnel faster.

Speaker Change: But you know we're we've been focused on as you know our local presence local fulfillment and sales.

Operator: At this time, all participants are in a 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.

Page the customer earlier in the process, which is exactly you know what there we're trying to focus on with the redfin transaction and as well as Cooper them. So you know that I think we're continuing to look at and try to figure out ways that we can.

Speaker Change: And specific to purchase business and you know, we're we're still have such a big gap in the purchase business and you know our.

Operator: I would now like to turn the conference over to Investor Relations. Please go ahead.

Unknown Executive: 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. Preliminary results for any portion of a quarter may not be indicative of full quarter results and are subject to management and auditor customary review procedures.

Speaker Change: Our studies that we've looked at still you know imply that a customer at the local level still has a good need for that that local presence and expertise and you know we've continued to build and use any type of.

Get to the top of the funnel faster.

But you know we're we've been focused on as you know.

Local presence local fulfillment and sales.

And specific to purchase business and you know, we're we're still have such a big gap in the purchase business and you know R.

Speaker Change: Surveys that we have the trust factor is huge for us and we continue to rank very high in trust.

Unknown Executive: Actual results for future periods may differ materially from those expressed or implied by these board-looking statements due to a number of risks or other factors that are described in greater detail under the section titled Risk Factors in Guild's most recently filed annual report on Form 10-K and in other reports subsequently filed with the U.S. Securities and Exchange Commission.

Our studies that we've looked at still you know imply that a customer at the local level still has a good need for that that local presence and expertise and you know we've continued to build and use any type of.

Speaker Change: So we feel like it's it's still we're still in a really good position and you know.

Speaker Change: Kudos to rocket for the transaction, but.

Speaker Change: We all have them.

Speaker Change: The type of customer that customers that you know we're suited for and for US. It's that first time home buyer that really needs.

Surveys that we have.

Unknown Executive: 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 Guild's Investor Relations website.

The trust factor is huge for us and we continue to rank very high in trust.

Speaker Change: More handholding, along the way and and our brand at the local.

Speaker Change: The local areas that we serve our brand is stronger than it's ever been so we feel good about where we're at.

So we feel like it's it's still we're still in a really good position.

And you know I I.

Terry Schmidt: I'd now like to turn the call over to our Chief Executive Officer, Terry Schmidt. Good afternoon, everyone, and thank you for joining us today for our first quarter 2025 earnings call. With me today is David Neylan, our President and Chief Operating Officer, and Amber Kramer, our CFO. Our results once again demonstrate the success of our growth strategy, our positive momentum in market share gain, and our ability to execute in every market cycle. I'm pleased to report in the first quarter we achieved 35 percent growth in originations year over year to $5.2 billion while delivering positive adjusted EBITDA of $36.4 million and adjusted net income of $21.6 million.

Speaker Change: Thank you.

Kudos to rocket for the transaction, but I think we all have them.

Speaker Change: Mhm.

Speaker Change: Okay I'll go over them now with citizens JMP. Please proceed.

The type of customer that customers that you know we're suited for and for US. It's that first time homebuyer that really needs.

Speaker Change: Hi, good afternoon, thanks for taking the question.

Speaker Change: Really kind of wondering what.

More handholding, along the way and and our brand at the local.

Speaker Change: What your thoughts are on growth going forward organic.

Speaker Change: Versus acquisition in the latter case, what are your thoughts on on sort of the landscape for potential acquisitions at the moment as you see it.

The local areas that we serve our brand is stronger than it's ever been so we feel good about where we're at.

Thank you.

Mhm.

Speaker Change: Yeah on the acquisition front.

Mechanical overtime with citizens JMP. Please proceed.

Speaker Change: We're always talking to a lot of suitors I should say, but we're pretty selective to make sure that we get the right people once we make a decision to acquire so it's it's a long process, sometimes we're talking to people for six months.

Hi, good afternoon, thanks for taking the question.

I'm really kind of wondering how are you.

What your thoughts are on growth going forward organic.

Versus acquisition in the latter case, what are your thoughts on sort of the landscape for potential acquisitions at the moment as you see it.

Terry Schmidt: These results showcase the benefits of our strategy to invest through market downturn, and we continue to grow at a faster rate than the broader industry. Our year-over-year growth in Originations reflects not only the Academy acquisition we made in the first quarter of last year, but also the organic recruiting efforts we've completed throughout the past year. Since the end of 2020, we have more than doubled our loan officer headcount. Our servicing business also continues to expand, now with more than $94 billion in our portfolio despite market volatility. This homegrown portfolio provides financial stability, fuels our customers for life strategy, and gives our loan officers more at-bats with their past clients.

Speaker Change: Sometimes it's two years and so we're constantly out there looking and vetting and getting to know people and making sure that we make the right decision along the way I would say that this this first.

Yeah on the acquisition front, we're always talking to a lot of suitors I should say, but we're pretty selective to make sure that we get the right people once we make a decision to acquire.

Speaker Change: Almost half of the year the organic side of the equation for us has been stronger than the M&A, but where we're constantly doing both and you know our like I said in the prior question. Our brand is extremely strong there's still a lot across.

It's a long process, sometimes we're talking to people for six months, sometimes it's two years and so we're constantly you know out.

Out there looking and vetting and getting to know people and making sure that we make the right decision along the way I would say that this this first.

Speaker Change: It's the country that we can conquer and so we're going to we're going to continue to.

Speaker Change: To you know work on growing the share.

Speaker Change: Yes. This is David here I would just add to Terry's comments that on the organic recruiting side, we're definitely seeing a little bit of a flight to quality, particularly as our percentage of purchase business has continued to increase last year, we were at 88% versus the MBA average at 72% and as I.

Almost half of the year the organic side of the equation for us has been stronger than the M&A, but we're constantly doing both and you know our our like I said in the prior question. Our brand is extremely strong there's still a lot across the.

Terry Schmidt: We have built a model designed to perform in every market cycle, and we have successfully navigated multiple cycles throughout our history. Our consistent productivity improvements showcase this strength and deep experience as we continue to thrive, even as the broader market is experiencing prolonged volatility. We do not expect the current conditions to change in the short term, but we are all well positioned for success, even in today's uncertain landscape. As we look ahead, we are particularly pleased with our ability to leverage our balanced business model, core platform advantages, and the strength of our brand to continue to drive our growth.

Speaker Change: Mentioned in some of my comments earlier according to my records the value proposition here at Gilead mortgage whether it's via acquisition or through the organic recruitment.

A country that we can conquer and so we're going to we're going to continue to to work on growing the share.

Yes. This is David here I would just add to Terry's comments that on the organic recruiting side, we're definitely seeing a little bit of a flight to quality, particularly as our percentage of purchase business has continued to increase last year, we were at 88% versus the M. B a average of 72%.

Speaker Change: Very attractive and it's been proven out to show that loan officers killed on average experienced 30% more productivity than the industry average so we're having great success in both.

Speaker Change: And heavily focused in both areas.

Terry Schmidt: While we do not control the market environment, we built a durable, balanced business model that should perform in all cycles. This includes Our continued focus on purchase and distributed retail, which has proven to be a significant advantage in this rate environment. a servicing book that provides stability with consistent cash flows. Integrated servicing recapture platform to create customers for life and deliver additional origination volume when refi and life events occur. Robust product offering to deliver specialty programs for unique situations. Continued organic growth as we benefit from industry consolidation and the strength of our brand in times of uncertainty, and prudent financial management and flexibility that position us to selectively pursue opportunistic acquisitions and further invest in our platform.

Speaker Change: Great. Thank you all appreciate it.

As I mentioned in some of my comments earlier. According to my records the value proposition here at Gilead mortgage whether it's via acquisition or through the organic recruitment is very attractive and it's been proven out to show that loan officers killed on average experienced 30% more productivity than the industry average.

Speaker Change: Next.

Speaker Change: Western Eric Hagen with <unk>. Please go ahead.

Speaker Change: Hi, This is actually Jake <unk> on for Eric Hagen. Thanks for taking my questions I wanted to see if you guys had any color on loan officer compensation rules, which might change with the new rulemaking and just how that could impact margins.

We're having great success in both.

And heavily focused in both areas.

Speaker Change: We.

Great. Thank you all appreciate it.

Speaker Change: Worst do we we haven't changed anything as far as you know our loan officer compensation.

Next question, Eric Hagen with <unk>. Please go ahead.

Speaker Change: I think what youre going to see is with the the change in the administration you may see some originators taking different positions on com. We you know we're going to follow the regulations I think some of those.

Hi, This is actually Jake <unk> on for Eric Hagen, Thanks for taking my questions.

Do you see if you guys had any color on loan officer compensation rules, which might change with the new rulemaking and just how that could impact margins.

Terry Schmidt: Looking ahead, we believe we have positioned Guild for outperformance relative to the industry, regardless of the current market. We anticipate continued volatility, but we remain confident that we already have the balanced model needed for this environment, as we have spent decades building this business model to adapt to a variety of markets. We believe those who can be flexible and adjust in these conditions will be the winners, which is exactly how we have built our platform. We continue to capitalize on opportunities while remaining disciplined in our approach. Our focus remains consistent.

We.

Speaker Change: Memorandums that the CFPB came out with.

Worst.

Haven't changed anything as far as you know are.

Speaker Change: Prior.

Speaker Change: Those you know.

Loan officer compensation.

Speaker Change: There's there's interpretations there that I think maybe some will be a little bit more aggressive going forward with the changes, but you know.

I think what you're going to see is with the the change in the administration you may see some.

Originators, taking different positions on comp.

Speaker Change: We're pretty much status quo and don't see that that's going to be impactful for us or our competition.

We you know we're going to follow the regulations I think some of those.

Speaker Change: Gotcha. Okay. Thank you and then do you have any perspectives on home prices and the effect of tariffs on housing values and just kind of whether you see it driving a longer term impact on asset valuations.

Memorandums that the CFPB came out with <unk>.

Prior.

Those.

You know, there's there's interpretations there that I think.

Terry Schmidt: Market Share Gains, Operational Efficiencies, New Product Development, Organic Recruiting, and Opportunistic M&A.

Maybe some will be a little bit more aggressive.

Speaker Change: Yeah. The tariffs I mean, I think we're still then the jury's out a little bit and I think we'll know a lot more in the next 90 days.

Going forward with the changes, but you know.

We're pretty much status quo and don't see that that's going to be impactful for us or our competition.

David Neylan: With that, I'd like to turn it over to David to provide more details on our operational achievements and outlooks. David? Thank you. As Terry highlighted, Guild has delivered another strong quarter driven by our growth and operational improvements across the company, particularly in the origination segment. I'd like to spend just a few moments discussing how our execution of acquisitions and organic growth has resulted in tremendous progress in our origination performance, positioning us for continued success in the current market environment. As a result of our growth efforts, we have delivered consistent improvement in our origination segment, improving quarterly profitability by 21 million compared to the first quarter a year ago.

Speaker Change: You know obviously the.

Speaker Change: The I think the cost of construction is you know that's always a concern.

Gotcha. Okay. Thank you and then do you have any perspective on home prices and the effect of tariffs on housing values and just kind of whether you see it driving a longer term impact on asset valuations.

Speaker Change: With new construction and I think even today. This last 90 days that the inventory of homebuilding and and homes that had been final. It's it's it's growing a little bit. So I mean, we're seeing that the values have been pretty steep.

Yeah.

I mean, I think we're still in the jury's out a little bit and I think we'll know a lot more in the next 90 days.

You know obviously the.

Speaker Change: Able in a few markets there kind of declining a little bit.

The I think the cost of construction is you know that's always a concern.

Speaker Change: But we're not seeing that much change and we don't see that that's going to impact you know are our volume much either way either up or down.

With new construction and I think even today. This last 90 days that the inventory of homebuilding and and homes that had been final. It's it's it's growing a little bit. So I mean, we're seeing that the values have been pretty.

David Neylan: This has been accomplished in three ways. First, we have added scale, as Terry mentioned, by successfully retaining loan officers who join via acquisitions, while also welcoming additional new loan officers through organic recruiting at a time when top producers are making a flight to quality. Second, our experience playbook and expertise with onboarding resulted in quickly achieving operational leverage as we grew. This can be attributed to disciplined integration efforts from our seasoned teams across the country. Finally, Guild's investments in superior technology, products, and sales coaching have delivered enhanced productivity for our loan office. We have been seeing this positive impact over the past several quarters, and according to MMI records, loan officers at Guild, on average, experience 30% more productivity than the industry average.

Speaker Change: Great. Thank you.

Speaker Change: Mhm.

Speaker Change: I would like to turn the floor over to Terry Smith for closing remarks.

Speaker Change: Okay.

Speaker Change: Thank you everybody for being on the call and listening to our performance, we're happy with what we accomplished in the first quarter and we're looking forward to telling our story next quarter. Thank you.

Table in a few markets there kind of declining a little bit.

But we're not seeing that much change and we don't see that that's going to impact you know our our volume.

Much either way either up or down.

Speaker Change: This concludes today's teleconference. You may disconnect your lines at this time and thank you for your participation.

Great. Thank you.

Speaker Change: Yeah.

Mhm.

I would like to turn the floor over to Terry Smith for closing remarks.

Okay.

Thank you everybody for being on the call and listening to our performance, we're happy with what we accomplished in the first quarter and we're looking forward to telling our story next quarter. Thank you.

David Neylan: We believe this strategy and durable, balanced business model has created a foundation from which we will continue to benefit, even in a challenging and volatile market. Our outlook for the peak spring and summer home purchase market is cautiously optimistic. We believe our national footprint, community-driven origination teams, and customer-for-life servicing strategy are well-suited for serving the needs of our customers in every market cycle. We are seeing strong early results and growing momentum to serve more first-time homebuyers through our Promise of Home educational events in major markets across the U.S. We also continue to invest in product and technology innovation that will position Guild to serve the homebuyer of the future.

Speaker Change: This concludes today's teleconference. You may disconnect your lines at this time and thank you for your participation.

Speaker Change: [music].

David Neylan: To summarize, we're pleased with our first quarter performance and remain confident in our strategic direction despite market volatility. We intend to continue to grow through organic recruiting and strategic acquisitions with a disciplined focus on increased productivity for our loan officers and economies of scale in our business. We appreciate your continued interest and support of Guild, and we look forward to updating you on our progress in the coming quarters.

Amber Kramer: I'll now hand over to Amber, who will provide a more detailed financial overview. Amber? Thank you, David.

Amber Kramer: Given a return to more traditional seasonal patterns in the mortgage industry, I will provide commentary on both sequential quarter and year-over-year comparisons. For the first quarter of 2025, we generated $5.2 billion of total loan originations, compared to $3.9 billion in the prior year first quarter and $6.7 billion in the fourth quarter. Net revenue totals $198 million compared to $232 million in the prior year and $373 million in the fourth quarter, which generated net loss attributable to Guild of $24 million compared to a net income of $28 million in the prior year and $98 million in the fourth quarter.

Amber Kramer: Adjusted net income was $22 million or $0.35 per diluted share and adjusted EBITDA was $36 million. Now turning to our origination segment, our net loss is $3 million compared to a net loss of $24 million in the prior year first quarter. This demonstrates the growth we have made as a business, both through acquisitions and organic recruiting, our ability to capture originations across market environments, as well as the timing of our acquisition of Academy Mortgage in February of last year. Our gain on sale margin in the first quarter came in at 376 basis points compared to 364 basis points in the prior year first quarter and 317 basis points in the fourth quarter on funded origination.

Amber Kramer: Gain on sale margins on pull-through adjusted lock volume was 316 basis points, up from 290 basis points in the prior year first quarter and 360 basis points in the fourth quarter. The uptick in Q1 is consistent with our historical experience, primarily due to seasonality and timing. Total pull-through adjusted loss volume was $5.9 billion compared to $4.6 billion in the prior year first quarter and $5.7 billion in the fourth quarter. For our servicing segment, our portfolio grew to $94 billion. We reported a net loss of $5 million compared to a net income of $84 million in the prior year first quarter and $152 million in the fourth quarter.

Amber Kramer: The loss in this year's first quarter was primarily due to the downward valuation adjustment of MSRs of $70 million due to the period end interest rate decline. Our servicing portfolio continues to be a valuable source for ongoing cash flow, future opportunities for loan recapture, and it reinforces our customer for life strategy. Furthermore, our business model, which combines the originations and the servicing segments, provides for a natural hedge over time as rate declines should translate into higher originations, both purchase and refinance.

Amber Kramer: Our balance sheet remains strong and provides us with the flexibility to continue to invest in our growth. Turning to liquidity, as of March 31st, cash and cash equivalents totaled $112 million, while unutilized loan funding capacity was $1.5 billion, and the unutilized mortgage servicing rights lines of credit was $195 million, based on total committed amounts and borrowing base limitations. Maintaining a well-positioned balance sheet continues to be a key priority for Guild. Our leverage ratio was 1.6 times at quarter end, a strong indicator of our financial stewardship. Tangible net book value per share was $15.77. We are confident in our ability to navigate any market environment while simultaneously making strategic investments to enhance our long-term value proposition.

Amber Kramer: In addition, we continued our efforts to return capital to shareholders. Specifically, during the first quarter, we repurchased approximately 35,000 shares at an average stock price of $12.94 per share. As of March 31, 2025, there was $9.5 million remaining under the original $20 million share repurchase authorization. Additionally, as discussed on our last call, during the first quarter, the company's board of directors declared and paid a special cash dividend of $0.50 per share on the company's Class A and Class B common stock. In April, we generated $2.3 billion of loan originations and $2.5 billion of pull-through-adjusted locked volume.

Amber Kramer: As we look ahead, we recognize that market conditions may continue to show fluctuations, yet we're encouraged by our sustained momentum and growing market share, particularly the strength we're seeing in our originations business. Our strategic investments and platform development, combined with successful organic growth initiatives and targeted acquisitions, position us well to deepen our lasting customer relationship. While the broader market recovery continues to progress gradually, we remain patient and focus on our long-term vision. We have full confidence that our enhanced platform and strategic positioning will drive accelerated growth as market conditions normalize.

Operator: And with that, we'll open up the call for questions.

Operator: Operator? Thank you.

Operator: We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.

Rick Shane: First question, Rick Shane with JP Morgan. Please go ahead. Hey, everybody, thanks for taking my questions. Look, it looks to me like the amortization expense on the MSR was down fairly sharply when you net out the marks. Can you help us understand that and sort of think about how to model that going forward? Because there were some pretty significant variance versus our model, given where we thought speeds were.

Amber Kramer: Amber, do you want to take that? Yep. Yeah, overall, prepayments were down quarter over quarter. And so the payoff did go down slightly from a payoff percentage. And the rate is running off at the same in terms of value, but the payoffs were down overall. The service release percentage was 40%, so slightly higher when you're looking in your roll forward on the portfolio overall. So keep that in mind as well. Got it. Okay. Yeah, I have the amortization expense down. Hang on one second. about 35% quarter over quarter, and I just didn't think speeds had moved that much.

Rick Shane: They did with the refis in Q4 being up from October that we had, and so that has impacted some of the actual runoff percentages on the payoff side. Got it. And so it's really a timing issue of when rates moved in the first quarter at the end. OK, that actually makes sense to me.

Amber Kramer: And then, look, I know you guys don't provide specific guidance, but curious as we sort of move, you know, we're pretty deep into second quarter now, what you guys are seeing in terms of margins and how we should be thinking about the dynamics currently. Yeah, overall, we're not really, yeah, we're not really seeing any changes that are any different than what we've, you know, seen in the past. So, you know, we've talked about this 330 to 340. So, although we don't provide guidance, if you look historically, we're still running around that we had our gain on sale margins, you know, we have a typical seasonality that we had in Q1, that was a pickup over Q4, which when you look back, is the same as it's always been, it was exasperated by the market volatility in Q4 versus Q1.

Amber Kramer: But overall, on average, we're still running around that same 330 to 340. And we don't see any changes, you know, that would affect that number.

Rick Shane: Terrific. Thank you so much.

Don Fandetti: Next question, Don Fandetti with Wells Fargo. Please go ahead. I was just curious if you're thinking of any impact to your business with the rocket acquisition of Redfin and Mr. Cooper. Obviously, you already have an origination and pretty substantial servicing business. But is there anything you are thinking about differently strategic? You know, I think we've been focused on trying to engage the customer earlier in the process, which is exactly, you know, what we're trying to focus on with the Redfin transaction and as well as Cooper. So you know, that I think we're continuing to look at and try to figure out ways that we can get to the top of the funnel faster.

Terry Schmidt: But, you know, we've been focused on, as you know, local presence, local fulfillment and sales, and specific to purchase business and, you know, we're still have such a big gap in the purchase business and, you know, our studies that we've looked at still, you know, imply that a customer at the local level still has a good need for that. that local presence and expertise. And, you know, we've continued to build and use any type of surveys that we have. The trust factor is huge for us, and we continue to rank very high in trust. So we feel like it's still, we're still in a really good position.

Terry Schmidt: And, you know, kudos to Rocket for the transaction. But, you know, I think we all have. The type of customers that, you know, we're suited for, and for us, it's that first-time home buyer that really needs, you know, more hand-holding along the way. And our brand at the local areas that we serve, our brand is stronger than it's ever been. So we feel good about where we're at.

McHale-Governor: McHale-Governor with Citizens JMP, please proceed. Hi, good afternoon, and thanks for taking the question. I'm really kind of wondering how you what your thoughts are on growth going forward, organic and versus acquisition. In the latter case, what are your thoughts on on sort of the landscape for potential acquisitions at the moment as you see it? Thanks. Yeah, on the acquisition front, you know, we're always talking to a lot of suitors, I should say. But we're pretty selective to make sure that we get the right people once we make a decision to acquire. So it's a long process.

Terry Schmidt: Sometimes we're talking to people for six months, sometimes it's two years. So we're constantly, you know, out there looking and vetting and getting to know people and making sure that we make the right decision along the way. I would say that this first You know, almost half of the year, the organic side of the equation for us has been stronger than the M&A, but we're constantly doing both. And you know, our, like I said in the prior question, our brand is extremely strong. There's still a lot across the country that we can conquer. And so we're going to, we're going to continue to, to, you know, work on growing the share.

David Neylan: Yeah, this is David here. I would just add to Terry's comment that on the organic recruiting side, we're definitely seeing a little bit of a flight to quality, particularly as our percentage of purchase businesses continue to increase. Last year, we were at 88% versus the MBA average at 72%. And as I mentioned in some of my comments earlier, according to MMI records, the value proposition here at Guild Mortgage, whether it's via acquisition or through the recruitment is very attractive. And it's been proven out to show that loan officers at Guild on average experience 30% more productivity than the industry average.

David Neylan: So we're having great success in both and heavily focused in both areas.

McHale-Governor: Great.

Unknown Executive: Thank you all.

Unknown Executive: Appreciate it.

Eric Hagen: Next question, Eric Hagen with BTIG. Please go ahead.

Jake Katsikas: Hey, this is actually Jake Katsikas on for Eric Hagen. Thanks for taking my questions. I wanted to see if you guys had any color on loan officer compensation rules, which might change with new rulemaking and just how that could impact margin. We We haven't changed anything as far as our loan officer compensation. I think what you're going to see is with the change in the administration, you may see some originators taking different positions on comp. We're going to follow the regulations. I think some of those Memorandums that the CFPB came out with. prior that those You know, there's there's interpretations there that I think maybe some will be a little bit more aggressive going forward with the changes.

Terry Schmidt: But, you know, we're pretty much status quo and don't see that that's gonna be impactful for us or our competition. Got you.

Jake Katsikas: Okay, thank you.

Jake Katsikas: And then, do you have any perspective on home prices and the effect of tariffs on housing values, and just kind of whether you see it driving a longer term impact on asset valuations? Yeah, the tariffs, I mean, I think we're still the jury's out a little bit. And I think we'll know a lot more in the next 90 days. You know, obviously, the I think the cost of construction is, you know, that's always a concern with new construction. And I think even today, this last 90 days that the inventory of home building and, and homes that have been finaled, it's growing a little bit.

Terry Schmidt: So, I mean, we're seeing that the values have been pretty stable in a few markets, they're kind of declining a little bit. But we're not seeing that much change. And we don't see that that's going to impact, you know, our our volume much either way, either up or down.

Jake Katsikas: Great, thank you.

Terry Schmidt: I would like to turn the floor over to Terry Schmidt for closing remarks. Thank you everybody for being on the call and listening to our performance. We're happy with what we accomplished in the first quarter and we're looking forward to telling our story next quarter.

Operator: Thank you.

Operator: This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.