The parent of wholesale lender Homepoint on Thursday reported its second-consecutive quarterly loss, but the ink was not quite as bright red this time.
Home Point Capital Inc., parent of Home Point Financial Corp. (which does business as Homepoint), reported a net loss of $36.8 million, or 27 cents per share, an improvement from the loss of $94.3 million, or 68 cents per share, it reported for the third quarter. The results beat analysts expectations of 20 cents per share.
The quarterly net loss came on revenue of $19.2 million, more than double the $8.3 million in net revenue the company reported in the previous quarter, but down 89% from $180.5 million in net revenue a year earlier.
For the full year of 2022, Home Point reported a net loss of $163.7 million, or $1.18 per share, compared to net income of $166.3 million, or $1.19 per share, for all of 2021.
The revenue declines were primarily due to significant declines in loan originations. For the fourth quarter, Home Point reported total funded origination volume of $1.7 billion, down 59% from $4.14 billion in the previous quarter, and down 91.8% from $20.5 billion a year earlier.
For the full year, funded origination volume totaled $$27.7 billion, down 71% from $96.2 billion for all of 2021.
“As 2022 was largely characterized by an increasingly challenging market, our primary strategic focus was on resetting the organization to navigate the current environment and best position Home Point for long-term sustainability,” said Willie Newman, president and CEO. “We have made significant progress on key initiatives that will enhance our liquidity, improve our operational performance, and serve as a springboard for growth and a path to profitability in 2023.”
Other key highlights:
- The company reported an $89.1 million reduction in total expenses in the fourth quarter as compared to a year earlier.
- Gain on sale margin was 86 basis points in Q4, up from 51 bps in Q3 and 58 bps a year earlier.
- Broker partners totaled 9,259 as of Dec. 31, up by 1,247 from a year earlier and up by 143 from Q3.
- Home Point said it had 1,658 active broker partners In Q4.
- Servicing customers totaled 315,478, down 25.9% from Q4f 2021, and down 4.8% from Q3.
- The unpaid principal balance (UPB) of the servicing portfolio totaled $88.7 billion as of Dec. 31, 2022, down 30.9% from a year earlier, and down 5.8% from the Q3.
- In October,completed a previously announced sale of its ownership stake in Longbridge Financial for approximately $38.9 million in cash.
- Available liquidity was $662.5 million as of Dec. 31.
As the company wrapped up its year and sets its sights on profitability in 2023, it is losing its chief financial officer. On Feb. 24, CFO Mark E. Elbaum submitted his resignation, effective April 3.
The company said in a regulatory filing that Elbaum will continue to serve as CFO through that date.
The filing also noted that his “departure is not related to the company’s financial or operating results or to any disagreements with the company” about its financial, operational, accounting, or reporting policies or practices.
The filing added that it is conducting a search for Elbaum’s successor.
