Guild Mortgage bounces back to profit, acquires insurance company

Expansion-hungry Guild Mortgage bounced back from the prior quarter, reporting a positive net income, while announcing the purchase of Waterton Insurance. It also hinted at more potential acquisitions to come.

The San Diego giant stepped into the black with a net income of $28.5 million in the first quarter, up from a net loss of $93 million the previous quarter. Guild's gain-on-sale margin improved to 364 bps, up 30 bps from last quarter.

Origination volume rose by 8 percent at the shop, coming in at $3.9 billion, up from $3.6 billion at the end of last year. The majority of its origination volume was propped up by purchase business, which made up 91% of closed loans.

Though the company's executives foresee a challenging landscape for the year ahead, Guild has already generated $2 billion in loan originations in April, it said. The mortgage shop also approved a special cash dividend of fifty cents per share.

Another bright spot was its servicing segment net income, which came in at $83.9 million compared to a net loss of $72.1 million in the fourth quarter of 2023. Additionally, its servicing portfolio unpaid principal balance increased, growing to $86.3 billion, up from $85 billion as of Dec. 31. 

Though Guild has revealed little about its plans for Waterton Insurance, David Neylan, chief operating officer at Guild, said the company made the purchase as a means to "enable a convenient insurance shopping experience for mortgage customers."

Guild is "executing judiciously across all our capital priorities including investing in our organic growth, selectively pursuing accretive acquisitions, and enhancing technology and servicing capabilities," said CEO Terry Schmidt, in a separate statement.

"We firmly believe that Guild is well-positioned to navigate the current landscape and capitalize on opportunities to grow market share and innovate new ways to make the promise of homeownership more attainable for our clients," she added.

In the past year or so, Guild Mortgage has been pushing to expand its market share nationwide, acquiring five mortgage lenders since 2022. The company has been able to make these acquisitions thanks to its servicing model, which it dubs as "the cornerstone of [its] success."

Throughout the first quarter, Guild completed the onboarding Academy Mortgage, which it acquired for $13.4 million. That deal brought a 25% increase to Guild's origination volume and made it the eighth largest non-bank lender in the country, Schmidt said during the company's first quarter earnings call.

According to a tally, Guild has almost 3,000 sponsored loan officers, the Nationwide Mortgage Licensing System shows as of Thursday.