Gilde Holdings Co.the parent company of Guild Mortgagesuffered a loss of $66.9 million in the third quarter of 2024, after posting a profit of $37 million in the previous quarter. Meanwhile, production volume rose to $6.9 billion, up 6% from the second quarter and 49% higher than the same period in 2023.
This led to the originations segment posting “profitable” results, according to CEO Terry Schmidt.
Net sales fell from $285.7 million in the second quarter of 2024 to $159.3 million in the third quarter. Net loss attributable to Guild was $66.9 million, while adjusted net income was $31.7 million, according to an 8-K filing with the Securities and Exchange Commission (SEC). Adjusted EBITDA for the quarter was $46.4 million.
Schmidt said in a statement that despite the loss, the company’s trajectory continues to reflect “positive momentum” based on investments it has made in previous acquisitions.
Schmidt added that a “clear differentiator” of the company is “the realization of the growth platform” resulting from the acquisitions, including Academy Mortgage at the beginning of the year. She added that new production is expected to grow regardless of the interest rate environment.
“Our focus on achieving profitable long-term market share gains, together with our balanced business model of origination and servicing, positions us for success in macroeconomic environments,” Schmidt said.
“We are confident in our platform, our products and our people, and expect to see increased production from our extensive origination network over time, while remaining disciplined to deliver long-term value to our shareholders .”
Amber Kramer, the company’s chief financial officer, elaborated on the company’s financial results during an earnings call on Wednesday. The company’s servicing portfolio grew to $91.4 billion in unpaid principal (UPB), but recorded a net loss of $74.6 million attributed to “the downward adjustment to MSRs of $124 million due to the decline in the interest,” says Kramer.
The UPB of the services portfolio increased 3% compared to the total of $89.1 billion at the end of June.
“Our servicing portfolio remains a valuable source of continued cash flow and future loan recapture opportunities, and it reinforces our customers-for-life strategy,” Kramer said. “In addition, our business model – which combines new production in the service segments – provides natural coverage over time, as interest rate declines should translate into higher new production, both in terms of purchases and refinancings.”
The company’s cash and cash equivalents at the end of September were $106.2 million, an increase of $3.8 million quarter over quarter.
In after-hours trading on Wednesday Guild share price fell to $12.99 after a peak of $14.37 earlier in the day.
