California-based loanDepot, a national mortgage funder, showed a first quarter loss of $91 million on quarterly revenues of $503 million, the company's first quarter earnings report shows.
Quarterly revenues were down 40% from last year’s fourth quarter, when the company produced $705 million in quarterly revenue and a quarterly profit of $14 million, the company’s documents showed.
Loan origination volume during the quarter was $21.6 billion, down from $29 billion in the previous quarter, the company said.
“Our results reflected the sharp and rapid increase in market interest rates, which led to significantly lower profit margins during the latter half of the quarter,” said loanDepot founder and executive chairman Anthony Hsieh. “While we made progress toward our goal of reducing the expense base to align with earlier expectations, our volumes have continued to decline and expense reductions have not kept pace with the rapidly changing environment, intense competition, lower volume and decreasing profit margins are putting pressure on the entire industry, which I believe creates long-term opportunities for loanDepot to outperform less efficient, less diversified competitors.”
In April, loanDepot hired a new CEO. Hsieh, who has served as chairman and CEO since he founded the company in 2010, has been named executive chairman, while former CoreLogic CEO Frank Martell has been hired as the company’s president & CEO. Martell will focus on daily operations and lead the company’s diversified multi-channel mortgage origination model.
Martell said in then earnings announcement, "I recognize that there are short-term challenges facing the company due to market conditions that will have adverse impacts on our profitability in the near term. We have made and will continue to make progress on reducing our expenses to reflect our new expectations for industry volume. As part of that plan and as part of our balance sheet and capital management strategies, we are suspending our regular quarterly dividend for the foreseeable future."
This is a developing story. loanDepot will have an earnings call at 11 a.m. Eastern Time.
