During the initial three months of 2023, Guild Mortgage, a lender based in California, experienced challenges similar to other lenders due to elevated mortgage rates and limited housing inventory. Despite a leadership transition announced in March, the company’s revenues declined more than its expenses, resulting in a loss for the quarter.
Guild Mortgage, led by CEO Mary Ann McGarry, a lender focusing on home purchases with a distributed retail model, reported a net loss of $37.2 million in the first quarter of 2023, surpassing the $15 million loss from the previous quarter. The adjusted net loss for Q1 2023 stood at $2.5 million.
During this period, the company’s net revenues decreased by 23% to $103.9 million compared to Q4 2022. Meanwhile, total expenses dropped to $154.7 million, representing a 2% decrease from the previous quarter.
After a long tenure at Guild since 1984, McGarry announced her retirement scheduled for late June. Terry Schmidt, the current president of Guild, will assume the role of CEO.
According to McGarry, she plans to continue serving on the board of directors and expects a smooth transition as she has been collaborating with Schmidt for nearly forty years.
In the first quarter of 2023, Guild Mortgage’s total in-house originations declined by 9% to $2.7 billion compared to the previous quarter. However, the pull-through adjusted locked volume increased to $3.3 billion in Q1 2023, up from $2.8 billion in Q4 2022.
Although gain-on-sale margins rose to 343 basis points in Q1 2023 from 331 bps in Q4 2022, margins on pull-through adjusted locked volume decreased from 351 bps to 284 bps in the same period. Executives attribute this reduction to higher volumes.
In the first quarter of 2023, Guild experienced a net loss of $32.8 million in its origination business, marking an increase from the net loss of $26.6 million in the previous quarter. Additionally, the company faced a loss of $300,000 in its servicing portfolio, a significant decrease from the $21.5 million net income reported in the prior quarter.