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loanDepot Announces Fourth Quarter and Year-End 2023 Financial Results

Vision 2025 productivity improvements more than offset market-driven revenue decline, resulting in 61% reduction in annual net loss. Company exits 2023 with strong liquidity position.

Full-year 2023 highlights:

  • Revenue decreased $282 million or 22% to $974 million from 2022, primarily driven by lower market volume; growth in servicing income and HELOC revenue as well as higher gain on sale margin partially offset the impact of volume decrease.
  • Total expenses decreased $693 million or 36% to $1.25 billion, primarily driven by cost productivity improvements and lower origination volume; 2023 expenses included $27 million of restructuring charges, lease and other asset impairment charges and accruals related to the expected settlement of outstanding litigation.
  • Annual net loss narrowed $375 million or 61% to $236 million.
  • Adjusted annual net loss declined by $315 million or 69% to $142 million.

Fourth quarter 2023 highlights:

  • Year-over-year revenue increased $59 million or 35% to $229 million primarily driven by higher servicing income, gain on sale margin and pull through weighted lock volume. Fourth quarter revenue decreased $37 million or 14% from third quarter 2023, primarily driven by seasonally lower volume partially offset by higher gain on sale margin.
  • Year-over-year expenses decreased $41 million or 12% to $303 million primarily on lower personnel related expenses. Fourth quarter expenses decreased $3 million or 1% from third quarter 2023.
  • During the quarter the company launched a supplemental cost reduction program targeting $120 million of annualized productivity improvements expected to benefit 2024. Through February 29, 2024, the company has confirmed approximately 86% of the planned improvements.
  • Year-over-year net loss decreased from $158 million to $60 million. Quarterly net loss increased by $26 million from the third quarter of 2023 primarily due to seasonality.
  • Year-over-year adjusted net loss decreased from $107 million to $27 million. Quarterly adjusted net loss increased by $1 million from the third quarter of 2023.
  • Company reports cash balance of $661 million and continues to maintain strong liquidity profile.

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 fourth quarter and year-ended December 31, 2023.

“loanDepot made substantial progress in 2023, significantly resetting its cost structure and making critical investments in our technology platforms and business processes, which we believe position us to capture the benefits of the eventual rebound in mortgage volumes,” said President and Chief Executive Officer Frank Martell.

“We are entering 2024 with a more durable revenue model built around a strong multi-channel origination business and a low cost, high-quality servicing platform that underpins our strategy of becoming a trusted partner for individuals and families on their homeownership journey. We will continue to aggressively pursue automation and productivity programs to support expanded operating leverage and continue to fund reinvestment in solutions that support the increasingly diverse communities that represent a growing number of homebuyers,” Martell added.

“During the course of 2023, we reduced our cost structure by $693 million,” said Chief Financial Officer David Hayes. “We expect significant additional benefits from our previously announced $120 million annualized cost reduction program during 2024. Our cost reset has allowed us to maintain a strong liquidity position and at the same time support reinvestment in critical platforms and programs. As the housing and mortgage markets begin to recover, we believe we enter 2024 positioned for success through a relentless focus on delivering against the pillars of Vision 2025.”

Fourth Quarter Highlights:

Financial Summary

 

Three Months Ended

 

Year Ended

($ in thousands except per share data)

(Unaudited)

Dec 31,

2023

 

Sep 30,

2023

 

Dec 31,

2022

 

Dec 31,

2023

 

Dec 31,

2022

Rate lock volume

$

6,417,419

 

 

$

8,295,935

 

 

$

6,933,099

 

 

$

32,155,455

 

 

$

68,553,340

 

Pull through weighted lock volume(1)

 

4,407,386

 

 

 

5,685,209

 

 

 

4,196,894

 

 

 

21,475,262

 

 

 

45,164,915

 

Loan origination volume

 

5,370,708

 

 

 

6,083,143

 

 

 

6,382,743

 

 

 

22,671,731

 

 

 

53,778,456

 

Gain on sale margin(2)

 

2.43

%

 

 

2.74

%

 

 

1.45

%

 

 

2.60

%

 

 

1.63

%

Pull through weighted gain on sale margin(3)

 

2.96

%

 

 

2.93

%

 

 

2.21

%

 

 

2.75

%

 

 

1.94

%

Financial Results

 

 

 

 

 

 

 

 

 

Total revenue

$

228,626

 

 

$

265,661

 

 

$

169,655

 

 

$

974,022

 

 

$

1,255,796

 

Total expense

 

302,571

 

 

 

305,128

 

 

 

343,735

 

 

 

1,252,330

 

 

 

1,945,773

 

Net loss

 

(59,771

)

 

 

(34,262

)

 

 

(157,762

)

 

 

(235,512

)

 

 

(610,385

)

Diluted loss per share

$

(0.16

)

 

$

(0.09

)

 

$

(0.46

)

 

$

(0.63

)

 

$

(1.75

)

Non-GAAP Financial Measures(4)

 

 

 

 

 

 

 

 

 

Adjusted total revenue

$

251,450

 

 

$

266,363

 

 

$

188,501

 

 

$

1,019,714

 

 

$

1,216,041

 

Adjusted net loss

 

(26,660

)

 

 

(25,405

)

 

 

(107,156

)

 

 

(142,443

)

 

 

(457,601

)

Adjusted EBITDA (LBITDA)

 

14,957

 

 

 

20,497

 

 

 

(86,836

)

 

 

18,907

 

 

 

(446,938

)

   

(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.

Operational Highlights

  • Quarterly non-volume related expenses increased $4.9 million since the third quarter of 2023, primarily due to higher restructuring related charges, lease and other asset impairment costs, and legal expenses.
  • Incurred restructuring charges of $3.5 million and lease and other asset impairment charges of $0.8 million during the quarter for a total of $4.3 million, an increase of $2.1 million from the third quarter of 2023.
  • Accrued $3.7 million of legal expenses related to the expected settlement of outstanding litigation compared to $2.0 million accrued during the third quarter of 2023.
  • Pull through weighted lock volume of $4.4 billion for the fourth quarter of 2023, a decrease of $1.3 billion or 22% from the third quarter of 2023, resulting in quarterly total revenue of $228.6 million, a decrease of $37.0 million, or 14%, over the same period.
  • Loan origination volume for the fourth quarter of 2023 was $5.4 billion, a decrease of $0.7 billion or 12% from the third quarter of 2023.
  • Purchase volume increased to 76% of total loans originated during the fourth quarter, up from 71% of total loans originated during the third quarter of 2023 and flat to 76% of total loans originated during the fourth quarter of 2022.
  • For the three months ending December 31, 2023, our preliminary organic refinance consumer direct recapture rate1 decreased to 58% from the third quarter’s refinance rate of 69%.
  • Net loss for the fourth quarter of 2023 of $59.8 million as compared to net loss of $34.3 million in the third quarter of 2023. Net loss increased quarter over quarter primarily due to revenues decreasing more than the decrease in expenses.
  • Adjusted net loss for the fourth quarter of 2023 was $26.7 million as compared to adjusted net loss of $25.4 million for the third quarter of 2023.

Outlook for the first quarter of 2024

  • Origination volume of between $3.5 billion and $5.5 billion.
  • Pull-through weighted rate lock volume of between $3.5 billion and $5.5 billion.
  • Pull-through weighted gain on sale margin of between 270 basis points and 300 basis points.

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.

Servicing

 

 

Three Months Ended

 

Year Ended

Servicing Revenue Data:

($ in thousands)

(Unaudited)

 

Dec 31,

2023

 

Sep 30,

2023

 

Dec 31,

2022

 

Dec 31,

2023

 

Dec 31,

2022

Due to changes in valuation inputs or assumptions

 

$

(71,195

)

 

$

68,651

 

 

$

(10,094

)

 

$

2,227

 

 

$

363,064

 

Due to collection/realization of cash flows

 

 

(34,433

)

 

 

(38,502

)

 

 

(37,427

)

 

 

(149,211

)

 

 

(230,449

)

Realized (losses) gains on sales of servicing rights, net (1)

 

 

(192

)

 

 

3,516

 

 

 

2,285

 

 

 

10,486

 

 

 

(3,663

)

Net gain (loss) from derivatives hedging servicing rights

 

 

48,371

 

 

 

(69,353

)

 

 

(8,752

)

 

 

(47,919

)

 

 

(323,309

)

Changes in fair value of servicing rights, net

 

$

(57,449

)

 

$

(35,688

)

 

$

(53,988

)

 

$

(184,417

)

 

$

(194,357

)

 

 

 

 

 

 

 

 

 

 

 

Servicing fee income

 

$

132,482

 

 

$

120,911

 

 

$

107,221

 

 

$

492,811

 

 

$

449,150

   

(1)

Includes the provision for sold MSRs.

 

 

Three Months Ended

 

Year Ended

Servicing Rights, at Fair Value:

($ in thousands)

(Unaudited)

 

Dec 31,

2023

 

Sep 30,

2023

 

Dec 31,

2022

 

Dec 31,

2023

 

Dec 31,

2022

Balance at beginning of period

 

$

2,038,654

 

 

$

1,998,762

 

 

$

2,013,269

 

 

$

2,025,136

 

 

$

1,999,402

 

Additions

 

 

62,158

 

 

 

80,068

 

 

 

73,256

 

 

 

277,387

 

 

 

647,716

 

Sales proceeds

 

 

(9,521

)

 

 

(73,972

)

 

 

(13,874

)

 

 

(180,687

)

 

 

(765,151

)

Changes in fair value:

 

 

 

 

 

 

 

 

 

 

Due to changes in valuation inputs or assumptions

 

 

(71,195

)

 

 

68,651

 

 

 

(10,094

)

 

 

2,227

 

 

 

363,064

 

Due to collection/realization of cash flows

 

 

(34,433

)

 

 

(38,502

)

 

 

(37,427

)

 

 

(149,211

)

 

 

(230,449

)

Realized gains on sales of servicing rights

 

 

55

 

 

 

3,647

 

 

 

6

 

 

 

10,866

 

 

 

10,554

 

Balance at end of period (1)

 

$

1,985,718

 

 

$

2,038,654

 

 

$

2,025,136

 

 

$

1,985,718

 

 

$

2,025,136

    (1)

Balances are net of $14.0 million, $14.7 million, and $12.3 million of servicing rights liability as of December 31, 2023, September 30, 2023, and December 31, 2022, respectively.

 

 

 

% Change

Servicing Portfolio Data:

($ in thousands)

(Unaudited)

Dec 31,

2023

 

Sep 30,

2023

 

Dec 31,

2022

 

Dec-23

vs

Sep-23

 

Dec-23

vs

Dec-22

 

 

 

 

 

 

 

 

 

 

Servicing portfolio (unpaid principal balance)

$

145,090,199

 

 

$

143,959,705

 

 

$

141,170,931

 

 

0.8

%

 

2.8

%

 

 

 

 

 

 

 

 

 

 

Total servicing portfolio (units)

 

496,894

 

 

 

490,191

 

 

 

471,022

 

 

1.4

 

 

5.5

 

 

 

 

 

 

 

 

 

 

 

60+ days delinquent ($)

$

1,392,606

 

 

$

1,235,443

 

 

$

1,421,722

 

 

12.7

 

 

(2.0

)

60+ days delinquent (%)

 

1.0

%

 

 

0.9

%

 

 

1.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Servicing rights, net to UPB

 

1.37

%

 

 

1.42

%

 

 

1.43

%

 

 

 

 

Balance Sheet Highlights

 

 

 

 

 

 

 

% Change

 

($ in thousands)

(Unaudited)

Dec 31,

2023

 

Sep 30,

2023

 

Dec 31,

2022

 

Dec-23

vs

Sep-23

 

Dec-23

vs

Dec-22

Cash and cash equivalents

$

660,707

 

$

717,196

 

$

863,956

 

(7.9

) %

 

(23.5

) %

Loans held for sale, at fair value

 

2,132,880

 

 

2,070,748

 

 

2,373,427

 

3.0

 

 

(10.1

)

Servicing rights, at fair value

 

1,999,763

 

 

2,053,359

 

 

2,037,447

 

(2.6

)

 

(1.8

)

Total assets

 

6,151,048

 

 

6,078,529

 

 

6,609,934

 

1.2

 

 

(6.9

)

Warehouse and other lines of credit

 

1,947,057

 

 

1,897,859

 

 

2,146,602

 

2.6

 

 

(9.3

)

Total liabilities

 

5,446,564

 

 

5,309,594

 

 

5,688,461

 

2.6

 

 

(4.3

)

Total equity

 

704,484

 

 

768,935

 

 

921,473

 

(8.4

)

 

(23.5

)

An increase in loans held for sale at December 31, 2023, 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 December 31, 2023, and $3.9 billion at September 30, 2023. Available borrowing capacity was $1.2 billion at December 31, 2023.

Consolidated Statements of Operations

($ in thousands except per share data)

Three Months Ended

 

Year Ended

 

Dec 31,

2023

 

Sep 30,

2023

 

Dec 31,

2022

 

Dec 31,

2023

 

Dec 31,

2022

 

(Unaudited)

 

(Unaudited)

 

 

REVENUES:

 

 

 

 

 

 

 

 

 

Interest income

$

34,992

 

 

$

37,253

 

 

$

33,316

 

 

$

133,263

 

 

$

200,204

 

Interest expense

 

(33,686

)

 

 

(36,770

)

 

 

(29,676

)

 

 

(130,145

)

 

 

(150,897

)

Net interest income

 

1,306

 

 

 

483

 

 

 

3,640

 

 

 

3,118

 

 

 

49,307

 

 

 

 

 

 

 

 

 

 

 

Gain on origination and sale of loans, net

 

113,185

 

 

 

148,849

 

 

 

82,547

 

 

 

524,521

 

 

 

748,540

 

Origination income, net

 

17,120

 

 

 

17,740

 

 

 

10,287

 

 

 

65,209

 

 

 

129,736

 

Servicing fee income

 

132,482

 

 

 

120,911

 

 

 

107,221

 

 

 

492,811

 

 

 

449,150

 

Change in fair value of servicing rights, net

 

(57,449

)

 

 

(35,688

)

 

 

(53,988

)

 

 

(184,417

)

 

 

(194,357

)

Other income

 

21,982

 

 

 

13,366

 

 

 

19,948

 

 

 

72,780

 

 

 

73,420

 

Total net revenues

 

228,626

 

 

 

265,661

 

 

 

169,655

 

 

 

974,022

 

 

 

1,255,796

 

 

 

 

 

 

 

 

 

 

 

EXPENSES:

 

 

 

 

 

 

 

 

 

Personnel expense

 

132,752

 

 

 

141,432

 

 

 

165,626

 

 

 

573,010

 

 

 

1,027,008

 

Marketing and advertising expense

 

28,360

 

 

 

33,894

 

 

 

31,539

 

 

 

132,880

 

 

 

236,828

 

Direct origination expense

 

16,790

 

 

 

15,749

 

 

 

14,239

 

 

 

67,141

 

 

 

120,854

 

General and administrative expense

 

55,258

 

 

 

46,522

 

 

 

68,590

 

 

 

212,732

 

 

 

265,680

 

Occupancy expense

 

5,433

 

 

 

5,903

 

 

 

6,633

 

 

 

23,516

 

 

 

35,306

 

Depreciation and amortization

 

9,922

 

 

 

10,592

 

 

 

10,085

 

 

 

41,261

 

 

 

42,195

 

Servicing expense

 

8,572

 

 

 

8,532

 

 

 

6,633

 

 

 

27,687

 

 

 

53,106

 

Other interest expense

 

45,484

 

 

 

42,504

 

 

 

40,390

 

 

 

174,103

 

 

 

124,060

 

Goodwill impairment

 

 

 

 

 

 

 

 

 

 

 

 

 

40,736

 

Total expenses

 

302,571

 

 

 

305,128

 

 

 

343,735

 

 

 

1,252,330

 

 

 

1,945,773

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

(73,945

)

 

 

(39,467

)

 

 

(174,080

)

 

 

(278,308

)

 

 

(689,977

)

Income tax benefit

 

(14,174

)

 

 

(5,205

)

 

 

(16,318

)

 

 

(42,796

)

 

 

(79,592

)

Net loss

 

(59,771

)

 

 

(34,262

)

 

 

(157,762

)

 

 

(235,512

)

 

 

(610,385

)

Net loss attributable to noncontrolling interests

 

(32,578

)

 

 

(17,663

)

 

 

(80,492

)

 

 

(125,370

)

 

 

(337,365

)

Net loss attributable to loanDepot, Inc.

$

(27,193

)

 

$

(16,599

)

 

$

(77,270

)

 

$

(110,142

)

 

$

(273,020

)

 

 

 

 

 

 

 

 

 

 

Basic loss per share

$

(0.15

)

 

$

(0.09

)

 

$

(0.46

)

 

$

(0.63

)

 

$

(1.75

)

Diluted loss per share

$

(0.16

)

 

$

(0.09

)

 

$

(0.46

)

 

$

(0.63

)

 

$

(1.75

)

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

Basic

 

178,888,225

 

 

 

175,962,804

 

 

 

168,617,732

 

 

 

174,906,063

 

 

 

156,030,350

 

Diluted

 

326,288,272

 

 

 

175,962,804

 

 

 

168,617,732

 

 

 

174,906,063

 

 

 

156,030,350

 

Consolidated Balance Sheets

($ in thousands)

Dec 31,

2023

 

Sep 30,

2023

 

Dec 31,

2022

 

(Unaudited)

 

 

ASSETS

 

 

 

 

 

Cash and cash equivalents

$

660,707

 

$

717,196

 

$

863,956

Restricted cash

 

85,149

 

 

114,765

 

 

116,545

Loans held for sale, at fair value

 

2,132,880

 

 

2,070,748

 

 

2,373,427

Derivative assets, at fair value

 

93,574

 

 

86,622

 

 

39,411

Servicing rights, at fair value

 

1,999,763

 

 

2,053,359

 

 

2,037,447

Trading securities, at fair value

 

92,901

 

 

89,334

 

 

94,243

Property and equipment, net

 

70,809

 

 

76,762

 

 

92,889

Operating lease right-of-use asset

 

29,433

 

 

32,558

 

 

35,668

Loans eligible for repurchase

 

711,371

 

 

639,806

 

 

634,677

Investments in joint ventures

 

20,363

 

 

18,778

 

 

20,410

Other assets

 

254,098

 

 

178,601

 

 

301,261

Total assets

$

6,151,048

 

$

6,078,529

 

$

6,609,934

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

LIABILITIES:

 

 

 

 

 

Warehouse and other lines of credit

$

1,947,057

 

$

1,897,859

 

$

2,146,602

Accounts payable and accrued expenses

 

379,971

 

 

462,521

 

 

488,696

Derivative liabilities, at fair value

 

84,962

 

 

49,742

 

 

67,492

Liability for loans eligible for repurchase

 

711,371

 

 

639,806

 

 

634,677

Operating lease liability

 

49,192

 

 

53,579

 

 

61,675

Debt obligations, net

 

2,274,011

 

 

2,206,087

 

 

2,289,319

Total liabilities

 

5,446,564

 

 

5,309,594

 

 

5,688,461

EQUITY:

 

 

 

 

 

Total equity

 

704,484

 

 

768,935

 

 

921,473

Total liabilities and equity

$

6,151,048

 

$

6,078,529

 

$

6,609,934

Loan Origination and Sales Data

 

($ in thousands)

(Unaudited)

 

Three Months Ended

 

Year Ended

 

Dec 31,

2023

 

Sep 30,

2023

 

Dec 31,

2022

 

Dec 31,

2023

 

Dec 31,

2022

Loan origination volume by type:

 

 

 

 

 

 

 

 

 

 

Conventional conforming

 

$

2,830,776

 

$

3,158,107

 

$

3,823,857

 

$

12,206,382

 

$

35,931,625

FHA/VA/USDA

 

 

2,062,928

 

 

2,354,630

 

 

2,104,409

 

 

8,434,095

 

 

12,769,696

Jumbo

 

 

81,591

 

 

126,408

 

 

242,785

 

 

487,142

 

 

4,197,841

Other

 

 

395,413

 

 

443,998

 

 

211,692

 

 

1,544,112

 

 

879,294

Total

 

$

5,370,708

 

$

6,083,143

 

$

6,382,743

 

$

22,671,731

 

$

53,778,456

 

 

 

 

 

 

 

 

 

 

 

Loan origination volume by purpose:

 

 

 

 

 

 

 

 

 

 

Purchase

 

$

4,071,761

 

$

4,337,476

 

$

4,864,187

 

$

16,474,927

 

$

29,333,525

Refinance - cash out

 

 

1,221,538

 

 

1,660,578

 

 

1,432,195

 

 

5,821,102

 

 

19,613,365

Refinance - rate/term

 

 

77,409

 

 

85,089

 

 

86,361

 

 

375,702

 

 

4,831,566

Total

 

$

5,370,708

 

$

6,083,143

 

$

6,382,743

 

$

22,671,731

 

$

53,778,456

 

 

 

 

 

 

 

 

 

 

 

Loans sold:

 

 

 

 

 

 

 

 

 

 

Servicing retained

 

$

3,825,478

 

$

4,175,126

 

$

4,165,552

 

$

15,222,156

 

$

38,461,896

Servicing released

 

 

1,572,369

 

 

2,092,762

 

 

2,634,855

 

 

7,918,029

 

 

20,855,416

Total

 

$

5,397,847

 

$

6,267,888

 

$

6,800,407

 

$

23,140,185

 

$

59,317,312

 

 

 

 

 

 

 

 

 

 

 

Fourth 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 its 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/248239049

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 and related hedging gains and losses as they represent non-cash, unrealized adjustments resulting from changes in valuation assumptions, mostly due to changes in market interest rates, and are not indicative of the Company’s operating performance or results of operation. We also exclude stock-based compensation expense, which is a non-cash expense, 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

 

Year Ended

 

Dec 31,

2023

 

Sep 30,

2023

 

Dec 31,

2022

 

Dec 31,

2023

 

Dec 31,

2022

Total net revenue

 

$

228,626

 

$

265,661

 

$

169,655

 

$

974,022

 

$

1,255,796

 

Change in fair value of servicing rights, net of hedging gains and losses(1)

 

 

22,824

 

 

702

 

 

18,846

 

 

45,692

 

 

(39,755

)

Adjusted total revenue

 

$

251,450

 

$

266,363

 

$

188,501

 

$

1,019,714

 

$

1,216,041

(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.

Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss)

($ in thousands)

(Unaudited)

 

Three Months Ended

 

Year Ended

 

Dec 31,

2023

 

Sep 30,

2023

 

Dec 31,

2022

 

Dec 31,

2023

 

Dec 31,

2022

Net loss attributable to loanDepot, Inc.

 

$

(27,193

)

 

$

(16,599

)

 

$

(77,270

)

 

$

(110,142

)

 

$

(273,020

)

Net loss from the pro forma conversion of Class C common shares to Class A common stock (1)

 

 

(32,578

)

 

 

(17,663

)

 

 

(80,492

)

 

 

(125,370

)

 

 

(337,365

)

Net loss

 

 

(59,771

)

 

 

(34,262

)

 

 

(157,762

)

 

 

(235,512

)

 

 

(610,385

)

Adjustments to the benefit for income taxes(2)

 

 

7,776

 

 

 

4,845

 

 

 

25,339

 

 

 

32,872

 

 

 

92,337

 

Tax-effected net loss from the pro forma conversion of Class C common shares to Class A common stock

 

 

(51,995

)

 

 

(29,417

)

 

 

(132,423

)

 

 

(202,640

)

 

 

(518,048

)

Change in fair value of servicing rights, net of hedging gains and losses(3)

 

 

22,824

 

 

 

702

 

 

 

18,846

 

 

 

45,692

 

 

 

(39,755

)

Stock-based compensation expense

 

 

6,375

 

 

 

3,940

 

 

 

8,789

 

 

 

21,993

 

 

 

20,583

 

Restructuring charges(4)

 

 

3,517

 

 

 

2,004

 

 

 

5,178

 

 

 

11,811

 

 

 

25,126

 

Gain on extinguishment of debt

 

 

 

 

 

(1,651

)

 

 

 

 

 

(1,690

)

 

 

(10,528

)

Loss on disposal of fixed assets

 

 

325

 

 

 

93

 

 

 

1,568

 

 

 

1,430

 

 

 

12,594

 

Goodwill impairment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

40,736

 

Other impairment

 

 

455

 

 

 

129

 

 

 

2,388

 

 

 

925

 

 

 

17,500

 

Tax effect of adjustments(5)

 

 

(8,161

)

 

 

(1,205

)

 

 

(11,502

)

 

 

(19,964

)

 

 

(5,809

)

Adjusted net loss

 

$

(26,660

)

 

$

(25,405

)

 

$

(107,156

)

 

$

(142,443

)

 

$

(457,601

)

(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 income tax benefit reflect the effective income tax rates below, and the pro forma assumption that loanDepot, Inc. owns 100% of LD Holdings.

 

 

Three Months Ended

 

Year Ended

 

Dec 31,

2023

 

Sep 30,

2023

 

Dec 31,

2022

 

Dec 31,

2023

 

Dec 31,

2022

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)

 

2.87

%

 

6.43

%

 

10.48

%

 

5.22

%

 

6.37

%

Effective income tax rate

 

23.87

%

 

27.43

%

 

31.48

%

 

26.22

%

 

27.37

%

(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.

(4)

Reflects employee severance expense and professional services associated with restructuring efforts subsequent to the announcement of Vision 2025 in July 2022.

(5)

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

 

Year Ended

 

Dec 31,

2023

 

Sep 30,

2023

 

Dec 31,

2022

 

Dec 31,

2023

 

Dec 31,

2022

Net loss attributable to loanDepot, Inc.

 

$

(27,193

)

 

$

(16,599

)

 

$

(77,270

)

 

$

(110,142

)

 

$

(273,020

)

Adjusted net loss

 

 

(26,660

)

 

 

(25,405

)

 

 

(107,156

)

 

 

(142,443

)

 

 

(457,601

)

 

 

 

 

 

 

 

 

 

 

 

Share Data:

 

 

 

 

 

 

 

 

 

 

Diluted weighted average shares of Class A and Class D common stock outstanding

 

 

326,288,272

 

 

 

175,962,804

 

 

 

168,617,732

 

 

 

174,906,063

 

 

 

156,030,350

 

Assumed pro forma conversion of weighted average Class C shares to Class A common stock (1)

 

 

 

 

 

147,171,089

 

 

 

150,278,656

 

 

 

147,789,060

 

 

 

163,541,101

 

Adjusted diluted weighted average shares outstanding

 

 

326,288,272

 

 

 

323,133,893

 

 

 

318,896,388

 

 

 

322,695,123

 

 

 

319,571,451

(1)

Reflects the assumed pro forma exchange and conversion of anti-dilutive Class C common shares. For the three months ended December 31, 2023, Class C common shares were dilutive and included in diluted weighted average shares of Class A common stock outstanding in the table above.

Reconciliation of Net Income (Loss) to Adjusted EBITDA (LBITDA)

($ in thousands)

(Unaudited)

 

Three Months Ended

 

Year Ended

 

Dec 31,

2023

 

Sep 30,

2023

 

Dec 31,

2022

 

Dec 31,

2023

 

Dec 31,

2022

Net loss

 

$

(59,771

)

 

$

(34,262

)

 

$

(157,762

)

 

$

(235,512

)

 

$

(610,385

)

Interest expense - non-funding debt (1)

 

 

45,484

 

 

 

42,504

 

 

 

40,390

 

 

 

174,103

 

 

 

124,060

 

Income tax benefit

 

 

(14,174

)

 

 

(5,205

)

 

 

(16,318

)

 

 

(42,796

)

 

 

(79,592

)

Depreciation and amortization

 

 

9,922

 

 

 

10,592

 

 

 

10,085

 

 

 

41,261

 

 

 

42,195

 

Change in fair value of servicing rights, net of

hedging gains and losses(2)

 

 

22,824

 

 

 

702

 

 

 

18,846

 

 

 

45,692

 

 

 

(39,755

)

Stock-based compensation expense

 

 

6,375

 

 

 

3,940

 

 

 

8,789

 

 

 

21,993

 

 

 

20,583

 

Restructuring charges

 

 

3,517

 

 

 

2,004

 

 

 

5,178

 

 

 

11,811

 

 

 

25,126

 

Loss on disposal of fixed assets

 

 

325

 

 

 

93

 

 

 

1,568

 

 

 

1,430

 

 

 

12,594

 

Goodwill impairment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

40,736

 

Other impairment (recovery)

 

 

455

 

 

 

129

 

 

 

2,388

 

 

 

925

 

 

 

17,500

 

Adjusted EBITDA (LBITDA)

 

$

14,957

 

 

$

20,497

 

 

$

(86,836

)

 

$

18,907

 

 

$

(446,938

)

 

 

 

 

 

 

 

 

 

 

 

    (1) 

Represents other interest expense, which includes gain 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.

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, operations and financial performance. You can identify these statements by the use of words such as "outlook," "potential," "continue," "may," "seek," "approximately," "predict," "believe," "expect," "plan," "intend," "estimate," “project,” or "anticipate" and similar expressions or the negative versions of these words or comparable words, as well as future or conditional verbs such as "will," "should," "would" and "could." 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 incident, 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; 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, 2022 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

Contacts

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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