LoanDepot Posts Loss, but Origination Volume Up 27% from Q1

Mortgage company loanDepot released its second-quarter earnings Wednesday and saw a seasonal bump in loan originations.

On Wednesday, July 7, loanDepot posted a quarterly loss of $0.19 per share, which was 35.71% less than the Zacks Consensus Estimate of a loss of $0.14. Although the quarterly earnings were not great, loanDepot reported total revenue of $271.83 million, which surpassed the Zacks Consensus Estimate by 7.54%. This marks the third consecutive quarter of strong top-line growth for the company.

Despite the dismal results, loanDepot shares have increased by 33.9% since the start of the year, with the S&P 500 growing 17.7%. The company’s stock was trading at $2.24 a share in after-hours trading.

During the quarter, loanDepot invested heavily in restructuring efforts and operational efficiency, resulting in a 46 percent reduction in their net loss and maintenance of high liquidity. Additionally, the company ranked as the third-largest mortgage lender in America.

During the loanDepot’s second quarter 2023 earnings call, President Frank Martel said during the company’s call with analysts that “despite the historic downturn in the housing market, I believe that our second quarter and first half results represent an objective marker of our progress on the strategic imperatives we laid out in 2022.”

Chief Financial Officer David Hayes added more detail on the company’s financial and operational performance: “During the second quarter, loan origination volume was $6.3 billion, an increase of 27% from the first quarter of 2023.”

LoanDepot continued to emphasize its commitment to its Vision 2025 strategy. They appointed Darren Grailer as their Chief Accounting Officer, Ala Hansen as their Chief Marketing Officer, and Melanie Draper as their Chief Human Resources Officer.

The company possessed $719.1 million in cash and equivalents and an undrawn borrowing capacity totaling $1.6 million at quarter-end, according to the earnings presentation.

Martel concluded the call by noting that even though the market is still challenging loanDepot is well-positioned to navigate the market downturn and emerge as an even stronger company. He stated, “Our markets remain challenging, no doubt, but I believe this is also a very important period of positive change and forward momentum for the company.”