loanDepot Inc. completed its first year as a public company in 2021 with a larger share of the mortgage lending market, but its net earnings were down significantly for both the four quarter and the full year.
One of the nation’s largest mortgage lending companies, loanDepot reported consolidated net income of $8.6 million, or 5 cents per diluted share, in the fourth-quarter of 2021, down 83.3% from $51.5 million in the third quarter of last year.
Based on non-GAAP financial measures, loanDepot reported adjusted net income of $28.9 million, or 9 cents per diluted share, in the fourth quarter of 2021, down 92% from $375.76 million in the same quarter of 2020. The earnings per share were well below analysts expectations of 16 cents per share.
On an annual basis, non-GAAP adjusted net income for all of 2021 was $555.6 million, down 62.6% from $1.49 billion in 2021.
In a news release, the company cited increasingly difficult market conditions, as well as lower rate-lock volume and lower gain-on-sale margins. Rate-lock volume in the fourth quarter of 2021 was $34.8 billion, down 30% from $49.7 billion in the fourth quarter a year earlier. The gain-on-sale margin in the fourth quarter of 2021 fell to 2.23% from 3.29% in the same quarter of 2020.
The difficult market conditions the company cited include higher interest rates that resulted in fewer refinancing transactions; housing market supply constraints and a seasonal slowdown in buying activity, and a decreasing number of borrowers in distress, with fewer delinquencies and fewer borrowers in forbearance.
loanDepot Founder and CEO Anthony Hsieh nonetheless put a positive spin on the results.
"Our industry is a cyclical one, and the market conditions we face today have been faced before by loanDepot's experienced leadership team, the members of which have collectively navigated many housing and interest rate cycles over the last 35 years,” he said. “Our business was purpose-built with periods of pressure in mind.”
He said the company’s “proprietary tech stack, our intentionally diverse mix of channels, and our sophisticated performance marketing machine mean we control our lead flow, our customer contact strategy and the point of loan origination. This is a critical competitive advantage, enabling us to pivot and adjust our production as market trends demand.”
Positive highlights for the company include:
- It achieved market share growth of 3.4% for the full year 2021, up from 2.5% in 2020.
- It increased the number of in-market retail loan officers by 18% and added four new joint-venture partnerships during 2021, contributing to a corresponding 39% increase in purchase volume, and
- It ended the year with a servicing portfolio of $162.1 billion in unpaid principal balance.
"Conditions like those we enjoyed in 2020 are when loanDepot drives revenue, but the conditions we expect in 2022 present an incredible opportunity for us to capture market share,” Hsieh said. “We are well positioned to demonstrate the long-term value of loanDepot by remaining focused on our strategic priorities while seizing market share from competitors that are less capable of withstanding these challenging conditions.”
He added, "The results of 2021 are only a preview of what's to come as we leverage our brand, develop and apply innovative technology solutions, drive down costs and add more products and services to help our customers successfully navigate one of the most important financial transactions of their lives.”
