Top Lenders Q3 Earnings Roundup

Earnings for the third quarter of 2023 are out offering a view into how lenders did. Here’s a snapshot of how some of the nation’s top lenders handled this summer.

Rocket Mortgage

Rocket reported solid earnings with a net revenue boost of 12.8% YOY, though profits remained effectively flat from Q2 at $1.2 billion. Originations totaled $22.2 billion, down 13.2% YOY and also basically the same from last quarter, no big surprise given current market conditions. Its gain on sales margin rose for a third straight quarter, up 2.76%.

“I am very proud of our team for delivering strong results against a challenging economic backdrop,” said Varun Krishna, CEO of Rocket Companies. “In today’s climate, innovation is essential. With the incredible amount of data in our ecosystem, paired with the transformative power of AI, Rocket is uniquely positioned to disrupt the industry.”

Financial services firm Morningstar notes that Rocket has maintained a “healthy financial position because of significant cost-cutting and a strong balance sheet.”

United Wholesale Mortgage

UWM reported $29.7 billion in loan originations, including $25.9 billion in purchase volume. Net income was reported at $301 million, which includes a $92.9 million increase in the fair value of mortgage servicing rights and diluted earnings at $0.15 per share. This was the second consecutive quarter of profits for UWM despite industry-wide challenges.

Mat Ishbia, chairman and CEO of UWMC, said they are investing in technology and hiring new team members in preparation for a turn in rates.

“While others choose to dwell on high mortgage rates and low housing inventory, at UWM we remain focused on growing our market share and the broker channel. We are investing in new technology and hiring new team members to ensure that we are prepared for the eventual turn in rates. In the meantime, we expect to continue to generate significant purchase volume and remain highly profitable,” Ishbia said.

loanDepot

The third quarter hit loanDepot hard with a sixth consecutive quarterly loss of $26.8 million. Revenue decreased 2% from Q2 to $266 million and originations were down 3% from Q2.

The company did score well with HELOC revenue, with President and CEO Frank Martell calling it a “meaningful, positive contributor to our financial performance.”

He reiterated the company’s Vision 2025 plan, announced in 2022, which includes simplifying the organizational structure, focusing on client service, quality, automation, and operating leverage. In line with this, another round of layoffs is likely on the horizon for loanDepot, according to Inman.

PennyMac

Servicing boosted PennyMac, which reported a 60% profit boost in Q3, to new heights. The company announced $92.87 million in net income, up from $58.2 million the prior quarter, though down from $135 million the year prior.

Revenue for the quarter stood at $400.3 million.

“PennyMac Financial produced outstanding results in the third quarter, returning to a double-digit annualized return on equity,” said Chairman and CEO David Spector. “Our results this quarter highlight our management team’s ability to successfully navigate this challenging mortgage landscape while also positioning PennyMac Financial to generate increasingly stronger returns over time.”

Mr. Cooper

Mr. Cooper Group ended the quarter on a high note as its servicing business increased 10% YOY to $937 billion, making it the nation’s largest servicer. The company brought in a net income of $275 million for Q3, equivalent to a return on common equity of 26.2%.

Book value per share and tangible book value per share increased to $65.38 and $62.78.

The group touted its acquisitions of Home Point Capital and Roosevelt Management Company during the quarter but also announced that Vice Chairman and President Chris Marshall plans to retire by the end of 2024.

A security breach recently took Mr. Cooper offline for four days. It’s unclear how much of its clients’ data was exposed.