The following is a summary of the UWM Holdings Corporation (UWMC) Q4 2023 Earnings Call Transcript:
Financial Performance:
UWM reported total production over $108 billion for 2023 with $94 billion being from purchases. In Q4, $20.7 billion are reported from purchases and $24.4 billion in closed production.
The firm's gross margin stood at 92 basis points, generating pre-tax earnings of $39.2 million for Q4 and $253.7 million for the year, marking significant yoy increases.
UWM reported a significant write-down in Q4; however, this is expected to recover in the next quarter due to rising rates.
Adjusted EBITDA for 2023 was $478.3 million, up from $282.4 million in 2022, and Q4 EBITDA was $99.6 million, up from $60.4 million last year.
Despite a GAAP net loss for the year and Q4, capital and leverage ratios remain within expectancy. By year's end, liquidity was approximately $2.2 billion.
Business Progress:
UWM increased their workforce by 15% in 2023 and intends to continue paying a consistent $0.10 per share dividend.
The company experienced growth in its broker channel and has made investments to provide brokers competitive advantages regarding speed, price, and process.
UWM anticipates Q1 production for 2024 to be between $22 billion to $28 billion and expects margins to increase to 80 to 105 basis points.
The company is committed to growing the broker channel, focusing on shifting loan officers from retail to wholesale, and expects further growth.
UWM continued selling Mortgage Servicing Rights (MSRs) as part of its strategy to mitigate the impact of interest rate declines on the fair value of its MSR portfolio. They plan to keep the MSR book size between $250 billion to $350 billion.
UWM's financial strength and strategic focus on broker channel growth position it well for various market cycles.
More details: UWM Holdings IR
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