On November 8, 2023, UWM Holdings Corp (UWMC, Financial), the parent of United Wholesale Mortgage, released its earnings for the third quarter ended September 30, 2023. Despite the headwinds of high mortgage rates and low housing inventory, the company showcased resilience with a robust net income of $301.0 million. This performance, however, represents a slight dip from the $325.6 million reported in the third quarter of the previous year.
Financial Performance Overview
The total loan origination volume for the quarter was $29.7 billion, with a notable $25.9 billion attributed to purchase volume. This figure marks a decrease from the $33.5 billion total origination volume in Q3 of the previous year. The company's total gain margin improved to 97 basis points in Q3 2023, up from 88 bps in Q2 2023 and 52 bps in Q3 2022.
Adjusted EBITDA for the quarter was reported at $112.1 million, a decrease from $125.4 million in the previous quarter but a significant improvement from the $(1.4) million in the same quarter last year. UWM Holdings Corp (UWMC, Financial) also reported an increase in total equity to $3.1 billion as of September 30, 2023, from $2.9 billion at the end of the previous quarter, although this is lower than the $3.4 billion reported a year earlier.
Balance Sheet and Liquidity Position
The company ended the third quarter with approximately $2.9 billion in available liquidity, including $0.9 billion in cash and self-warehouse, and $2.0 billion in available borrowing capacity. The unpaid principal balance of mortgage servicing rights (MSRs) stood at $281.4 billion with a weighted average coupon (WAC) of 4.20%.
Operational and Strategic Highlights
UWM Holdings Corp (UWMC, Financial) achieved a Net Promoter Score of +86.4 in Q3 2023, reflecting strong customer satisfaction. The company's delinquency rate was also significantly better than the industry average. In terms of product and investor mix, the unpaid principal balance of originations was led by conventional loans, followed by government and jumbo loans.
Chairman and CEO Mat Ishbia commented on the company's performance, stating,
The strength of UWM and the broker channel is on full display. We are investing in new technology and hiring new team members to ensure that we are prepared for the eventual turn in rates."Ishbia also emphasized the company's commitment to growth and profitability despite industry challenges.
Outlook and Dividend
Looking ahead, UWM Holdings Corp (UWMC, Financial) anticipates fourth-quarter production to be in the range of $19 to $26 billion, with a gain margin from 75 to 100 basis points. The full-year 2023 production is expected to be between $103 and $110 billion. The company's Board of Directors declared a consistent cash dividend of $0.10 per share on the outstanding shares of Class A common stock, payable on January 11, 2024, to stockholders of record as of December 20, 2023.
For a detailed analysis of UWM Holdings Corp (UWMC, Financial)'s financials and further insights into their earnings report, visit GuruFocus.com.
Explore the complete 8-K earnings release (here) from UWM Holdings Corp for further details.
