The corporation posts a loss of $67M in Q3 even with an average profit on first volume

Guild Holdings Co.parent company of Guild Mortgageposted a $66.9 million loss in the third quarter of 2024 after posting a $37 million profit in the previous quarter. Meanwhile, the volume of its startups rose to $6.9 billion, up 6% from the second quarter and 49% higher than the same period in 2023.

This led the division of its origins to “profitable” results, according to CEO Terry Schmidt.

Net income fell from $285.7 million in Q2 2024 to $159.3 million in Q3. The net loss incurred by the Guild was $66.9 million, and adjusted net income was $31.7 million, according to the 8-K filing with Securities and Exchange Commission (SEC). Adjusted EBITDA for the quarter was $46.4 million.

Schmidt said in a statement that despite the loss, the company’s trajectory continues to show “good momentum” based on the investment it has made in previous acquisitions.

Schmidt added that the “definite difference” the company has is the “realization of the growth platform” stemming from its acquisitions, including Academy Mortgage at the beginning of the year. He added that originations are expected to grow regardless of the interest rate situation.

“Our focus on achieving long-term profitable market benefits, along with our balanced business model of origination and services, positions us for success in all macroeconomic conditions,” Schmidt said.

“We trust our platform, products and people, and we expect to see improved productivity from our expanded network of origins over time, while we will continue to behave appropriately to deliver long-term value to our shareholders.”

Amber Kramer, the company’s chief financial officer, delved into the company’s financial results on Wednesday’s earnings call. The company’s servicing portfolio grew to $91.4 billion in unpaid principal balance (UPB), but recorded a net loss of $74.6 million caused by “a $124 million adjustment in lower MSRs reflecting lower interest rates,” Kramer said.

The aid portfolio UPB increased by 3% compared to a total of $89.1 billion at the end of June.

“Our servicing portfolio continues to be an important source of ongoing cash flow, future opportunities for loan recovery, and reinforces our strategy to live the life of clients,” said Kramer. “Furthermore, our business model – which includes the origination of service offerings – provides a natural hedge over time, as a downturn should translate into higher origins, both acquisitions and financing.”

The company’s cash and cash equivalents position was $106.2 million at the end of September, up $3.8 million quarter over quarter.

In after-hours trading on Wednesday, Guild shares traded as low as $12.99 after hitting a high of $14.37 earlier in the day.

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