[Cautionary Statement Regarding Forward-Looking Statements](index=3&type=section&id=CAUTIONARY%20STATEMENT%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section highlights that the report contains forward-looking statements based on current expectations, estimates, and projections, which are inherently uncertain and subject to risks. Actual results may differ materially from those expressed or implied - The report contains forward-looking statements that reflect current views on future events and financial performance, identified by words like 'may,' 'should,' 'expect,' and 'anticipate'[6](index=6&type=chunk) - These statements are not historical facts and are based on current expectations, estimates, and projections about the industry, management's beliefs, and assumptions, many of which are inherently uncertain and beyond the Company's control[6](index=6&type=chunk) - Actual results, events, or circumstances could differ materially from those expressed or implied by the forward-looking statements due to various risks, assumptions, and uncertainties[6](index=6&type=chunk) [Important Factors Affecting Results](index=3&type=section&id=Important%20Factors%20Affecting%20Results) The Company identifies numerous factors that could cause actual results to differ materially from forward-looking statements, including disruptions in the secondary home loan market, macroeconomic conditions, interest rate changes, reliance on government-sponsored entities, and operational risks like cybersecurity breaches and regulatory compliance - Key risks include disruptions in the secondary home loan market or ability to sell loans, and adverse effects from macroeconomic and U.S. residential real estate market conditions[7](index=7&type=chunk) - Dependence on U.S. government-sponsored entities and agencies, changes in prevailing interest rates or U.S. monetary policies, and the termination or reduction of warehouse lines of credit are significant financial risks[7](index=7&type=chunk) - Operational risks encompass maintaining technology infrastructure, competition, referral relationships, servicing advances, fair value asset inaccuracies, adapting to technological changes, client adverse events, geographic concentration, cybersecurity breaches, and the need for additional capital[7](index=7&type=chunk)[8](index=8&type=chunk) [Part I—Financial Information](index=6&type=section&id=Part%20I%E2%80%94FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for Guild Holdings Company, including the balance sheets, statements of operations, changes in stockholders' equity, and cash flows, along with detailed notes explaining business operations, accounting policies, fair value measurements, and specific financial accounts [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The Condensed Consolidated Balance Sheets show a decrease in total assets and liabilities from December 31, 2024, to March 31, 2025, with a corresponding decrease in total stockholders' equity Condensed Consolidated Balance Sheets | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------------- | :----------------------------- | :------------------------------ | | Total assets | $4,549,729 | $4,768,303 | | Total liabilities | $3,349,484 | $3,514,293 | | Total stockholders' equity | $1,200,245 | $1,254,010 | - Mortgage loans held for sale decreased from **$1.52 billion** at December 31, 2024, to **$1.36 billion** at March 31, 2025[13](index=13&type=chunk) - Warehouse lines of credit, net, decreased from **$1.41 billion** at December 31, 2024, to **$1.22 billion** at March 31, 2025[13](index=13&type=chunk) [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended March 31, 2025, Guild Holdings Company reported a net loss of $23.9 million, a significant decline from the net income of $28.4 million in the same period of 2024, primarily due to a negative valuation adjustment of mortgage servicing rights Condensed Consolidated Statements of Operations | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Net revenue | $198,486 | $231,782 | | Total expenses | $230,110 | $193,239 | | Net (loss) income attributable to Guild | $(23,897) | $28,498 | | Basic (Loss) earnings per share | $(0.39) | $0.47 | | Diluted (Loss) earnings per share | $(0.39) | $0.46 | - Valuation adjustment of mortgage servicing rights shifted from a gain of **$20.78 million** in Q1 2024 to a loss of **$(69.94) million** in Q1 2025, significantly impacting net revenue[14](index=14&type=chunk) - Loan origination fees and gain on sale of loans, net, increased by **38.2%** from **$134.06 million** in Q1 2024 to **$185.21 million** in Q1 2025[14](index=14&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%20Equity) The statements show a decrease in total stockholders' equity from $1,254,010 thousand at December 31, 2024, to $1,200,245 thousand at March 31, 2025, primarily due to a net loss and cash dividends declared Condensed Consolidated Statements of Changes in Stockholders' Equity | Metric | December 31, 2024 (in thousands) | March 31, 2025 (in thousands) | | :-------------------------------- | :----------------------------- | :---------------------------- | | Total Stockholders' Equity | $1,254,010 | $1,200,245 | | Net (loss) income | $(23,897) | $(23,897) | | Cash dividends declared | $(30,952) | $(30,952) | | Repurchase of Class A common stock | $(456) | $(456) | - The Company declared and paid **$30.95 million** in cash dividends during the three months ended March 31, 2025[15](index=15&type=chunk) - Repurchased and retired **35,216 shares** of Class A common stock for **$0.46 million** during the three months ended March 31, 2025[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the three months ended March 31, 2025, the Company generated significant net cash from operating activities, a notable improvement from a net cash outflow in the prior year, while cash used in investing activities decreased and financing activities resulted in a net cash outflow Condensed Consolidated Statements of Cash Flows | Cash Flow Activity | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Net cash provided by (used in) operating activities | $180,781 | $(261,443) | | Net cash used in investing activities | $(30,904) | $(40,942) | | Net cash (used in) provided by financing activities | $(154,593) | $276,806 | | Decrease in cash, cash equivalents and restricted cash | $(4,716) | $(25,579) | - The shift to net cash provided by operating activities in Q1 2025 was primarily due to higher proceeds on sale of and payments from mortgage loans held for sale (**$5.02 billion**) compared to originations and purchases (**$4.70 billion**)[16](index=16&type=chunk) - Cash used in financing activities in Q1 2025 was largely influenced by repayments on warehouse lines of credit exceeding borrowings, and **$30.95 million** in dividends paid[16](index=16&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of Guild Holdings Company's business, accounting policies, fair value measurements, and specific financial accounts, offering context and breakdowns for the condensed consolidated financial statements [NOTE 1—Business, Basis of Presentation, and Significant Accounting Policies](index=11&type=section&id=NOTE%201%E2%80%94BUSINESS,%20BASIS%20OF%20PRESENTATION,%20AND%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Guild Holdings Company originates, sells, and services residential mortgage loans across 49 states and D.C., operating in two segments: origination and servicing. The financial statements are prepared under GAAP, reflecting normal recurring adjustments, and include consolidated subsidiaries - Guild Holdings Company operates in two reportable segments: origination and servicing, with approximately **430 branches** licensed in **49 states** and D.C[19](index=19&type=chunk) - The Company is certified with HUD and VA, and is an approved issuer/seller/servicer with Ginnie Mae, Fannie Mae, Freddie Mac, and USDA[20](index=20&type=chunk) - Escrow and fiduciary funds, excluded from the balance sheets, totaled **$976.8 million** at March 31, 2025, up from **$788.6 million** at December 31, 2024[23](index=23&type=chunk) [NOTE 2—Fair Value Measurements](index=12&type=section&id=NOTE%202%E2%80%94FAIR%20VALUE%20MEASUREMENTS) This note details the Company's fair value measurements, categorizing assets and liabilities into a three-level hierarchy based on input observability. Mortgage loans held for sale are Level Two, while reverse mortgage loans, MSRs, IRLCs, notes receivable, HMBS-related borrowings, and contingent liabilities are primarily Level Three due to significant unobservable inputs - Fair value measurements are categorized into Level One (quoted prices in active markets), Level Two (observable inputs other than quoted prices), and Level Three (unobservable inputs reflecting management's assumptions)[26](index=26&type=chunk)[30](index=30&type=chunk) Assets and Liabilities Measured at Fair Value (March 31, 2025) | (in thousands) | Level 1 | Level 2 | Level 3 | Total | | :------------------------------------------ | :------ | :-------- | :-------- | :-------- | | **Assets:** | | | | | | Mortgage loans held for sale | $— | $1,358,920 | $— | $1,358,920 | | Reverse mortgage loans held for investment | $— | $— | $482,151 | $482,151 | | Mortgage servicing rights | $— | $— | $1,312,377 | $1,312,377 | | Derivative assets (IRLCs) | $— | $— | $23,092 | $23,092 | | Notes receivable | $— | $— | $12,077 | $12,077 | | **Liabilities:** | | | | | | HMBS-related borrowings | $— | $— | $461,002 | $461,002 | | Derivative liabilities (Forward delivery commitments) | $— | $10,460 | $— | $10,460 | | Contingent liabilities due to acquisitions | $— | $— | $29,733 | $29,733 | - The fair value of Interest Rate Lock Commitments (IRLCs) increased from **$7.96 million** at December 31, 2024, to **$23.09 million** at March 31, 2025, primarily due to net transfers and revaluation gains[43](index=43&type=chunk) [NOTE 3—Advances, Net](index=17&type=section&id=NOTE%203%E2%80%94ADVANCES,%20NET) Advances, net, decreased from $85.5 million at December 31, 2024, to $65.1 million at March 31, 2025, primarily driven by a reduction in trust advances. The foreclosure loss reserve increased due to a higher provision for foreclosure losses NOTE 3—Advances, Net | (in thousands) | March 31, 2025 | December 31, 2024 | | :-------------------- | :------------- | :---------------- | | Trust advances | $46,576 | $65,048 | | Foreclosure advances | $25,500 | $25,761 | | Foreclosure loss reserve | $(6,931) | $(5,286) | | Total advances, net | $65,145 | $85,523 | Provision for Foreclosure Losses | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Balance — beginning of period | $5,286 | $5,694 | | Provision for foreclosure losses | $2,378 | $392 | | Realized losses, net | $(733) | $(260) | | Balance — end of period | $6,931 | $5,826 | [NOTE 4—Derivative Financial Instruments](index=17&type=section&id=NOTE%204%E2%80%94DERIVATIVE%20FINANCIAL%20INSTRUMENTS) The Company uses derivative instruments, primarily forward commitments, to hedge interest rate risk, with changes in fair value recognized in current period earnings. For the three months ended March 31, 2025, unrealized hedging losses were $5.97 million, a significant shift from gains in the prior year - Unrealized hedging losses were **$5.97 million** for the three months ended March 31, 2025, compared to gains of **$25.07 million** for the same period in 2024[52](index=52&type=chunk) Notional and Fair Value of Derivative Instruments (March 31, 2025) | (in thousands) | Notional Value | Derivative Asset | Derivative Liability | | :------------------------------------------ | :------------- | :--------------- | :------------------- | | IRLCs | $1,861,654 | $23,092 | $— | | Forward delivery commitments and best efforts sales commitments | $2,611,427 | $— | $10,460 | - The weighted average loan funding probability ('pull-through') for IRLCs increased to **89.8%** at March 31, 2025, from **88.7%** at December 31, 2024[54](index=54&type=chunk) [NOTE 5—Mortgage Servicing Rights](index=19&type=section&id=NOTE%205%E2%80%94MORTGAGE%20SERVICING%20RIGHTS) Mortgage Servicing Rights (MSRs) decreased in fair value to $1,312.4 million at March 31, 2025, from $1,343.8 million at the beginning of the period, primarily due to a $55.0 million negative valuation adjustment from changes in model inputs and assumptions. The UPB of mortgage loans serviced for others increased to $94.0 billion MSR Activity (Three Months Ended March 31, 2025 vs. 2024) | (in thousands) | 2025 | 2024 | | :------------------------------------------ | :----- | :----- | | Balance — beginning of period | $1,343,829 | $1,161,357 | | MSRs originated | $38,484 | $34,234 | | Changes in fair value: | | | | Due to collection/realization of cash flows | $(14,916) | $(12,119) | | Due to changes in valuation model inputs or assumptions | $(55,020) | $32,897 | | Balance — end of period | $1,312,377 | $1,216,483 | - The weighted average prepayment rate for MSRs increased to **8.6%** at March 31, 2025, from **8.2%** at December 31, 2024, and **8.0%** at March 31, 2024[56](index=56&type=chunk)[158](index=158&type=chunk) - The UPB of mortgage loans serviced for others increased to **$94.0 billion** at March 31, 2025, from **$92.9 billion** at December 31, 2024[57](index=57&type=chunk) [NOTE 6—Mortgage Loans Held for Sale](index=20&type=section&id=NOTE%206%E2%80%94MORTGAGE%20LOANS%20HELD%20FOR%20SALE) Mortgage loans held for sale (MLHS) decreased to $1,358.9 million at March 31, 2025, from $1,523.4 million at the beginning of the period, reflecting higher proceeds from sales compared to originations and purchases MLHS Activity (Three Months Ended March 31, 2025 vs. 2024) | (in thousands) | 2025 | 2024 | | :------------------------------------------ | :----------- | :----------- | | Balance — beginning of period | $1,523,447 | $901,227 | | Origination and purchase of MLHS | $4,700,821 | $3,605,155 | | Proceeds on sale of and payments from MLHS | $(5,017,499) | $(3,454,907) | | Gain on sale of MLHS excluding fair value of other financial instruments, net | $143,204 | $81,092 | | Valuation adjustment of MLHS | $8,947 | $(6,408) | | Balance — end of period | $1,358,920 | $1,126,159 | - Origination and purchase of MLHS increased to **$4.70 billion** in Q1 2025 from **$3.61 billion** in Q1 2024[61](index=61&type=chunk) - Proceeds on sale of and payments from MLHS increased to **$5.02 billion** in Q1 2025 from **$3.45 billion** in Q1 2024[61](index=61&type=chunk) [NOTE 7—Reverse Mortgage Loans Held for Investment and HMBS-related Borrowings](index=20&type=section&id=NOTE%207%E2%80%94REVERSE%20MORTGAGE%20LOANS%20HELD%20FOR%20INVESTMENT%20AND%20HMBS-RELATED%20BORROWINGS) Reverse mortgage loans held for investment increased to $482.2 million at March 31, 2025, from $451.7 million at the beginning of the period, while HMBS-related borrowings also increased. The Company recognized a gain of $2.9 million from its reverse mortgage portfolio in Q1 2025 Reverse Mortgage Loans Held for Investment and HMBS-related Borrowings (March 31, 2025) | (in thousands) | Reverse Mortgage Loans Held for Investment | HMBS-Related Borrowings | | :------------------------------------------ | :----------------------------------------- | :------------------------ | | Balance — beginning of period | $451,704 | $(425,979) | | Originations and purchases | $30,214 | $— | | Securitization of HECM loans and tails | $— | $(37,651) | | Repayments (principal payments received) | $(9,259) | $9,205 | | Change in fair value recognized in earnings | $9,492 | $(6,577) | | Balance — end of period | $482,151 | $(461,002) | Gains on Reverse Mortgage Loans and HMBS-related Borrowings (Three Months Ended March 31, 2025 vs. 2024) | (in thousands) | 2025 | 2024 | | :------------------------------------------ | :----- | :----- | | Gain on new originations | $1,807 | $1,284 | | Gain on tail securitizations | $501 | $322 | | Net interest income | $24 | $23 | | Change in fair value | $583 | $1,601 | | Fair value gain recognized in earnings | $2,915 | $3,230 | - The weighted average life in years for reverse mortgage loans held for investment was **6.6 years** at March 31, 2025, with a discount rate of **12.0%** and a conditional prepayment rate of **7.9%**[63](index=63&type=chunk) [NOTE 8—Goodwill and Intangible Assets, Net](index=22&type=section&id=NOTE%208%E2%80%94GOODWILL%20AND%20INTANGIBLE%20ASSETS,%20NET) Goodwill remained stable at $198.7 million, while intangible assets, net, decreased to $25.0 million at March 31, 2025, from $27.3 million at December 31, 2024, due to amortization NOTE 8—Goodwill and Intangible Assets, Net | (in thousands) | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Goodwill | $198,724 | $198,724 | | Intangible assets, net | $25,041 | $27,270 | | Goodwill and intangible assets, net | $223,765 | $225,994 | - Amortization expense related to intangible assets was **$2.2 million** for the three months ended March 31, 2025 and 2024[67](index=67&type=chunk) [NOTE 9—Warehouse Lines of Credit, Net](index=22&type=section&id=NOTE%209%E2%80%94WAREHOUSE%20LINES%20OF%20CREDIT,%20NET) Warehouse lines of credit, net, decreased to $1,224.1 million at March 31, 2025, from $1,414.6 million at December 31, 2024. The weighted average interest rate decreased to 5.9% from 6.7%. The Company was in compliance with all debt covenants Warehouse Lines of Credit, Net (March 31, 2025 vs. December 31, 2024) | (in thousands) | March 31, 2025 | December 31, 2024 | | :-------------------------- | :------------- | :---------------- | | Outstanding Balance | $1,226,643 | $1,417,453 | | Debt issuance costs | $(2,516) | $(2,890) | | Warehouse lines of credit, net | $1,224,127 | $1,414,563 | - The weighted average interest rate for warehouse lines of credit decreased from **6.7%** at December 31, 2024, to **5.9%** at March 31, 2025[71](index=71&type=chunk) - The Company was in compliance with all debt covenants for its warehouse lines of credit at March 31, 2025, and December 31, 2024[72](index=72&type=chunk) [NOTE 10—Notes Payable](index=23&type=section&id=NOTE%2010%E2%80%94NOTES%20PAYABLE) Notes payable increased to $340.0 million at March 31, 2025, from $300.0 million at December 31, 2024, across three revolving notes collateralized by MSRs. The weighted average interest rate decreased to 7.5% from 8.3% - Outstanding borrowings on notes payable increased to **$340.0 million** at March 31, 2025, from **$300.0 million** at December 31, 2024[13](index=13&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk)[78](index=78&type=chunk) - The aggregate facility size of notes payable facilities totaled **$750.0 million** at March 31, 2025, with **$195.0 million** of borrowing capacity available[218](index=218&type=chunk) - The weighted average interest rate for notes payable decreased from **8.3%** at December 31, 2024, to **7.5%** at March 31, 2025[224](index=224&type=chunk) [NOTE 11—Stockholders' Equity](index=24&type=section&id=NOTE%2011%E2%80%94STOCKHOLDERS%20EQUITY) The Company declared $31.0 million in cash dividends and repurchased 35,216 shares of Class A common stock for $0.5 million during the three months ended March 31, 2025. The share repurchase program was extended to May 5, 2026, with $9.5 million remaining available - The Company declared and paid **$31.0 million** in dividends during the three months ended March 31, 2025[79](index=79&type=chunk) - **35,216 shares** of Class A common stock were repurchased and retired for **$0.5 million** at an average price of **$12.94 per share** during Q1 2025[81](index=81&type=chunk) - The share repurchase program was extended to May 5, 2026, with **$9.5 million** remaining available for repurchase as of March 31, 2025[81](index=81&type=chunk) [NOTE 12—Earnings (Loss) Per Share](index=24&type=section&id=NOTE%2012%E2%80%94EARNINGS%20(LOSS)%20PER%20SHARE) Basic and diluted loss per share for Q1 2025 was $(0.39), a decrease from earnings per share of $0.47 (basic) and $0.46 (diluted) in Q1 2024, reflecting the net loss attributable to Guild NOTE 12—Earnings (Loss) Per Share | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net (loss) income attributable to Guild | $(23,897) | $28,498 | | Weighted average shares outstanding—Basic | 61,909 | 61,109 | | Weighted average shares outstanding—Diluted | 61,909 | 62,157 | | (Loss) earnings per share—Basic | $(0.39) | $0.47 | | (Loss) earnings per share—Diluted | $(0.39) | $0.46 | - Approximately **0.5 million** potential shares of Class A common stock related to unvested RSUs were excluded from diluted loss per share calculation in Q1 2025 due to being anti-dilutive[84](index=84&type=chunk) [NOTE 13—Stock-Based Compensation](index=25&type=section&id=NOTE%2013%E2%80%94STOCK-BASED%20COMPENSATION) Stock-based compensation expense was $1.6 million for the three months ended March 31, 2025, a decrease from $2.1 million in the prior year. Unrecognized compensation costs totaled $6.8 million, expected to be recognized over 1.3 years - Compensation costs recognized for restricted stock grants were approximately **$1.6 million** for Q1 2025, down from **$2.1 million** for Q1 2024[85](index=85&type=chunk) - As of March 31, 2025, there was approximately **$6.8 million** of unrecognized compensation costs related to unvested RSUs, with a weighted average recognition period of **1.3 years**[85](index=85&type=chunk) [NOTE 14—Commitments and Contingencies](index=25&type=section&id=NOTE%2014%E2%80%94COMMITMENTS%20AND%20CONTINGENCIES) The Company's investor reserves for loan repurchases increased to $21.9 million at March 31, 2025. Total commitments to originate forward mortgage loans, adjusted for pull-through, were $1.7 billion, and derivative commitments were $2.6 billion NOTE 14—Commitments and Contingencies | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Balance — beginning of period | $23,362 | $19,973 | | Provision for investor reserves | $5,095 | $520 | | Realized losses, net | $(6,508) | $(2,215) | | Balance — end of period | $21,949 | $18,278 | - Total commitments to originate forward mortgage loans, adjusted for pull-through, were approximately **$1.7 billion** at March 31, 2025, up from **$1.0 billion** at December 31, 2024[236](index=236&type=chunk) - Total commitments related to derivative instruments (forward loan sales, mandatory delivery, options, futures) were approximately **$2.6 billion** at March 31, 2025, compared to **$2.1 billion** at December 31, 2024[88](index=88&type=chunk) [NOTE 15—Regulatory Capital and Liquidity Requirements](index=25&type=section&id=NOTE%2015%E2%80%94REGULATORY%20CAPITAL%20AND%20LIQUIDITY%20REQUIREMENTS) Guild Holdings Company is subject to minimum net worth and capital requirements from secondary market investors and state regulators. As of March 31, 2025, the Company was in compliance with the most restrictive requirement of maintaining a minimum adjusted net worth of $282.8 million - The Company must maintain a minimum adjusted net worth of **$282.8 million** as of March 31, 2025, and was in compliance with this requirement[93](index=93&type=chunk) - Failure to meet these requirements could lead to sanctions, suspension, or termination of selling and servicing agreements, impacting the Company's ability to originate, securitize, or service mortgage loans[91](index=91&type=chunk) [NOTE 16—Segments](index=26&type=section&id=NOTE%2016%E2%80%94SEGMENTS) Guild Holdings Company operates in two reportable segments: Origination and Servicing. The Origination segment focuses on loan origination, acquisition, and sale, while the Servicing segment manages the servicing portfolio, providing cash flow and driving client retention. Net income is the primary measure for assessing segment performance - The Company has two reportable segments: Origination and Servicing, which are considered intricately related and interdependent[94](index=94&type=chunk)[191](index=191&type=chunk) - The Origination segment is responsible for loan origination, acquisition, and sale activities, while the Servicing segment handles loan servicing, including collections, impound accounts, and loss mitigation[95](index=95&type=chunk)[96](index=96&type=chunk) - The Chief Operating Decision Maker (CODM) uses net income for both segments to assess performance and allocate resources; assets and certain corporate expenses are not allocated to segments[97](index=97&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Guild Holdings Company's financial condition and operating results, highlighting key financial information, market trends, performance indicators, and a detailed analysis of revenue, expenses, segment performance, and liquidity for the periods presented [Executive Summary](index=29&type=section&id=Executive%20Summary) Guild Holdings Company reported a net loss of $23.9 million for Q1 2025, a decrease from net income in prior periods, despite an increase in mortgage loan originations to $5.2 billion. The servicing portfolio grew to $94.0 billion UPB, and adjusted net income was $21.6 million - Guild originated **$5.2 billion** of mortgage loans in Q1 2025, an increase from **$3.9 billion** in Q1 2024, but a decrease from **$6.7 billion** in Q4 2024[105](index=105&type=chunk) - Purchase originations accounted for **87.6%** of total originations in Q1 2025, higher than the MBA's forecast of **70.8%** for the industry[105](index=105&type=chunk) Key Financial Highlights (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :-------------------------------- | :------------- | :---------------- | :------------- | | Net (loss) income (in millions) | $(23.9) | $97.9 | $28.5 | | Diluted (loss) earnings per share | $(0.39) | $1.57 | $0.46 | | Adjusted net income (in millions) | $21.6 | $19.7 | $8.0 | | Adjusted diluted earnings per share | $0.35 | $0.32 | $0.13 | | Adjusted EBITDA (in millions) | $36.4 | $30.9 | $16.0 | | Servicing portfolio UPB (in billions) | $94.0 | $93.0 | $86.3 | [Market and Economic Overview](index=29&type=section&id=Market%20and%20Economic%20Overview) The FOMC's rate cuts in late 2024 led to elevated market expectations and high 10-year Treasury yields. The MBA forecasts a 16.7% increase in total origination volume for 2025, with Guild outpacing the market in Q1 2025. MSR values could decrease if rates decline, and market challenges have led to lower gain on sale margins - The Federal Open Market Committee (FOMC) initiated multiple rate cuts starting September 2024, with the target range at **4.25% to 4.5%** by December 2024[105](index=105&type=chunk)[106](index=106&type=chunk) - The MBA forecasts a **16.7% increase** in total industry origination volume to **$2.1 trillion** in 2025, with Guild's Q1 2025 originations increasing by **35.1%**, outpacing the market's **1.9%** forecast[108](index=108&type=chunk) - Guild recorded a loss of **$69.9 million** for changes in the fair value of MSRs in Q1 2025, compared to a gain of **$20.8 million** in Q1 2024, reflecting market volatility[107](index=107&type=chunk) [Key Performance Indicators](index=30&type=section&id=Key%20Performance%20Indicators) Guild's origination volume decreased by 22.9% QoQ but increased by 35.1% YoY in Q1 2025, with purchase originations dominating. The servicing portfolio's UPB grew by 1.1% QoQ and 8.9% YoY, while the overall recapture rate decreased QoQ but increased YoY Origination Data (QoQ Comparison) | Metric | March 31, 2025 | December 31, 2024 | % Change | | :------------------------------------------ | :------------- | :---------------- | :--------- | | Total originations (in thousands) | $5,204,565 | $6,746,440 | (22.9)% | | Total originations (units) | 15.3 | 19.6 | (21.9)% | | Gain on sale margin (bps) | 376 | 317 | 18.6% | | Purchase origination % | 87.6% | 82.3% | 6.4% | | Refinance recapture rate | 30.9% | 53.3% | (42.0)% | | Overall recapture rate | 28.7% | 42.3% | (32.2)% | Origination Data (YoY Comparison) | Metric | March 31, 2025 | March 31, 2024 | % Change | | :------------------------------------------ | :------------- | :------------- | :--------- | | Total originations (in thousands) | $5,204,565 | $3,852,539 | 35.1% | | Total originations (units) | 15.3 | 11.9 | 28.6% | | Gain on sale margin (bps) | 376 | 364 | 3.3% | | Purchase origination % | 87.6% | 90.8% | (3.5)% | | Refinance recapture rate | 30.9% | 25.9% | 19.3% | | Overall recapture rate | 28.7% | 25.6% | 12.1% | Servicing Data (QoQ & YoY Comparison) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | % Change (QoQ) | % Change (YoY) | | :------------------------------------------ | :------------- | :---------------- | :------------- | :------------- | :------------- | | UPB of servicing portfolio (period end, in thousands) | $94,005,693 | $92,998,862 | $86,319,074 | 1.1% | 8.9% | | Loans serviced (period end, in thousands) | 373 | 370 | 349 | 0.8% | 6.9% | | Weighted average prepayment speed | 8.6% | 8.2% | 8.0% | 4.9% | 7.5% | | Loan delinquency rate 60-plus days (period end) | 1.8% | 2.0% | 1.6% | (10.0)% | 12.5% | [Non-GAAP Financial Measures](index=33&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles non-GAAP financial measures such as adjusted net income, adjusted earnings per share, adjusted EBITDA, adjusted return on average equity, and tangible net book value per share. These metrics exclude non-cash and non-core operational items to provide a clearer view of the Company's underlying performance - Adjusted net income excludes changes in MSR fair value due to model inputs, changes in contingent liabilities and notes receivable, amortization of acquired intangibles, and stock-based compensation, adjusted for tax impact[125](index=125&type=chunk) Adjusted Net Income and EPS (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :------------------------------------------ | :------------- | :---------------- | :------------- | | Net (loss) income attributable to Guild (in thousands) | $(23,897) | $97,942 | $28,498 | | Adjusted net income (in thousands) | $21,620 | $19,734 | $8,042 | | (Loss) earnings per share—Diluted | $(0.39) | $1.57 | $0.46 | | Adjusted earnings per share—Diluted | $0.35 | $0.32 | $0.13 | Adjusted EBITDA (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :------------------------------------------ | :------------- | :---------------- | :------------- | | Net (loss) income (in thousands) | $(23,959) | $97,892 | $28,400 | | Adjusted EBITDA (in thousands) | $36,395 | $30,863 | $15,952 | Tangible Net Book Value Per Share | Metric | March 31, 2025 | December 31, 2024 | | :------------------------------------------ | :------------- | :---------------- | | Book value per share | $19.39 | $20.24 | | Tangible net book value per share | $15.77 | $16.59 | [Results of Operations](index=37&type=section&id=Results%20of%20Operations) Guild Holdings Company experienced a significant net loss in Q1 2025 compared to net income in prior periods, driven by a negative valuation adjustment of mortgage servicing rights. While loan origination fees and gain on sale increased YoY, overall net revenue declined due to MSR valuation and lower interest income QoQ. Expenses increased YoY, particularly salaries and foreclosure losses Consolidated Statements of Operations (QoQ Comparison) | ($ in thousands) | March 31, 2025 | December 31, 2024 | $ Change | % Change | | :------------------------------------------ | :------------- | :---------------- | :------- | :------- | | Net revenue | $198,486 | $372,987 | $(174,501) | (46.8)% | | Total expenses | $230,110 | $244,167 | $(14,057) | (5.8)% | | Net (loss) income attributable to Guild | $(23,897) | $97,942 | $(121,839) | (124.4)% | Consolidated Statements of Operations (YoY Comparison) | ($ in thousands) | March 31, 2025 | March 31, 2024 | $ Change | % Change | | :------------------------------------------ | :------------- | :------------- | :------- | :------- | | Net revenue | $198,486 | $231,782 | $(33,296) | (14.4)% | | Total expenses | $230,110 | $193,239 | $36,871 | 19.1% | | Net (loss) income attributable to Guild | $(23,897) | $28,498 | $(52,395) | (183.9)% | [Revenue](index=38&type=section&id=Revenue) Net revenue decreased significantly QoQ and YoY, primarily due to a large negative valuation adjustment of mortgage servicing rights. Loan origination fees and gain on sale of loans, net, increased YoY but decreased QoQ, while loan servicing and other fees showed modest growth Loan Origination Fees and Gain on Sale of Loans, Net (QoQ Comparison) | ($ in thousands) | March 31, 2025 | December 31, 2024 | $ Change | % Change | | :------------------------------------------ | :------------- | :---------------- | :------- | :------- | | Gain on sale of loans | $122,914 | $133,779 | $(10,865) | (8.1)% | | Fair value of originated MSRs | $38,484 | $62,078 | $(23,594) | (38.0)% | | Changes in fair value of MLHS and IRLCs | $26,795 | $(29,871) | $56,666 | 189.7% | | Changes in fair value of forward commitments | $(21,100) | $17,211 | $(38,311) | (222.6)% | | Total loan origination fees and gain on sale of loans, net | $185,213 | $203,272 | $(18,059) | (8.9)% | Loan Servicing and Other Fees (YoY Comparison) | ($ in thousands) | March 31, 2025 | March 31, 2024 | $ Change | % Change | | :------------------------------------------ | :------------- | :------------- | :------- | :------- | | Servicing fee income | $71,300 | $64,034 | $7,266 | 11.3% | | Late fees | $2,548 | $2,056 | $492 | 23.9% | | Total loan servicing and other fees | $72,751 | $65,788 | $6,963 | 10.6% | - The valuation adjustment of mortgage servicing rights shifted from a gain of **$20.78 million** in Q1 2024 to a loss of **$(69.94) million** in Q1 2025, a change of **$(90.71) million** or **(436.6)%**[158](index=158&type=chunk) [Expenses](index=42&type=section&id=Expenses) Total expenses decreased QoQ but increased YoY, primarily driven by higher salaries, incentive compensation, and benefits due to increased headcount and origination volume. Provision for foreclosure losses significantly increased YoY due to more loans in foreclosure Salaries, Incentive Compensation and Benefits (YoY Comparison) | ($ in thousands) | March 31, 2025 | March 31, 2024 | $ Change | % Change | | :------------------------------------------ | :------------- | :------------- | :------- | :------- | | Salaries | $86,217 | $73,990 | $12,227 | 16.5% | | Incentive compensation | $58,744 | $42,081 | $16,663 | 39.6% | | Benefits | $28,251 | $23,996 | $4,255 | 17.7% | | Total salaries, incentive compensation and benefits expense | $173,212 | $140,067 | $33,145 | 23.7% | - Provision for foreclosure losses increased from **$0.4 million** in Q1 2024 to **$2.4 million** in Q1 2025, a **506.6% increase**, due to a rise in loans in foreclosure[187](index=187&type=chunk) - General and administrative expenses remained relatively flat YoY, but advertising and promotions increased by **11.0%** YoY to support sales professionals and origination volumes[178](index=178&type=chunk)[179](index=179&type=chunk) [Income Taxes](index=44&type=section&id=Income%20Taxes) Income tax shifted from an expense of $30.9 million in Q4 2024 to a benefit of $7.7 million in Q1 2025, primarily driven by the change from net income to net loss. The effective tax rate for Q1 2025 was 24.2% - Income tax changed from an expense of **$30.9 million** in Q4 2024 to a benefit of **$7.7 million** in Q1 2025[189](index=189&type=chunk) - The effective tax rate for Q1 2025 was **24.2%**, compared to **24.0%** in Q4 2024 and **26.3%** in Q1 2024[189](index=189&type=chunk) [Segment Results](index=45&type=section&id=Segment%20Results) The Origination segment's net loss improved significantly YoY due to increased net revenue from higher origination volume, despite a QoQ decline. The Servicing segment experienced a substantial net loss QoQ and YoY, primarily driven by negative MSR valuation adjustments, although total revenue for servicing increased YoY [Origination](index=45&type=section&id=Origination) The Origination segment's net loss improved by $21.3 million YoY to $(2.9) million in Q1 2025, driven by a 38.2% increase in net revenue from higher origination volume. However, QoQ, net income declined due to decreased originations and volume-related expenses Origination Segment Results (QoQ Comparison) | ($ in thousands) | March 31, 2025 | December 31, 2024 | Change | % Change | | :------------------------------------------ | :------------- | :---------------- | :----- | :------- | | Total originations | $5,204,565 | $6,746,440 | $(1,541,875) | (22.9)% | | Net revenue | $190,601 | $209,705 | $(19,104) | (9.1)% | | Total expenses | $193,457 | $208,863 | $(15,406) | (7.4)% | | Net (loss) income allocated to origination | $(2,856) | $842 | $(3,698) | (439.2)% | Origination Segment Results (YoY Comparison) | ($ in thousands) | March 31, 2025 | March 31, 2024 | Change | % Change | | :------------------------------------------ | :------------- | :------------- | :----- | :------- | | Total originations | $5,204,565 | $3,852,539 | $1,352,026 | 35.1% | | Net revenue | $190,601 | $137,922 | $52,679 | 38.2% | | Total expenses | $193,457 | $162,079 | $31,378 | 19.4% | | Net loss allocated to origination | $(2,856) | $(24,157) | $21,301 | 88.2% | - Gain on sale margins for the Origination segment increased to **376 basis points** in Q1 2025 from **317 basis points** in Q4 2024 and **364 basis points** in Q1 2024, reflecting interest rate and market volatility[198](index=198&type=chunk)[201](index=201&type=chunk) [Servicing](index=47&type=section&id=Servicing) The Servicing segment reported a net loss of $(4.6) million in Q1 2025, a significant decrease from net income in prior periods, primarily due to a $(154.3) million QoQ and $(90.7) million YoY decrease in MSR valuation adjustments. Despite this, total revenue for the segment increased YoY, aligning with growth in the average UPB of the servicing portfolio Servicing Segment Results (QoQ Comparison) | ($ in thousands) | March 31, 2025 | December 31, 2024 | Change | % Change | | :------------------------------------------ | :------------- | :---------------- | :----- | :------- | | Average UPB of servicing portfolio | $93,502,278 | $92,242,013 | $1,260,265 | 1.4% | | Net revenue | $12,980 | $168,091 | $(155,111) | (92.3)% | | Total expenses | $17,545 | $15,729 | $1,816 | 11.5% | | Net (loss) income allocated to servicing | $(4,565) | $152,362 | $(156,927) | (103.0)% | Servicing Segment Results (YoY Comparison) | ($ in thousands) | March 31, 2025 | March 31, 2024 | Change | % Change | | :------------------------------------------ | :------------- | :------------- | :----- | :------- | | Average UPB of servicing portfolio | $93,502,278 | $85,676,487 | $7,825,791 | 9.1% | | Net revenue | $12,980 | $97,440 | $(84,460) | (86.7)% | | Total expenses | $17,545 | $13,506 | $4,039 | 29.9% | | Net (loss) income allocated to servicing | $(4,565) | $83,934 | $(88,499) | (105.4)% | - The provision for foreclosure losses in the Servicing segment increased by **$1.3 million** QoQ and **$2.0 million** YoY, reflecting an increase in expected losses[208](index=208&type=chunk)[209](index=209&type=chunk) [Liquidity, Capital Resources and Cash Flows](index=48&type=section&id=Liquidity,%20Capital%20Resources%20and%20Cash%20Flows) Guild Holdings Company's liquidity is primarily supported by cash flows from operations, warehouse lines of credit, and notes payable. The Company generated net cash from operating activities in Q1 2025, a reversal from the prior year, while financing activities resulted in a net cash outflow due to dividend payments and warehouse line repayments - Primary sources of liquidity include cash flows from operations (loan sales, origination fees, servicing income, interest income on MLHS), borrowings on warehouse lines of credit, and notes payable[212](index=212&type=chunk) - Primary uses of funds include origination of MLHS, payment of interest and operating expenses, servicing advances, repayments on warehouse lines and notes payable, acquisitions, share repurchases, and dividends[212](index=212&type=chunk)[221](index=221&type=chunk) Cash Flow Summary (Three Months Ended March 31) | ($ in thousands) | 2025 | 2024 | | :------------------------------------------ | :----- | :----- | | Net cash provided by (used in) operating activities | $180,781 | $(261,443) | | Net cash used in investing activities | $(30,904) | $(40,942) | | Net cash (used in) provided by financing activities | $(154,593) | $276,806 | | Decrease in cash, cash equivalents and restricted cash | $(4,716) | $(25,579) | [Debt Obligations](index=49&type=section&id=Debt%20Obligations) Guild utilizes $2.8 billion in warehouse lines of credit and $750.0 million in notes payable to fund loan originations and operations. As of March 31, 2025, outstanding balances were $1.2 billion for warehouse lines and $340.0 million for notes payable, with the Company in compliance with all debt covenants - As of March 31, 2025, total facility size under loan funding facilities was approximately **$2.8 billion**, with combined outstanding balances of approximately **$1.2 billion**[217](index=217&type=chunk) - The aggregate facility size of notes payable facilities totaled **$750.0 million**, with combined outstanding balances of **$340.0 million** and **$195.0 million** of available borrowing capacity[218](index=218&type=chunk) - The Company was in compliance with all operating and financial covenants for its loan funding facilities and notes payable as of March 31, 2025[223](index=223&type=chunk) [Secondary Market Investors](index=50&type=section&id=Secondary%20Market%20Investors) Secondary market investors impose operating and financial covenants on Guild, including minimum net worth, liquidity, and total liquid assets. The Company was in compliance with all these covenants as of March 31, 2025, and December 31, 2024 - Investors require maintenance of minimum net worth, liquidity, total liquid assets, adjusted net worth to total assets ratio, and fidelity bond/E&O coverage[226](index=226&type=chunk) - Breach of these covenants could lead to default and impact the ability to sell mortgage loans in the secondary market[226](index=226&type=chunk) - The Company was in compliance with all investor covenants as of March 31, 2025, and December 31, 2024[226](index=226&type=chunk) [Cash Flows](index=51&type=section&id=Cash%20Flows) Operating activities provided $180.8 million in cash in Q1 2025, a significant improvement from a cash outflow in Q1 2024, driven by higher loan sales than originations. Investing activities used less cash due to no acquisitions in Q1 2025, while financing activities used cash primarily for dividend payments and warehouse line repayments - Net cash provided by operating activities was **$180.8 million** in Q1 2025, compared to net cash used of **$(261.4) million** in Q1 2024, primarily due to a decline in loans held for sale[228](index=228&type=chunk)[229](index=229&type=chunk) - Net cash used in investing activities decreased to **$(30.9) million** in Q1 2025 from **$(40.9) million** in Q1 2024, mainly because there were no business acquisitions in the current quarter[228](index=228&type=chunk)[230](index=230&type=chunk) - Net cash used in financing activities was **$(154.6) million** in Q1 2025, a shift from **$276.8 million** provided in Q1 2024, largely due to **$31.0 million** in dividend payments and higher repayments on warehouse lines of credit[228](index=228&type=chunk)[233](index=233&type=chunk) [Share Repurchase Program](index=52&type=section&id=Share%20Repurchase%20Program) The Board of Directors extended the share repurchase program to May 5, 2026, with $9.5 million remaining available. In Q1 2025, the Company repurchased 35,216 shares of Class A common stock for $0.5 million at an average price of $12.94 per share - The share repurchase program was extended to May 5, 2026, with **$9.5 million** remaining available for repurchase as of March 31, 2025[235](index=235&type=chunk) - During Q1 2025, **35,216 shares** of Class A common stock were repurchased and retired for **$0.5 million** at an average price of **$12.94 per share**[235](index=235&type=chunk) [Interest Rate Lock Commitments](index=52&type=section&id=Interest%20Rate%20Lock%20Commitments) Total commitments to originate forward mortgage loans, adjusted for pull-through, increased to approximately $1.7 billion at March 31, 2025, from $1.0 billion at December 31, 2024. These commitments expose the Company to market risk if interest rates change - Total commitments to originate forward mortgage loans, adjusted for pull-through, were approximately **$1.7 billion** at March 31, 2025, compared to **$1.0 billion** at December 31, 2024[236](index=236&type=chunk) - IRLCs expose the Company to market risk from interest rate changes and credit loss if originated loans are not sold and customers default[236](index=236&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=52&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Guild Holdings Company is not required to provide specific quantitative and qualitative disclosures about market risk - The Company is exempt from providing quantitative and qualitative disclosures about market risk as it qualifies as a smaller reporting company[237](index=237&type=chunk) [Item 4. Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that Guild Holdings Company's disclosure controls and procedures were effective as of March 31, 2025. No material changes in internal control over financial reporting were identified during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of March 31, 2025[238](index=238&type=chunk) - No changes in internal control over financial reporting were identified during Q1 2025 that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[239](index=239&type=chunk) - Management believes that disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance, but not absolute assurance, of achieving their objectives[240](index=240&type=chunk) [Part II—Other Information](index=53&type=section&id=Part%20II%E2%80%94OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) Guild Holdings Company is involved in various lawsuits and regulatory proceedings in the ordinary course of business but does not expect any current matters to have a material adverse effect on its financial position or results of operations - The Company is routinely subject to various examinations and legal/regulatory proceedings in the normal course of business[242](index=242&type=chunk) - Management does not expect current legal or regulatory matters to have a material adverse effect on the Company's consolidated financial position or results of operations[242](index=242&type=chunk) [Item 1A. Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, emphasizing potential disruptions from significant changes in federal government size, structure, powers, and operations, as well as adverse impacts from macroeconomic policy shifts, such as trade restrictions, tariffs, and inflation, which could affect mortgage origination volumes and housing affordability - Significant changes in federal government priorities, operations, and regulatory frameworks, including at agencies like FHA, HUD, VA, and CFPB, could disrupt the regulatory environment and adversely impact business[244](index=244&type=chunk) - Discussions regarding the privatization of Fannie Mae and Freddie Mac pose a risk, as the majority of Guild's loan products are sold to these GSEs, and changes could materially and adversely affect the business[245](index=245&type=chunk) - Rapid shifts in macroeconomic policies, such as trade restrictions, tariffs, and increased inflation, could lead to higher mortgage rates, reduced refinancing, and decreased housing supply, negatively impacting mortgage origination volumes and overall business results[246](index=246&type=chunk)[247](index=247&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=54&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2025, Guild Holdings Company repurchased 35,216 shares of its Class A common stock for $0.5 million under its extended share repurchase program, with $9.5 million remaining available Class A Common Stock Repurchases (Three Months Ended March 31, 2025) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Approximate Dollar Value of Shares that May Yet be Purchased (in thousands) | | :-------------------------------- | :----------------------------- | :--------------------------- | :-------------------------------------------------------------------- | | January 1, 2025 to January 31, 2025 | 12,829 | $12.79 | $9,790 | | February 1, 2025 to February 28, 2025 | 9,336 | $12.55 | $9,673 | | March 1, 2025 to March 31, 2025 | 13,051 | $13.36 | $9,498 | | Total | 35,216 | $12.94 | | - The share repurchase program was extended to May 5, 2026, with **$9.5 million** remaining available for repurchase as of March 31, 2025[251](index=251&type=chunk) [Item 3. Defaults Upon Senior Securities](index=54&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities reported by Guild Holdings Company - No defaults upon senior securities were reported[252](index=252&type=chunk) [Item 4. Mine Safety Disclosures](index=54&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Guild Holdings Company - Mine Safety Disclosures are not applicable to the Company[253](index=253&type=chunk) [Item 5. Other Information](index=54&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the fiscal quarter ended March 31, 2025 - No directors or officers informed the Company of the adoption or termination of Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2025[254](index=254&type=chunk) [Item 6. Exhibits](index=55&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including organizational documents, incentive plans, compensation agreements, and certifications - The exhibit index includes the Amended and Restated Certificate of Incorporation and Bylaws, Registration Rights Agreement, and the 2020 Omnibus Incentive Plan[256](index=256&type=chunk) - Executive compensation agreements and various forms of Restricted Stock Unit Agreements are also listed as exhibits[256](index=256&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer, pursuant to Rule 13a-14(a) and 18 U.S.C. Section 1350, are filed herewith[256](index=256&type=chunk)[257](index=257&type=chunk) [Signatures](index=57&type=section&id=SIGNATURES) [Signatures](index=57&type=section&id=Signatures) The report is duly signed on behalf of Guild Holdings Company by Terry L. Schmidt, Chief Executive Officer, and Desiree A. Kramer, Chief Financial Officer, on May 8, 2025 - The report was signed by Terry L. Schmidt, Chief Executive Officer, and Desiree A. Kramer, Chief Financial Officer, on May 8, 2025[259](index=259&type=chunk)

Core Viewpoint - Guild Holdings Company (GHLD) reported quarterly earnings of $0.35 per share, significantly exceeding the Zacks Consensus Estimate of $0.17 per share, marking an earnings surprise of 105.88% [1][2] Financial Performance - The company posted revenues of $198.49 million for the quarter ended March 2025, which fell short of the Zacks Consensus Estimate by 7.08% and decreased from $231.78 million year-over-year [2] - Over the last four quarters, Guild has surpassed consensus EPS estimates two times and topped consensus revenue estimates twice [2] Stock Performance - Guild shares have declined approximately 12.1% since the beginning of the year, compared to a decline of 4.7% for the S&P 500 [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating expectations of outperforming the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.44 on revenues of $303.32 million, and for the current fiscal year, it is $1.60 on revenues of $1.2 billion [7] - The estimate revisions trend for Guild is currently favorable, which may influence future stock movements [6][5] Industry Context - The Financial - Miscellaneous Services industry, to which Guild belongs, is ranked in the bottom 43% of over 250 Zacks industries, suggesting potential challenges ahead [8] - The performance of Guild's stock may be affected by the overall outlook for the industry [8]

Financial Data and Key Metrics Changes - In Q1 2025, the company achieved total loan originations of $5.2 billion, a 35% increase year-over-year from $3.9 billion in Q1 2024 [4][13] - Adjusted EBITDA was reported at $36.4 million, with adjusted net income of $21.6 million, showcasing the effectiveness of the company's growth strategy [4][13] - The net loss attributable to the company was $24 million, compared to a net income of $28 million in the prior year [13][15] Business Line Data and Key Metrics Changes - The origination segment saw a net loss of $3 million, an improvement from a net loss of $24 million in the prior year [13][15] - The servicing portfolio grew to $94 billion, although it reported a net loss of $5 million due to a downward valuation adjustment of $70 million [15][16] - Gain on sale margin for funded originations was 376 basis points, up from 364 basis points in the prior year [14] Market Data and Key Metrics Changes - The company noted a significant increase in loan officer productivity, with Guild loan officers averaging 30% more productivity than the industry average [10][38] - The company is focusing on capturing market share, particularly in the purchase business, which remains a significant opportunity [8][32] Company Strategy and Development Direction - The company aims to leverage its balanced business model and brand strength to drive growth, focusing on market share gains, operational efficiencies, and new product development [7][8] - The strategy includes a continued emphasis on organic growth and opportunistic acquisitions, with a disciplined approach to increasing productivity [12][38] - The company is well-positioned to navigate market volatility and capitalize on opportunities as they arise [8][18] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the peak spring and summer home purchase market, highlighting strong early results [11][12] - The company anticipates continued market volatility but believes its business model is adaptable to various market conditions [8][18] - Management emphasized the importance of local presence and trust in customer relationships, particularly for first-time homebuyers [32] Other Important Information - The company repurchased approximately 35,000 shares at an average price of $12.94 per share during the first quarter [17] - A special cash dividend of $0.50 per share was declared and paid on the company's common stock [17] Q&A Session Summary Question: Amortization expense on MSR and modeling going forward - Management noted that prepayments were down quarter-over-quarter, impacting the amortization expense [21][22] Question: Impact of ROCCAT acquisition of Redfin and Mr. Cooper - Management stated that they are focused on engaging customers earlier in the process and emphasized the importance of local presence [30][32] Question: Thoughts on growth going forward, organic vs. acquisition - Management indicated that organic growth has been stronger than M&A in the first half of the year, but both avenues are being pursued [36][38] Question: Loan officer compensation rules and impact on margins - Management confirmed that there have been no changes to loan officer compensation and that they will comply with new regulations [42][43] Question: Home prices and tariffs effect on housing values - Management stated that the impact of tariffs on construction costs is still uncertain, but home values have remained stable in some markets [44][45]

Financial Data and Key Metrics Changes - In Q1 2025, the company achieved total loan originations of $5.2 billion, a 35% increase year-over-year from $3.9 billion in Q1 2024, but a decrease from $6.7 billion in Q4 2024 [12] - Net revenue for Q1 2025 was $198 million, down from $232 million in the prior year and $373 million in the previous quarter [12] - The company reported a net loss of $24 million in Q1 2025, compared to a net income of $28 million in Q1 2024 and a net income of $98 million in Q4 2024 [12] - Adjusted net income was $22 million, or $0.35 per diluted share, with adjusted EBITDA at $36 million [12] Business Line Data and Key Metrics Changes - The origination segment saw a net loss of $3 million in Q1 2025, an improvement from a net loss of $24 million in the prior year [12] - The gain on sale margin for Q1 2025 was 376 basis points, up from 364 basis points in Q1 2024 and 317 basis points in Q4 2024 [13] - The servicing portfolio grew to $94 billion, but the segment reported a net loss of $5 million compared to a net income of $84 million in the prior year [14] Market Data and Key Metrics Changes - The company has more than doubled its loan officer headcount since the end of 2020, contributing to its growth in originations [4] - The company is seeing strong early results in serving first-time homebuyers through educational events across major markets in the U.S. [10] Company Strategy and Development Direction - The company focuses on a balanced business model, emphasizing market share gains, operational efficiencies, and organic growth through recruiting and acquisitions [5][7] - The strategy includes leveraging a servicing book for stability and cash flow, and pursuing opportunistic acquisitions [5][6] - The company aims to capitalize on market volatility while maintaining a disciplined approach to growth [7] Management's Comments on Operating Environment and Future Outlook - Management anticipates continued market volatility but believes the company is well-positioned for success due to its durable business model [5][7] - The outlook for the peak spring and summer home purchase market is cautiously optimistic, with a focus on community-driven origination teams [10] - Management remains confident in the company's strategic direction despite market challenges [11] Other Important Information - As of March 31, cash and cash equivalents totaled $112 million, with unutilized loan funding capacity at $1.5 billion [15] - The company repurchased approximately 35,000 shares at an average price of $12.94 per share during Q1 2025 [16] - A special cash dividend of $0.50 per share was declared and paid during the quarter [16] Q&A Session Summary Question: Amortization expense on the MSR - The amortization expense was down sharply, attributed to lower prepayments and a service release percentage of 40% [19][21] Question: Impact of ROCCAT acquisition of Redfin and Mr. Cooper - The company is focused on engaging customers earlier in the process and believes its local presence and expertise remain strong [28][30] Question: Growth outlook for organic vs. acquisition - The company is seeing stronger organic growth compared to M&A in the first half of the year, with a strong brand presence aiding both strategies [33][35] Question: Loan officer compensation rules - The company has not changed its loan officer compensation and does not foresee significant impacts from regulatory changes [40][42] Question: Home prices and tariffs impact - The company is monitoring the effects of tariffs on construction costs and home values, but does not expect significant impacts on volume [43][44]

Financial Performance - Net revenue for Q1 2025 was $198.5 million, down from $373.0 million in Q4 2024 and $231.8 million in Q1 2024[4] - Net loss attributable to Guild was $23.9 million in Q1 2025, compared to net income of $97.9 million in Q4 2024 and $28.5 million in Q1 2024[4] - Adjusted net income for Q1 2025 was $21.6 million, up from $19.7 million in Q4 2024 and $8.0 million in Q1 2024[4] - Adjusted net income for the three months ended March 31, 2025, was a loss of $23.9 million, compared to a net income of $97.9 million for the previous quarter[32] - The net revenue for the three months ended March 31, 2025, was $198.5 million, a significant decrease from $373.0 million in the previous quarter[32] - The company reported a basic loss per share of $0.39 for the three months ended March 31, 2025, compared to earnings of $1.59 per share in the previous quarter[32] - Adjusted EBITDA for the three months ended March 31, 2025, was $36.4 million, an increase from $30.9 million in the previous quarter and $16.0 million in the same quarter last year[41] Originations and Loan Performance - Total originations for Q1 2025 were $5.2 billion, a 35% increase year-over-year from $3.9 billion in Q1 2024[3] - 88% of closed loan origination volume in Q1 2025 came from purchase business, exceeding the industry estimate of 71%[3] - Total originations for the three months ended March 31, 2025, were $5.2 billion, a decrease of 22.8% from $6.7 billion in the previous quarter[37] - The total loans sold amounted to $5.2 billion for the three months ended March 31, 2025, down from $6.7 billion in the previous quarter[37] - The gain on sale margin on originations was 376 basis points in Q1 2025, an increase from 317 basis points in Q4 2024[6] - The gain on sale margin increased to 376 basis points for the three months ended March 31, 2025, compared to 317 basis points in the previous quarter[37] - The company maintained a purchase origination percentage of 88% for the three months ended March 31, 2025, compared to 82% in the previous quarter[37] Balance Sheet and Equity - Cash and cash equivalents were $111.7 million as of March 31, 2025, with an unutilized loan funding capacity of $1.5 billion[13] - The total assets decreased to $4.55 billion as of March 31, 2025, from $4.77 billion as of December 31, 2024[30] - The total liabilities decreased to $3.35 billion as of March 31, 2025, from $3.51 billion as of December 31, 2024[30] - The total stockholders' equity as of March 31, 2025, was $1,200.2 million, a decrease from $1,254.0 million at the end of 2024[43] - The tangible common equity was $976.1 million, down from $1,027.5 million in the previous quarter[43] - The book value per share decreased to $19.39 from $20.24 in the previous quarter, while the tangible net book value per share was $15.77, down from $16.59[43] - The average stockholders' equity for Q1 2025 was $1,227.1 million, compared to $1,206.0 million in Q4 2024[42] Return Metrics - The return on average equity for Q1 2025 was -7.8%, down from 32.5% in Q4 2024, while the adjusted return on average equity improved to 7.0% from 6.5%[42] Share Repurchase and Fair Value Changes - The company repurchased 35,216 shares at an average price of $12.94 per share during Q1 2025[12] - The company reported a change in fair value of MSRs due to model inputs and assumptions of $55.0 million for Q1 2025, a significant change from -$107.4 million in the previous quarter[41]

Core Viewpoint - Guild Holdings Company (GHLD) is currently viewed as a better value opportunity compared to Moody's (MCO) based on various financial metrics and analyst outlooks [1]. Valuation Metrics - GHLD has a forward P/E ratio of 8.23, significantly lower than MCO's forward P/E of 32.19, indicating that GHLD may be undervalued [5]. - The PEG ratio for GHLD is 0.77, while MCO's PEG ratio stands at 2.58, suggesting that GHLD has a more favorable earnings growth outlook relative to its valuation [5]. - GHLD's P/B ratio is 0.65, contrasting sharply with MCO's P/B ratio of 20.51, further supporting the argument that GHLD is undervalued [6]. Analyst Outlook - GHLD holds a Zacks Rank of 2 (Buy), reflecting a positive earnings estimate revision trend, while MCO has a Zacks Rank of 3 (Hold), indicating a less favorable outlook [3]. - The solid earnings outlook for GHLD, combined with its favorable valuation metrics, positions it as the superior value option compared to MCO [6].

Core Viewpoint - Investors in the Financial - Miscellaneous Services sector should consider Guild Holdings Company (GHLD) and SoFi Technologies, Inc. (SOFI) for potential value opportunities [1] Valuation Metrics - GHLD has a Zacks Rank of 2 (Buy), indicating a more favorable earnings estimate revision activity compared to SOFI, which has a Zacks Rank of 3 (Hold) [3] - GHLD's forward P/E ratio is 8.19, significantly lower than SOFI's forward P/E of 41.84, suggesting GHLD may be undervalued [5] - GHLD's PEG ratio is 0.77, while SOFI's PEG ratio is 1.56, indicating GHLD's expected earnings growth is more attractive relative to its price [5] - GHLD has a P/B ratio of 0.65, compared to SOFI's P/B of 1.77, further supporting GHLD's valuation attractiveness [6] Investment Conclusion - GHLD exhibits stronger estimate revision activity and more appealing valuation metrics than SOFI, making it a more attractive option for value investors [7]

Company Overview - Guild Holdings Company (GHLD) shares increased by 5.2% to close at $14.43, with notable trading volume compared to typical sessions, and a total gain of 10.3% over the past four weeks [1] - The company has a nationwide retail origination presence across 49 states and the District of Columbia, with approximately 440 branch locations, which supports its growth [2] Business Model and Strategy - Guild operates a dual origination-servicing model that provides revenue stability across interest rate cycles and utilizes a proprietary technology platform to enhance operational efficiency and client experience [2] - The company leverages strong referral relationships from knowledgeable loan officers, with purchase originations making up 88.1% of total volume in 2024 [3] - Guild's scalable in-house servicing supports recurring revenues and client retention, while its acquisition strategy has expanded its market footprint and competitive positioning [3] Financial Performance and Expectations - The company is expected to report quarterly earnings of $0.20 per share, reflecting a year-over-year increase of 53.9%, while revenues are projected to be $218.42 million, down 5.8% from the previous year [4] - The consensus EPS estimate has been revised 5.7% lower over the last 30 days, indicating a negative trend in earnings estimate revisions, which typically does not lead to price appreciation [5] Industry Context - Guild belongs to the Zacks Financial - Miscellaneous Services industry, where another company, Core Scientific, Inc. (CORZ), has seen a decline of 27.5% over the past month [5]

Core Viewpoint - Guild Holdings Company (GHLD) is currently viewed as a better value investment compared to HA Sustainable Infrastructure Capital (HASI) based on earnings outlook and valuation metrics [3][7]. Valuation Metrics - GHLD has a forward P/E ratio of 8.04, while HASI has a forward P/E of 11.10 [5]. - GHLD's PEG ratio is 0.26, indicating a favorable growth outlook compared to HASI's PEG ratio of 0.99 [5]. - GHLD's P/B ratio stands at 0.66, significantly lower than HASI's P/B of 1.45, suggesting GHLD is undervalued relative to its book value [6]. Earnings Outlook - GHLD has shown a stronger improvement in its earnings outlook compared to HASI, contributing to its higher Zacks Rank of 2 (Buy) versus HASI's 3 (Hold) [3][7]. Value Grades - GHLD has a Value grade of B, while HASI has a Value grade of D, reflecting GHLD's superior valuation metrics [6].

Market Dependence and Economic Factors - The company is highly dependent on the secondary home loan market, with a significant portion of revenues and net earnings derived from selling originated mortgages to GSEs and Ginnie Mae[81]. - Macroeconomic factors such as rising inflation, interest rates, and low housing inventory have adversely affected the company's origination volume and overall revenue[82][83]. - Changes in prevailing interest rates have negatively impacted the company's origination volume and profit margins, with increasing rates making refinancing less attractive[87]. - Adverse economic conditions affecting clients, such as job loss or inflation, could lead to increased delinquencies and defaults, negatively impacting the company's financial condition[111]. - The geographic concentration of loan originations in the Northwest United States may expose the company to greater risks if that region experiences economic downturns[112]. Operational Risks and Challenges - Increased delinquencies could lead to higher servicing costs and decreased cash flow, impacting the estimated value of mortgage servicing rights (MSRs)[84]. - The company faces risks related to its relationships with government-sponsored entities (GSEs), including potential changes in organizational structure and pricing that could adversely affect its business[85][86]. - The company employs hedging strategies to mitigate interest rate risks, but these strategies are complex and not foolproof, exposing the company to potential credit and market risks[88]. - The company relies on warehouse lines of credit for funding mortgage loans, and any termination or reduction of these lines could materially affect its operations[91]. - The company is subject to operational risks including employee or customer fraud, documentation errors, and data processing failures, which could lead to significant financial losses and regulatory sanctions[124]. Competitive Landscape - The competitive landscape is intensifying, with significant competition from larger banks and financial technology companies, which could affect the company's market position[102]. - The company's ability to maintain long-term client relationships and adapt to technological advances will be crucial for its competitive success[103]. - The company faces competitive disadvantages due to its concentration primarily in the Northwest United States, which may hinder its ability to spread operating costs across a broader market[104]. - A significant portion of mortgage origination leads are sourced through established referral partners, and failure to maintain these relationships could significantly decrease origination volume[105]. Financial Performance and Capital Management - Net revenue for 2024 reached $1,049,711 thousand, a significant increase of 60.2% compared to $655,187 thousand in 2023[366]. - Net income attributable to Guild for 2024 was $97,131 thousand, a turnaround from a net loss of $39,009 thousand in 2023[366]. - Total assets increased to $4,768,303 thousand in 2024, up from $3,676,720 thousand in 2023, representing a growth of approximately 29.7%[364]. - The company declared cash dividends of $0.50 per share for both 2023 and 2024, totaling $30,702 thousand in 2024[367]. - The company’s ability to pay dividends is contingent on the financial results and cash flows of GMC, which may be restricted[159]. Regulatory and Compliance Risks - Compliance with a complex legal and regulatory framework is essential, as failure to comply could result in significant penalties and operational challenges[137]. - The company is subject to regulatory authority from the CFPB, which can impose penalties and require remediation for violations of consumer financial laws[138]. - The Financial Stability Oversight Council has recommended strengthening regulations for nonbank mortgage companies, which could affect the company's operating costs and competitiveness[141]. - The company faces potential liabilities under fair lending laws, including risks associated with "redlining" and "reverse redlining," which could lead to sanctions and reputational harm[142]. - The company is subject to stringent data privacy and security laws, which may increase compliance costs and legal risks[149]. Acquisitions and Investments - The company acquired Cherry Creek Mortgage, LLC in April 2023, expanding its reverse mortgage loan products[146]. - Acquisitions and investments may not yield anticipated benefits, and integration challenges could arise, impacting the company's financial results[98][99]. Asset Valuation and Financial Reporting - The fair value of a substantial portion of the company's assets is subject to estimates that may prove inaccurate, potentially leading to write-downs that could adversely affect earnings and financial condition[108]. - The company's estimates of the fair value of mortgage servicing rights (MSRs) are highly dependent on cash flow projections, which can fluctuate due to market conditions[109]. - The assessment of the fair value of MSRs involves significant subjective judgment and complex audit procedures[353]. - The Company recognizes mortgage servicing rights (MSRs) as assets and uses a valuation model to determine their fair value based on future cash flows[397]. Technology and Innovation - The mortgage industry is undergoing rapid technological changes, and the company's future success depends on its ability to adapt and develop new products and services[110]. - The Company is currently evaluating the impact of new accounting standards issued by the FASB on its financial statements[442]. Miscellaneous - Cybersecurity threats pose significant risks to the company's operations and client data, which could lead to reputational harm and financial losses[114]. - The dual class structure of common stock may adversely affect the trading market for Class A common stock, potentially making it less attractive to investors[166]. - The Company has exposure to liabilities related to representations and warranties made to investors, which could require repurchase of loans under certain conditions[423].