Pontiac, Mich.-based United Wholesale Mortgage Holdings (UWM) today reported a 42% drop in annual revenue in 2021, while net income dropped 54%.
The largest drop in net income came in the fourth quarter. Fourth-quarter revenue was $605 million, down by nearly two-thirds from the previous year’s fourth-quarter revenue of $1.8 billion.
However, the company remained optimistic about 2022.
“If we hit our guidance, we’ll be highly profitable (this year),” CEO Matt Ishbia said. “You’ll see in the first quarter a lot of success. On a per-loan basis, we make money.”
The company reported $227 billion in loan origination for 2021, up from $183 billion the previous year. In the fourth quarter, UWM reported $55 billion in loan originations, up from $54.6 billion in 2020’s fourth quarter.
The company reported diluted earnings per share of 66 cents a share. They also said they are repurchasing about 8.8 million shares for $60 million.
Currently, UWM said, it has a 31% market share of the wholesale channel, but the company did not release its market share percentage last year, so there is no way of knowing whether the figure has improved or declined. However, a 2020 news release states that through the first three quarters of 2019, UWM accounted for 32.7% of market share.
During today’s call, Ishbia said, “Loan officers are joining the broker channel in the biggest push we’ve seen since 2018 and it’s much bigger than it was in 2018 as UWM only plays in 20 percent of that market, the broker channel.”
Asked how fast the wholesale mortgage channel is going to grow, Ishbia said, “It’s going to grow to 33% by 2025 or 2026.”
“2021 was a fantastic year for UWM with incredible milestones: from becoming a public company to delivering another year of record production,” Ishbia said in a news release.
“Our staffing levels have naturally migrated a little bit lower so on overall expense basis, our costs per loan will go up but because we’ve managed our head count and our hiring rate, our overall headcount is little bit lower,” UWM’s Chief Financial Officer Tim Forrester said.
In its news release, the company talked up BOLT, a technology system developed by UWM that it said speeds up mortgage applications by approximately five days. In today’s earnings call, neither Ishbia or Forrester discussed how much additional revenue they would make from BOLT.
During mid-day trading, UWM stock was trading at around $4.14, down about 20 cents from the previous day.
