Guild Holdings Company Reports Fourth Quarter and Full Year 2023 Results

• Originations of $15.0 Billion in 2023, Including $3.5 Billion in Fourth Quarter
• Net Revenue of $0.7 Billion in 2023, Including $57.2 Million in Fourth Quarter
• Net Loss of $39.1 Million in 2023, Including $93.1 Million in Fourth Quarter
• Adjusted Net Income of $48.0 Million in 2023, Including $12.5 Million in Fourth Quarter
• Return on Equity of (3.2%) and Adjusted Return on Equity of 3.9% in 2023
• Gain on Sale Margin on Originations of 330 bps in the Fourth Quarter
• 93% of Originations were Purchase Originations in the Fourth Quarter
• Expanded Market Share Subsequent to Quarter-End with Acquisition
• Extended Share Repurchase Program

Guild Holdings Company (NYSE:GHLD) ("Guild" or the "Company"), a growth-oriented mortgage company that employs a relationship-based loan sourcing strategy to execute on its mission of delivering the promise of homeownership, today announced results for the fourth quarter and full year ended December 31, 2023.

"We have continued to leverage the strength of our platform to grow market share as we execute on our strategy that is focused on the purchase market," stated Terry Schmidt, Guild Holdings Chief Executive Officer. "We are proud to be a lender of choice in the communities across the country that we serve by providing creative solutions for homebuyers seeking to finance their homes in this higher rate environment. As we look forward, we are encouraged by the market stabilization that is emerging, but anticipate a more muted environment in the near term, particularly in the seasonally slower first quarter."

Ms. Schmidt continued, "By being disciplined and focusing on maintaining a robust capital position, we have effectively pursued complementary and compelling acquisitions and team additions to position us for growth when the cycle turns. We are pleased with our most acquisition of Academy Mortgage, which lifts Guild to become the 8th largest non-bank retail mortgage lender and represents a 25% increase to origination volume based on results from both organizations through the third quarter of 2023, according to data from Inside Mortgage Finance Publications. This acquisition marks the fifth transaction over past year and a half, adding new geographies, loan officers and products that will continue to distinguish Guild in the marketplace and allow us to create meaningful value for our shareholders over time."

Fourth Quarter and Full Year Summary

Please refer to "Key Performance Indicators" and "GAAP to Non-GAAP Reconciliations" elsewhere in this release for a description of the key performance indicators and definitions of the non-GAAP measures and reconciliations to the nearest comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the United States of America ("GAAP").

Origination Segment Results

Origination segment net loss was $26.8 million in the fourth quarter compared to net income of $7.2 million in the prior quarter primarily driven by lower origination volumes due to low housing supply and purchase seasonality, coupled with prolonged higher interest rates. Gain on sale margins on originations declined 47 bps quarter-over-quarter to 330 bps. Gain on sale margins on pull-through adjusted locked volume decreased 42 bps quarter-over-quarter to 347 bps and total pull-through adjusted locked volume was $3.3 billion compared to $4.1 billion in the prior quarter.

Servicing Segment Results

Servicing segment net loss was $72.1 million in the fourth quarter compared to net income of $84.0 million in the prior quarter. The Company retained mortgage servicing rights ("MSRs") for 77% of total loans sold in the fourth quarter of 2023.

In the fourth quarter of 2023, valuation adjustments with respect to the Company's MSRs totaled a loss of $134.7 million, compared to a gain of $22.1 million in the prior quarter. Guild's purchase recapture rate was 25% in the fourth quarter of 2023, which aligns with the Company's focus on customer service and its synergistic business model.

Share Repurchase Program

During the three months ended December 31, 2023, the Company repurchased and subsequently retired 97,557 shares of Guild's Class A common stock at an average purchase price of $11.69 per share. As of December 31, 2023, $11.2 million remains available for repurchase under the Company's share repurchase program. On March 7, 2024, the Company's Board of Directors extended the share repurchase program to May 5, 2025.

Balance Sheet and Liquidity Highlights

The Company's cash and cash equivalents position was $120.3 million as of December 31, 2023. The Company's unutilized loan funding capacity was $1.0 billion, while the unutilized MSR lines of credit was $336.2 million, based on total committed amounts and borrowing base limitations. The Company's leverage ratio was 1.3x, defined as total secured debt including funding divided by tangible stockholders' equity.

Webcast and Conference Call

The Company will host a webcast and conference call on Tuesday, March 12, 2024 at 5 p.m. Eastern Time to discuss the Company's results for the fourth quarter and full year ended December 31, 2023.

The conference call will be available on the Company's website at https://ir.guildmortgage.com/. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time to register. The conference call can also be accessed by the following dial-in information:

• 1-877-407-0789 (Domestic)
• 1-201-689-8562 (International)

A replay of the call will be available on the Company's website at https://ir.guildmortgage.com/ approximately two hours after the live call through March 26, 2024. The replay is also available by dialing 1-844-512-2921 (United States) or 1-412-317-6671 (international). The replay pin number is 13743252.

About Guild Holdings Company

Founded in 1960 when the modern U.S. mortgage industry was just forming, Guild Holdings Company is a nationally recognized independent mortgage lender providing residential mortgage products and local in-house origination and servicing. Guild's collaborative culture and commitment to diversity and inclusion enable it to deliver a personalized experience for each customer. With more than 4,200 employees and over 350 retail branches as of December 31, 2023, Guild has relationships with credit unions, community banks, and other financial institutions and services loans in 49 states and the District of Columbia. Guild's highly trained loan professionals are experienced in government-sponsored programs such as FHA, VA, USDA, down payment assistance programs and other specialized loan programs. Its shares of Class A common stock trade on the New York Stock Exchange under the symbol GHLD.

Forward-Looking Statements

This press release and a related presentation by management of Guild Holdings Company (the "Company") contains forward-looking statements, including statements about the Company's growth strategies, the Company's future revenue, operating performance or capital position, ongoing pursuit of M&A opportunities, expectations for benefits from recent acquisitions, such as increased market share and origination volume, expectations regarding home sales and mortgage activity, the impact of future interest rate environments and any other statements that are not historical facts. These forward-looking statements reflect our current expectations and judgments about future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as "may," "should," "could," "predict," "potential," "believe," "will likely result," "expect," "continue," "will," "anticipate," "seek," "estimate," "intend," "plan," "projection," "would" and "outlook," or the negative version of those words or other comparable words or phrases of a future or forward-looking nature.

Important factors that could cause our actual results to differ materially from those expressed in or implied by forward-looking statements include, but are not limited to, the following: any disruptions in the secondary home loan market and their effects on our ability to sell the loans that we originate; any changes in macroeconomic and U.S. residential real estate market conditions; any changes in certain U.S. government-sponsored entities and government agencies, and any organizational or pricing changes in these entities, their guidelines or their current roles; any changes in prevailing interest rates or U.S. monetary policies; the effects of any termination of our servicing rights; we depend on our loan funding facilities to fund mortgage loans and otherwise operate our business; the effects of our existing and future indebtedness on our liquidity and our ability to operate our business; any disruption in the technology that supports our origination and servicing platform; our failure to identify, develop and integrate acquisitions of other companies or technologies; pressure from existing and new competitors; any failure to maintain or grow our historical referral relationships with our referral partners; any delays in recovering service advances; any failure to adapt to and implement technological changes; any cybersecurity breaches or other vulnerability involving our computer systems or those of certain of our third-party service providers; our inability to secure additional capital, if needed, to operate and grow our business; the impact of operational risks, including employee or consumer fraud, the obligation to repurchase sold loans in the event of a documentation error, and data processing system failures and errors; any repurchase or indemnification obligations caused by the failure of the loans that we originate to meet certain criteria or characteristics; the seasonality of the mortgage origination industry; any non-compliance with the complex laws and regulations governing our mortgage loan origination and servicing activities; material changes to the laws, regulations or practices applicable to reverse mortgage programs; our control by, and any conflicts of interest with, McCarthy Capital Mortgage Investors, LLC; our dependence, as a holding company, upon distributions from Guild Mortgage Company LLC to meet our obligations; and the other risks, uncertainties and factors set forth under Item IA. – Risk Factors and all other disclosures appearing in Guild's Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 as well as other documents Guild files from time to time with the Securities and Exchange Commission. You should not place undue reliance on any such forward-looking statements.

Any forward-looking statement speaks only as of the date on which it is made, and, except as otherwise required by law, we undertake no obligation to update any forward-looking statement made in this press release or any related presentation by Company management.

Non-GAAP Financial Measures

To supplement our financial statements presented in accordance with GAAP and to provide investors with additional information regarding our GAAP financial results, we disclose certain financial measures for our consolidated and operating segment results on both a GAAP and a non-GAAP (adjusted) basis. The non-GAAP financial measures disclosed should be viewed in addition to, and not as an alternative to, results prepared in accordance with GAAP. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly titled measures presented by other companies.

Adjusted Net Income. Net income (loss) is the most directly comparable financial measure calculated and presented in accordance with GAAP for Adjusted Net Income, a non-GAAP measure. We define Adjusted Net Income as earnings or loss attributable to Guild excluding (i) the change in the fair value measurements related to our MSRs due to changes in model inputs and assumptions, (ii) change in the fair value of contingent liabilities related to completed acquisitions, net of change in fair value of notes receivable related to acquisitions, (iii) amortization of acquired intangible assets and (iv) stock-based compensation. We exclude these items because we believe they are non-cash expenses that are not reflective of our core operations or indicative of our ongoing operations. Adjusted Net Income is also adjusted by applying an estimated effective tax rate to these adjustments. In addition, we exclude the change in the fair value of MSRs due to changes in model inputs and assumptions from Adjusted Net Income and Adjusted EBITDA below because we believe this non-cash, non-realized adjustment to net revenues is not indicative of our operating performance or results of operations but rather reflects changes in model inputs and assumptions (e.g., prepayment speed, discount rate and cost to service assumptions) that impact the carrying value of our MSRs from period to period.

Adjusted Earnings Per Share—Basic and Diluted. Earnings per share is the most directly comparable financial measure calculated and presented in accordance with GAAP for Adjusted Earnings per share, a non-GAAP measure. We define Adjusted Earnings Per Share as our Adjusted Net Income divided by the basic and diluted weighted average shares outstanding of our Class A and Class B common stock. Diluted weighted average shares outstanding is adjusted include potential shares of Class A common stock related to unvested RSUs that were excluded from the calculation of GAAP diluted loss per share because they were anti-dilutive due to the net loss, when applicable.

Adjusted EBITDA. Net income (loss) is the most directly comparable financial measure calculated and presented in accordance with GAAP for Adjusted EBITDA, a non-GAAP measure. We define Adjusted EBITDA as earnings before (i) interest expense on non-funding debt (without adjustment for net warehouse interest related to loan fundings and payoff interest related to loan prepayments), (ii) taxes, (iii) depreciation and amortization and (iv) net income attributable to the non-controlling interests and excluding (v) any change in the fair value measurements of our MSRs due to valuation assumptions, (vi) change in the fair value of contingent liabilities related to completed acquisitions, net of change in fair value of notes receivable related to acquisitions and (vii) stock-based compensation. We exclude these items because we believe they are not reflective of our core operations or indicative of our ongoing operations.

Adjusted Return on Equity. Return on equity is the most directly comparable financial measure calculated and presented in accordance with GAAP for Adjusted Return on Equity, a non-GAAP measure. We define Adjusted Return on Equity as annualized Adjusted Net Income as a percentage of average beginning and ending stockholders' equity during the period.

Tangible Net Book Value Per Share. Book value per share is the most directly comparable financial measure calculated and presented in accordance with GAAP for Tangible Net Book Value Per Share. We define Tangible Net Book Value Per Share as total stockholders' equity attributable to Guild, less intangible assets, net and goodwill divided by the total shares of our Class A and Class B common stock outstanding. The most directly comparable GAAP financial measure for Tangible Net Book Value Per Share is book value per share.

We use these non-GAAP financial measures (other than Tangible Net Book Value Per Share) to evaluate our operating performance, to establish budgets and to develop operational goals for managing our business. These non-GAAP financial measures are designed to evaluate operating results exclusive of fair value and other adjustments that are not indicative of our business's operating performance. Accordingly, we believe that these financial measures provide useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects. In addition, management uses the non-GAAP financial measure of Tangible Net Book Value Per Share to evaluate the adequacy of our stockholders' equity and assess our capital position and believes tangible net book value provides useful information to investors in assessing the strength of our financial position.

For more information on these non-GAAP financial measures, please see the "GAAP to Non-GAAP Reconciliations" included at the end of this release.

Key Performance Indicators

Management reviews several key performance indicators to evaluate our business results, measure our performance and identify trends to inform our business decisions. Summary data for these key performance indicators is listed below.

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