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Shares in loanDepot dropped to a new 12-month low in after hours trading Tuesday after the company reported a $67 million fourth quarter net loss, despite boosting mortgage originations by 34 percent from a year ago.
The Irvine, California-based lender — which last week announced that CEO Frank Martell will be relinquishing that position in June — posted a $202 million 2024 net loss, a 14 percent improvement from 2023.
While loanDepot originated $7.2 billion in mortgages in the final three months of the year — $1.8 billion more than Q4 2023 — company executives said they expect mortgage originations will shrink to between $4.5 billion and $5.5 billion during Q1 2025.
Shares in loanDepot, which in the last 12 months have traded for as little as $1.52 and as much as $3.22, closed at $1.61 Tuesday before earnings were released. In after-hours trading, loanDepot shares were down more than 10 percent, falling below their previous 12-month low.
David Hayes
“2024 was a successful year for loanDepot from a financial point of view,” said loanDepot Chief Financial Officer David Hayes in a statement. “We grew revenue, expanded margins, reduced our corporate debt and made important investments in productivity initiatives that benefited the year.”
In addition to making loans, loanDepot also retains the servicing rights on many of the loans it originates, earning fees from mortgage-backed securities (MBS) investors. LoanDepot finished the year with $1.61 billion in mortgage servicing rights (MSRs), down 19 percent from the end of 2023. Servicing fee income for the year was down 2 percent, to $481.7 million.
LoanDepot finished the year with a $422 million cash balance, after a corporate debt refinancing that extended the maturity and reduced outstanding corporate debt by $137 million.
Last week loanDepot announced that founder and controlling shareholder, Anthony Hsieh, has returned to the executive leadership team. Hsieh, who handed the CEO reins to Martell in 2022, has rejoined the company as executive chairman of mortgage operations.
3 years in the red
LoanDepot annual revenue and net earnings, 2018-2024. Source: LandDepot regulatory filings.
LoanDepot hasn’t turned a full-year profit since 2021 — the tail end of a huge refinancing boom driven by record low mortgage rates during the pandemic.
Frank Martell
On a call with investment analysts, Martell called 2024 “a year of significant progress for loanDepot, particularly with the completion of our Vision 2025 strategic program,” the company’s cost-cutting strategy. “Vision 2025 was born from the fires of one of the most significant contractions in the housing and mortgage markets in recent memory.”
Refi boom and bust
LoanDepot mortgage originations by purpose, 2018-2024. Source: LoanDepot regulatory filings.
As mortgage rates rebounded in 2022, refinancing volume plummeted by nearly 75 percent, and the mortgage market “continued to remain depressed in 2023 and 2024 with volumes approaching generational lows,” Martell noted.
Last year, loanDepot boosted refinancings by 34 percent, to $8.3 billion, helping offset a 2 percent drop in purchase loan production to $16.2 billion. At $24.5 billion, total mortgage production was up 8 percent, to $24.5 billion.
“The market inevitably recovers,” Martell said. “I believe the company is well positioned to become a lender of choice for the American homeowner to buy, manage and optimize their homeownership journey.”
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