Guild Holdings Q4 2024: Contradictions in MSR Strategy, Valuation, and Market Dynamics

These are the key contradictions discussed in Guild Holdings Company's latest 2024 Q4 earnings call, specifically including: MSR Retention Rates and Strategy, MSR Valuation and Hedging, Impact of Higher Interest Rates on the Market, Gain on Sale Margins Expectations, and MSR Valuation and Retention Strategy:



Revenue and Origination Growth:
- Guild Holdings Company (NYSE:GHLD) reported a 60% increase in net revenue to $1 billion, with total originations increasing 57% year-over-year to $24 billion.
- The growth was driven by exceptional execution of the company's strategy, focusing on expanding market share and customer retention.

Operational Leverage and Balance Sheet Strength:
- Guild's expenses increased by only 33%, indicating operational leverage and efficient scale benefits.
- The company's strong financial management is reflected in its leverage ratio of 1.7x at quarter-end and a tangible net book value per share of $16.59.

Servicing Portfolio and Customer Retention:
- The servicing portfolio expanded to approximately $93 billion, a 9% increase from the prior year.
- The company maintained a high quality portfolio and improved its recapture rate to 35%, up from 27% a year ago, demonstrating the effectiveness of its customer for life strategy.

Dividend and Shareholder Returns:
- Guild declared a special cash dividend of $0.50 per share payable on March 31, 2025.
- The company has returned capital to shareholders by repurchasing approximately 28,000 shares and maintaining a strong balance sheet to support growth and strategic investments.

Market Share and Strategic Expansion:
- Since 2020, Guild has doubled its loan officers, contributing to its above-industry average loan production.
- The company has acquired six mortgage lenders and focused on organic recruitment, positioning itself for continued growth with less than 2% of the total market share.