loanDepot Announces Third Quarter 2024 Financial Results

Business Wire

Tue, Nov 5, 2024, 2:06 PM 8 min read

Revenue of $315 million, up 18% compared to the prior year. Adjusted revenue of $329 million, up 26% compared to the prior year.
Company announces Ridgeland Mortgage joint venture with Smith Douglas Homes, expanding loanDepot’s network of partnerships with top homebuilders.
Pull-through weighted gain on sale margin of 329 basis points, the highest margin since the beginning of the market downturn.
Net income of $3 million and adjusted net income of $7 million, compared with prior year net loss and adjusted net loss of $34 million and $29 million, respectively, reflect the positive impact of higher revenue and cost productivity.
Adjusted EBITDA of $64 million compared with $15 million in the prior year.
Strong liquidity profile with cash balance of $483 million.

IRVINE, Calif., November 05, 2024--(BUSINESS WIRE)--loanDepot, Inc. (NYSE: LDI), (together with its subsidiaries, "loanDepot" or the "Company"), a leading provider of products and services that power the homeownership journey, today announced results for the third quarter ended September 30, 2024.

"Through the successful implementation of our Vision 2025 strategic program, loanDepot returned to profitability in the third quarter on modest improvements in market volumes, which resulted in higher revenue," said President and Chief Executive Officer Frank Martell. "We are also realizing the benefits of our ongoing cost management and productivity programs, which helped to fund strategic investments in our platforms, solutions and people. These investments should help position the company for success in 2025 and beyond.

"Vision 2025, launched in July of 2022, was a critical factor in our successful navigation of unprecedented and challenging market conditions over the past three years. The launch of Project North Star builds on the strategic pillars of Vision 2025, including our focus on durable revenue growth, positive operating leverage, productivity and investments in platforms and solutions that support our customer’s homeownership journey," added Martell.

"We are pleased that the successful completion of the strategic objectives of Vision 2025 has delivered the company’s first profitable quarter since the beginning of the market downturn in the first quarter of 2022," said David Hayes, Chief Financial Officer. "The third quarter served as validation of our strategy as we saw a modest improvement in the mortgage market, coupled with the company’s positive operating leverage fueled our return to profitability. As we look toward 2025, we anticipate continued market challenges, but we believe that the implementation of Project North Star will allow us to capture the benefit of higher market volumes while we continue to capitalize on our ongoing investments in operational efficiency to achieve sustainable profitability in a wide variety of operating environments."

Third Quarter Highlights:

Financial Summary

	Three Months Ended									Nine Months Ended
($ in thousands except per share data) (Unaudited)	Sep 30, 2024			Jun 30, 2024			Sep 30, 2023			Sep 30, 2024			Sep 30, 2023
Rate lock volume	$	9,792,423		$	8,298,270		$	8,295,935		$	24,893,023		$	25,738,036
Pull-through weighted lock volume⁽¹⁾		6,748,057			5,782,309			5,685,209			17,262,202			17,067,876
Loan origination volume		6,659,329			6,090,634			6,083,143			17,308,314			17,301,023
Gain on sale margin⁽²⁾		3.33	%		3.06	%		2.74	%		3.11	%		2.66	%
Pull-through weighted gain on sale margin⁽³⁾		3.29	%		3.22	%		2.93	%		3.12	%		2.69	%
Financial Results
Total revenue	$	314,598		$	265,390		$	265,661		$	802,772		$	745,395
Total expense		311,003			342,547			305,128			961,497			949,760
Net income (loss)		2,672			(65,853	)		(34,262	)		(134,685	)		(175,743	)
Diluted earnings (loss) per share	$	0.01		$	(0.18	)	$	(0.09	)	$	(0.36	)	$	(0.48	)
Non-GAAP Financial Measures⁽⁴⁾
Adjusted total revenue	$	329,499		$	278,007		$	261,116		$	838,318		$	755,852
Adjusted net income (loss)		7,077			(15,890	)		(29,211	)		(48,309	)		(124,417	)
Adjusted EBITDA		63,742			34,575			15,253			98,820			(8,399	)

(1)		Pull-through weighted rate lock volume is the principal balance of loans subject to interest rate lock commitments, net of a pull-through factor for the loan funding probability.
(2)		Gain on sale margin represents the total of (i) gain on origination and sale of loans, net, and (ii) origination income, net, divided by loan origination volume during period.
(3)		Pull-through weighted gain on sale margin represents the total of (i) gain on origination and sale of loans, net, and (ii) origination income, net, divided by the pull-through weighted rate lock volume.
(4)		See "Non-GAAP Financial Measures" for a discussion of Non-GAAP Financial Measures and a reconciliation of these metrics to their closest GAAP measure.

Year-over-Year Operational Highlights

Non-volume related expenses decreased $11.4 million from the third quarter of 2023, primarily due to lower general and administrative expenses, offset somewhat by higher headcount related salary expenses and marketing costs.
Accrued a net benefit of $18.9 million primarily associated with expected insurance proceeds related to the settlement of class-action litigation related to the first quarter Cybersecurity Incident.
Incurred restructuring and impairment charges totaling $1.9 million, a decrease of $0.4 million from the third quarter of 2023.
Pull-through weighted lock volume of $6.7 billion for the third quarter of 2024, an increase of $1.1 billion or 19% from the third quarter of 2023.
Loan origination volume for the third quarter of 2024 was $6.7 billion, an increase of $0.6 billion or 9% from the third quarter of 2023.
Purchase volume totaled 66% of total loans originated during the third quarter, down slightly from 71% during the third quarter of 2023.
Our preliminary organic refinance consumer direct recapture rate¹ increased to 71% from the third quarter 2023’s recapture rate of 69%.
Net income for the third quarter of 2024 of $2.7 million as compared to net loss of $34.3 million in the third quarter of 2023. Net income increased primarily due to higher revenue from increased volume and pull-through weighted gain on sale margin.
Adjusted net income for the third quarter of 2024 was $7.1 million as compared to adjusted net loss of $29.2 million for the third quarter of 2023.

Outlook for the fourth quarter of 2024

Origination volume of between $6 billion and $8 billion.
Pull-through weighted rate lock volume of between $5.5 billion and $7.5 billion.
Pull-through weighted gain on sale margin of between 285 basis points and 305 basis points.

Servicing

	Three Months Ended									Nine Months Ended
Servicing Revenue Data: ($ in thousands) (Unaudited)	Sep 30, 2024			Jun 30, 2024			Sep 30, 2023			Sep 30, 2024			Sep 30, 2023
Due to collection/realization of cash flows	$	(41,498	)	$	(42,285	)	$	(38,502	)	$	(119,783	)	$	(114,777	)

Due to changes in valuation inputs or assumptions		(52,557	)		15,623			68,651			(8,690	)		73,422
Realized gain (loss) on sale of servicing rights		32			(3,057	)		5,247			(2,980	)		12,411
Net gain (loss) from derivatives hedging servicing rights		37,624			(25,183	)		(69,353	)		(23,876	)		(96,290	)
Change in fair value of servicing rights, net of hedging gains and losses		(14,901	)		(12,617	)		4,545			(35,546	)		(10,457	)
Other realized losses on sales of servicing rights ⁽¹⁾		(164	)		(5,885	)		(1,731	)		(7,290	)		(1,734	)
Changes in fair value of servicing rights, net	$	(56,563	)	$	(60,787	)	$	(35,688	)	$	(162,619	)	$	(126,968	)

Servicing fee income ⁽²⁾	$	124,133		$	125,082		$	120,911		$	373,273		$	360,329

(1)		Includes the (provision) recovery for sold MSRs and broker fees.
(2)		Servicing fee income for the three and nine months ended September 30, 2023, has been adjusted to incorporate earnings credits, which were previously classified as part of net interest income.

_________________________________

¹ We define organic refinance consumer direct recapture rate as the total unpaid principal balance ("UPB") of loans in our servicing portfolio that are paid in full for purposes of refinancing the loan on the same property, with the Company acting as lender on both the existing and new loan, divided by the UPB of all loans in our servicing portfolio that paid in full for the purpose of refinancing the loan on the same property. The recapture rate is finalized following the publication date of this release when external data becomes available.

	Three Months Ended									Nine Months Ended
Servicing Rights, at Fair Value: ($ in thousands) (Unaudited)	Sep 30, 2024			Jun 30, 2024			Sep 30, 2023			Sep 30, 2024			Sep 30, 2023
Balance at beginning of period	$	1,566,463		$	1,970,164		$	1,998,762		$	1,985,718		$	2,025,136
Additions		62,039			66,115			80,068			176,529			215,229
Sales proceeds		(8,466	)		(439,199	)		(73,972	)		(503,777	)		(171,167	)
Changes in fair value:
Due to changes in valuation inputs or assumptions		(52,557	)		15,623			68,651			(8,690	)		73,422
Due to collection/realization of cash flows		(41,498	)		(42,285	)		(38,502	)		(119,783	)		(114,777	)
Realized gains (losses) on sales of servicing rights		32			(3,955	)		3,647			(3,984	)		10,811
Total changes in fair value		(94,023	)		(30,617	)		33,796			(132,457	)		(30,544	)
Balance at end of period ⁽¹⁾	$	1,526,013		$	1,566,463		$	2,038,654		$	1,526,013		$	2,038,654

(1)

Balances are net of $16.7 million, $16.7 million, and $14.7 million of servicing rights liability as of September 30, 2024, June 30, 2024, and September 30, 2023, respectively.

										% Change
Servicing Portfolio Data: ($ in thousands) (Unaudited)	Sep 30, 2024			Jun 30, 2024			Sep 30, 2023			Sep-24 vs Jun-24		Sep-24 vs Sep-23
Servicing portfolio (unpaid principal balance)	$	114,915,206		$	114,278,549		$	143,959,705		0.6	%	(20.2	)%

Total servicing portfolio (units)		409,344			403,302			490,191		1.5		(16.5	)

60+ days delinquent ($)	$	1,654,955		$	1,457,098		$	1,235,443		13.6		34.0
60+ days delinquent (%)		1.4	%		1.3	%		0.9	%

Servicing rights, net to UPB		1.3	%		1.4	%		1.4	%

Balance Sheet Highlights
							% Change
($ in thousands) (Unaudited)	Sep 30, 2024		Jun 30, 2024		Sep 30, 2023		Sep-24 vs Jun-24		Sep-24 vs Sep-23
Cash and cash equivalents	$	483,048	$	533,153	$	717,196	(9.4	)%	(32.6	)%
Loans held for sale, at fair value		2,790,284		2,377,987		2,070,748	17.3		34.7
Loans held for investment, at fair value		122,066		120,287		—	1.5		NM
Servicing rights, at fair value		1,542,720		1,583,128		2,053,359	(2.6	)	(24.9	)
Total assets		6,417,627		5,942,777		6,078,529	8.0		5.6
Warehouse and other lines of credit		2,565,713		2,213,128		1,897,859	15.9		35.2
Total liabilities		5,825,578		5,363,839		5,309,594	8.6		9.7
Total equity		592,049		578,938		768,935	2.3		(23.0	)

An increase in loans held for sale at September 30, 2024, resulted in a corresponding increase in the balance on our warehouse lines of credit. Total funding capacity with our lending partners was $3.1 billion at September 30, 2024, and $3.9 billion at September 30, 2023. Available borrowing capacity was $0.5 billion at September 30, 2024.

Consolidated Statements of Operations
($ in thousands except per share data)	Three Months Ended									Nine Months Ended
	Sep 30, 2024			Jun 30, 2024			Sep 30, 2023			Sep 30, 2024			Sep 30, 2023
	(Unaudited)									(Unaudited)
REVENUES:
Interest income	$	38,673		$	35,052		$	37,253		$	104,650		$	98,271
Interest expense		(39,488	)		(35,683	)		(36,770	)		(106,837	)		(96,459	)
Net interest (expense) income		(815	)		(631	)		483			(2,187	)		1,812

Gain on origination and sale of loans, net		198,027			166,920			148,849			481,007			411,336
Origination income, net		23,675			19,494			17,740			56,775			48,088
Servicing fee income		124,133			125,082			120,911			373,273			360,329
Change in fair value of servicing rights, net		(56,563	)		(60,787	)		(35,688	)		(162,619	)		(126,968	)
Other income		26,141			15,312			13,366			56,523			50,798
Total net revenues		314,598			265,390			265,661			802,772			745,395

EXPENSES:
Personnel expense		161,330			141,036			141,432			436,683			440,258
Marketing and advertising expense		36,282			31,175			33,894			95,811			104,520
Direct origination expense		23,120			21,550			15,749			62,841			50,352
General and administrative expense		22,984			73,160			46,522			153,889			157,473
Occupancy expense		4,800			5,204			5,903			15,113			18,083
Depreciation and amortization		8,931			8,955			10,592			27,329			31,339
Servicing expense		8,427			8,467			8,532			25,155			19,116
Other interest expense		45,129			53,000			42,504			144,676			128,619
Total expenses		311,003			342,547			305,128			961,497			949,760

Income (loss) before income taxes		3,595			(77,157	)		(39,467	)		(158,725	)		(204,365	)
Income tax expense (benefit)		923			(11,304	)		(5,205	)		(24,040	)		(28,622	)
Net income (loss)		2,672			(65,853	)		(34,262	)		(134,685	)		(175,743	)
Net income (loss) attributable to noncontrolling interests		1,303			(33,642	)		(17,663	)		(69,588	)		(92,793	)
Net income (loss) attributable to loanDepot, Inc.	$	1,369		$	(32,211	)	$	(16,599	)	$	(65,097	)	$	(82,950	)

Basic income (loss) per share	$	0.01		$	(0.18	)	$	(0.09	)	$	(0.36	)	$	(0.48	)
Diluted income (loss) per share	$	0.01		$	(0.18	)	$	(0.09	)	$	(0.36	)	$	(0.48	)

Weighted average shares outstanding
Basic		185,385,271			182,324,046			175,962,804			183,041,489.00			173,568,986.00
Diluted		332,532,984			182,324,046			175,962,804			183,041,489.00			173,568,986.00

Consolidated Balance Sheets
($ in thousands)	Sep 30, 2024		Jun 30, 2024		Dec 31, 2023
	(Unaudited)
ASSETS
Cash and cash equivalents	$	483,048	$	533,153	$	660,707
Restricted cash		95,593		98,057		85,149
Loans held for sale, at fair value		2,790,284		2,377,987		2,132,880
Loans held for investment, at fair value		122,066		120,287		—
Derivative assets, at fair value		68,647		59,779		93,574
Servicing rights, at fair value		1,542,720		1,583,128		1,999,763
Trading securities, at fair value		92,324		89,477		92,901
Property and equipment, net		62,974		64,631		70,809
Operating lease right-of-use asset		23,020		24,549		29,433
Loans eligible for repurchase		860,300		740,238		711,371
Investments in joint ventures		17,899		17,905		20,363
Other assets		258,752		233,586		254,098
Total assets	$	6,417,627	$	5,942,777	$	6,151,048

LIABILITIES AND EQUITY
LIABILITIES:
Warehouse and other lines of credit	$	2,565,713	$	2,213,128	$	1,947,057
Accounts payable and accrued expenses		381,543		375,319		379,971
Derivative liabilities, at fair value		22,143		17,856		84,962
Liability for loans eligible for repurchase		860,300		740,238		711,371
Operating lease liability		38,538		41,896		49,192
Debt obligations, net		1,957,341		1,975,402		2,274,011
Total liabilities		5,825,578		5,363,839		5,446,564
EQUITY:
Total equity		592,049		578,938		704,484
Total liabilities and equity	$	6,417,627	$	5,942,777	$	6,151,048

Loan Origination and Sales Data
($ in thousands) (Unaudited)	Three Months Ended						Nine Months Ended
($ in thousands) (Unaudited)	Sep 30, 2024		Jun 30, 2024		Sep 30, 2023		Sep 30, 2024		Sep 30, 2023
Loan origination volume by type:
Conventional conforming	$	3,254,702	$	3,232,905	$	3,158,107	$	8,991,282	$	9,375,605
FHA/VA/USDA		2,564,827		2,271,104		2,354,630		6,489,956		6,371,168
Jumbo		300,086		229,379		126,408		646,787		405,551
Other		539,714		357,246		443,998		1,180,289		1,148,699
Total	$	6,659,329	$	6,090,634	$	6,083,143	$	17,308,314	$	17,301,023

Loan origination volume by purpose:
Purchase	$	4,378,575	$	4,383,145	$	4,337,476	$	12,057,993	$	12,403,166
Refinance - cash out		1,954,071		1,562,827		1,660,578		4,660,580		4,599,564
Refinance - rate/term		326,683		144,662		85,089		589,741		298,293
Total	$	6,659,329	$	6,090,634	$	6,083,143	$	17,308,314	$	17,301,023

Loans sold:
Servicing retained	$	3,818,375	$	4,011,399	$	4,175,126	$	10,816,315	$	11,396,678
Servicing released		2,487,589		1,893,515		2,092,762		5,833,916		6,345,660
Total	$	6,305,964	$	5,904,914	$	6,267,888	$	16,650,231	$	17,742,338

Third Quarter Earnings Call

Management will host a conference call and live webcast today at 5:00 p.m. ET on loanDepot’s Investor Relations website, investors.loandepot.com, to discuss the Company’s earnings results.

The conference call can also be accessed by dialing (800) 715-9871, Conference ID: 9881136. Please call five minutes in advance to ensure that you are connected prior to the call. A webcast can also be accessed at https://events.q4inc.com/attendee/479196723.

A replay of the webcast will be made available on the Investor Relations website following the conclusion of the event.

For more information about loanDepot, please visit the company’s Investor Relations website: investors.loandepot.com.

Non-GAAP Financial Measures

To provide investors with information in addition to our results as determined by GAAP, we disclose certain non-GAAP measures to assist investors in evaluating our financial results. We believe these non-GAAP measures provide useful information to investors regarding our results of operations because each measure assists both investors and management in analyzing and benchmarking the performance and value of our business. They facilitate company-to-company operating performance comparisons by backing out potential differences caused by variations in hedging strategies, changes in valuations, capital structures (affecting interest expense on non-funding debt), taxation, the age and book depreciation of facilities (affecting relative depreciation expense), and other cost or benefit items which may vary for different companies for reasons unrelated to operating performance. These non-GAAP measures include our Adjusted Total Revenue, Adjusted Net Income (Loss), Adjusted Diluted Earnings (Loss) Per Share (if dilutive), and Adjusted EBITDA (LBITDA). We exclude from these non-GAAP financial measures the change in fair value of MSRs, gains (losses) from the sale of MSRs and related hedging gains and losses that represent realized and unrealized adjustments resulting from changes in valuation, mostly due to changes in market interest rates, and are not indicative of the Company’s operating performance or results of operation. Beginning in the second quarter of 2024, we began to include the gains (losses) from the sale of MSRs in valuation changes in servicing rights, net of hedging gains and losses to appropriately capture all valuation changes in MSRs up to and including the sales date. Prior periods have been revised to conform with this new presentation. We also exclude stock-based compensation expense, which is a non-cash expense, expenses directly related to the Cybersecurity Incident, net of expected insurance recoveries, including costs to investigate and remediate the Cybersecurity Incident, the costs of customer notifications and identity protection, professional fees, including legal expenses, litigation settlement costs, and commission guarantees, gains or losses on extinguishment of debt and disposal of fixed assets, non-cash goodwill impairment, and other impairment charges to intangible assets and operating lease right-of-use assets, as well as certain costs associated with our restructuring efforts, as management does not consider these costs to be indicative of our performance or results of operations. Adjusted EBITDA (LBITDA) includes interest expense on funding facilities, which are recorded as a component of "net interest income (expense)," as these expenses are a direct operating expense driven by loan origination volume. By contrast, interest expense on our non-funding debt is a function of our capital structure and is therefore excluded from Adjusted EBITDA (LBITDA). Adjustments for income taxes are made to reflect historical results of operations on the basis that it was taxed as a corporation under the Internal Revenue Code, and therefore subject to U.S. federal, state and local income taxes. Adjustments to Diluted Weighted Average Shares Outstanding assumes the pro forma conversion of weighted average Class C shares to Class A common stock. These non-GAAP measures have limitations as analytical tools and should not be considered in isolation or as a substitute for revenue, net income, or any other operating performance measure calculated in accordance with GAAP, and may not be comparable to a similarly titled measure reported by other companies. Some of these limitations are:

they do not reflect every cash expenditure, future requirements for capital expenditures or contractual commitments;
Adjusted EBITDA (LBITDA) does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payment on our debt;
although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced or require improvements in the future, and Adjusted Total Revenue, Adjusted Net Income (Loss), and Adjusted EBITDA (LBITDA) do not reflect any cash requirement for such replacements or improvements; and
they are not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows.

Because of these limitations, Adjusted Total Revenue, Adjusted Net Income (Loss), Adjusted Diluted Earnings (Loss) Per Share, and Adjusted EBITDA (LBITDA) are not intended as alternatives to total revenue, net income (loss), net income (loss) attributable to the Company, or Diluted Earnings (Loss) Per Share or as an indicator of our operating performance and should not be considered as measures of discretionary cash available to us to invest in the growth of our business or as measures of cash that will be available to us to meet our obligations. We compensate for these limitations by using Adjusted Total Revenue, Adjusted Net Income (Loss), Adjusted Diluted Earnings (Loss) Per Share, and Adjusted EBITDA (LBITDA) along with other comparative tools, together with U.S. GAAP measurements, to assist in the evaluation of operating performance. See below for a reconciliation of these non-GAAP measures to their most comparable U.S. GAAP measures.

Reconciliation of Total Revenue to Adjusted Total Revenue ($ in thousands) (Unaudited)	Three Months Ended							Nine Months Ended
	Sep 30, 2024		Jun 30, 2024		Sep 30, 2023			Sep 30, 2024		Sep 30, 2023
Total net revenue	$	314,598	$	265,390	$	265,661		$	802,772	$	745,395
Valuation changes in servicing rights, net of hedging gains and losses⁽¹⁾		14,901		12,617		(4,545	)		35,546		10,457
Adjusted total revenue	$	329,499	$	278,007	$	261,116		$	838,318	$	755,852

(1)

Represents the change in the fair value of servicing rights due to changes in valuation inputs or assumptions, net of gains or losses from derivatives hedging servicing rights. Beginning in the second quarter of 2024, we began to include the gains (losses) from the sale of MSRs in valuation changes in servicing rights, net of hedging gains and losses to appropriately capture all valuation changes in MSRs up to and including the sales date. Prior periods have been revised to conform with this new presentation.

Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) ($ in thousands) (Unaudited)	Three Months Ended									Nine Months Ended
	Sep 30, 2024			Jun 30, 2024			Sep 30, 2023			Sep 30, 2024			Sep 30, 2023
Net income (loss) attributable to loanDepot, Inc.	$	1,369		$	(32,211	)	$	(16,599	)	$	(65,097	)	$	(82,950	)
Net income (loss) from the pro forma conversion of Class C common shares to Class A common stock⁽¹⁾		1,303			(33,642	)		(17,663	)		(69,588	)		(92,793	)
Net income (loss)		2,672			(65,853	)		(34,262	)		(134,685	)		(175,743	)
Adjustments to the (provision) benefit for income taxes⁽²⁾		(326	)		8,838			4,845			17,982			25,054
Tax-effected net income (loss)		2,346			(57,015	)		(29,417	)		(116,703	)		(150,689	)
Valuation changes in servicing rights, net of hedging gains and losses⁽³⁾		14,901			12,617			(4,545	)		35,546			10,457
Stock-based compensation expense		8,200			5,898			3,940			18,952			15,619
Restructuring charges⁽⁴⁾		1,853			3,127			2,007			7,105			8,357
Cybersecurity incident⁽⁵⁾		(18,880	)		26,942			—			22,760			—
Loss (gain) on extinguishment of debt		—			5,680			(1,651	)		5,680			(1,690	)
Loss (gain) on disposal of fixed assets		3			—			93			(25	)		1,105
Other impairment⁽⁶⁾		10			1,193			129			1,202			470
Tax effect of adjustments⁽⁷⁾		(1,356	)		(14,332	)		233			(22,826	)		(8,046	)
Adjusted net income (loss)	$	7,077		$	(15,890	)	$	(29,211	)	$	(48,309	)	$	(124,417	)

(1)		Reflects net income (loss) to Class A common stock and Class D common stock from the pro forma exchange of Class C common stock.
(2)		loanDepot, Inc. is subject to federal, state and local income taxes. Adjustments to the (provision) benefit for income taxes reflect the income tax rates below, and the pro forma assumption that loanDepot, Inc. owns 100% of LD Holdings.

	Three Months Ended			Nine Months Ended
	Sep 30, 2024	Jun 30, 2024	Sep 30, 2023	Sep 30, 2024	Sep 30, 2023
Statutory U.S. federal income tax rate	21.00 %	21.00 %	21.00 %	21.00 %	21.00 %
State and local income taxes (net of federal benefit)	4.01 %	5.27 %	6.43 %	4.84 %	6.00 %
Effective income tax rate	25.01 %	26.27 %	27.43 %	25.84 %	27.00 %

(3)		Represents the change in the fair value of servicing rights due to changes in valuation inputs or assumptions, net of gains or losses from derivatives hedging servicing rights, and gains (losses) from the sale of MSRs. Beginning in the second quarter of 2024, we began to include the gains (losses) from the sale of MSRs in valuation changes in servicing rights, net of hedging gains and losses to appropriately capture all valuation changes in MSRs up to and including the sales date. Prior periods have been revised to conform with this new presentation.
(4)		Reflects employee severance expense and professional services associated with restructuring efforts subsequent to the announcement of Vision 2025 in July 2022.
(5)		Represents expenses directly related to the Cybersecurity Incident, net of expected insurance recoveries, including costs to investigate and remediate the Cybersecurity Incident, the costs of customer notifications and identity protection, professional fees including legal expenses, litigation settlement costs, and commission guarantees. During the three months ended September 30, 2024, the Company recorded a $20.0 million receivable for reimbursement from its insurers. During the nine months ended September 30, 2024, the Company recorded $35.0 million for an insurance reimbursement and receivable, and an accrual of $25.0 million in connection with class action litigation related to the Cybersecurity Incident.
(6)		Represents lease impairment on corporate and retail locations.
(7)		Amounts represent the income tax effect using the aforementioned effective income tax rates, excluding certain discrete tax items.

Reconciliation of Adjusted Diluted Weighted Average Shares Outstanding to Diluted Weighted Average Shares Outstanding ($ in thousands except per share data) (Unaudited)	Three Months Ended								Nine Months Ended
	Sep 30, 2024		Jun 30, 2024			Sep 30, 2023			Sep 30, 2024			Sep 30, 2023
Net income (loss) attributable to loanDepot, Inc.	$	1,369	$	(32,211	)	$	(16,599	)	$	(65,097	)	$	(82,950	)
Adjusted net income (loss)		7,077		(15,890	)		(29,211	)		(48,309	)		(124,417	)

Share Data:
Diluted weighted average shares of Class A and Class D common stock outstanding		332,532,984		182,324,046			175,962,804			183,041,489			173,568,986
Assumed pro forma conversion of weighted average Class C shares to Class A common stock ⁽¹⁾		—		142,907,533			147,171,089			142,333,213			148,741,661
Adjusted diluted weighted average shares outstanding		332,532,984		325,231,579			323,133,893			325,374,702			322,310,647

(1)

Reflects the assumed pro forma exchange and conversion of anti-dilutive Class C common shares.

Reconciliation of Net Income (Loss) to Adjusted EBITDA (LBITDA) ($ in thousands) (Unaudited)	Three Months Ended									Nine Months Ended
	Sep 30, 2024			Jun 30, 2024			Sep 30, 2023			Sep 30, 2024			Sep 30, 2023
Net income (loss)	$	2,672		$	(65,853	)	$	(34,262	)	$	(134,685	)	$	(175,743	)
Interest expense - non-funding debt ⁽¹⁾		45,129			53,000			42,504			144,676			128,619
Income tax expense (benefit)		923			(11,304	)		(5,205	)		(24,040	)		(28,622	)
Depreciation and amortization		8,931			8,955			10,592			27,329			31,339
Valuation changes in servicing rights, net of hedging gains and losses⁽²⁾		14,901			12,617			(4,545	)		35,546			10,457
Stock-based compensation expense		8,200			5,898			3,940			18,952			15,619
Restructuring charges⁽³⁾		1,853			3,127			2,007			7,105			8,357
Cybersecurity incident⁽⁴⁾		(18,880	)		26,942			—			22,760			—
Loss (gain) on disposal of fixed assets		3			—			93			(25	)		1,105
Other impairment⁽⁵⁾		10			1,193			129			1,202			470
Adjusted EBITDA (LBITDA)	$	63,742		$	34,575		$	15,253		$	98,820		$	(8,399	)

(1)		Represents other interest expense, which includes gain or loss on extinguishment of debt and amortization of debt issuance costs and debt discount, in the Company’s consolidated statements of operations.
(2)		Represents the change in the fair value of servicing rights due to changes in valuation inputs or assumptions, net of gains or losses from derivatives hedging servicing rights, and gains (losses) from the sale of MSRs. Beginning in the second quarter of 2024, we began to include the gains (losses) from the sale of MSRs in valuation changes in servicing rights, net of hedging gains and losses to appropriately capture all valuation changes in MSRs up to and including the sales date. Prior periods have been revised to conform with this new presentation.
(3)		Reflects employee severance expense and professional services associated with restructuring efforts subsequent to the announcement of Vision 2025 in July 2022.
(4)		Represents expenses, directly related to the Cybersecurity Incident, net of expected insurance recoveries, that occurred in the first quarter of 2024, including costs to investigate and remediate the Cybersecurity Incident, the costs of customer notifications and identity protection, professional fees including legal expenses, litigation settlement costs, and commission guarantees. During the three months ended September 30, 2024, the Company recorded a $20.0 million receivable for reimbursement from its insurers. During the nine months ended September 30, 2024, the Company recorded $35.0 million for an insurance reimbursement and receivable, and an accrual of $25.0 million in connection with class action litigation related to the Cybersecurity Incident.
(5)		Represents lease impairment on corporate and retail locations.

Forward-Looking Statements

This press release may contain "forward-looking statements," which reflect loanDepot's current views with respect to, among other things, our business strategies, including Project North Star, our progress toward run-rate profitability, ongoing cost management and productivity programs, our HELOC product, financial condition and liquidity, competitive position, industry and regulatory environment, potential growth opportunities, the effects of competition, the impact of the Cybersecurity Incident, operations and financial performance. These forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and may contain the words "outlook," "potential," "believe," "anticipate," "expect," "intend," "plan," "predict," "estimate," "project," "will be," "will continue," "will likely result," or other similar words and phrases or future or conditional verbs such as "will," "may," "might," "should," "would," or "could" and the negatives of those terms. These forward-looking statements are based on current available operating, financial, economic and other information, and are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict, including but not limited to, the following: our ability to achieve the expected benefits of Project North Star and the success of other business initiatives; our ability to achieve run-rate profitability; our loan production volume; our ability to maintain an operating platform and management system sufficient to conduct our business; our ability to maintain warehouse lines of credit and other sources of capital and liquidity; impacts of cybersecurity incidents, cyberattacks, information or security breaches and technology disruptions or failures, of ours or of our third party vendors; the outcome of legal proceedings to which we are a party; our ability to reach a definitive settlement agreement related to the Cybersecurity Incident; adverse changes in macroeconomic and U.S residential real estate and mortgage market conditions, including changes in interest rates; changing federal, state and local laws, as well as changing regulatory enforcement policies and priorities; and other risks detailed in the "Risk Factors" section of loanDepot, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2023, and Quarterly Reports on Form 10-Q as well as any subsequent filings with the Securities and Exchange Commission. Therefore, current plans, anticipated actions, and financial results, as well as the anticipated development of the industry, may differ materially from what is expressed or forecasted in any forward-looking statement. loanDepot does not undertake any obligation to publicly update or revise any forward-looking statement to reflect future events or circumstances, except as required by applicable law.

About loanDepot

loanDepot (NYSE: LDI) is a leading provider of lending solutions that make the American dream of homeownership more accessible and achievable for all, especially the increasingly diverse communities of first-time homebuyers, through a broad suite of lending and real estate services that simplify one of life's most complex transactions. Since its launch in 2010, the company has been recognized as an innovator, using its industry-leading technology to deliver a superior customer experience. Our digital-first approach makes it easier, faster and less stressful to purchase or refinance a home. Today, as one of the largest non-bank lenders in the country, loanDepot and its mellohome operating unit offer an integrated platform of lending, loan servicing, real estate and home services that support customers along their entire homeownership journey. Headquartered in Southern California and with hundreds of local market offices nationwide, loanDepot’s passionate team is dedicated to making a positive difference in the lives of their customers every day.

LDI-IR

View source version on businesswire.com: https://www.businesswire.com/news/home/20241105434727/en/

Contacts

Investor Relations Contact:
Gerhard Erdelji
Senior Vice President, Investor Relations
(949) 822-4074
gerdelji@loandepot.com

Media Contact:
Rebecca Anderson
Senior Vice President, Communications & Public Relations
(949) 822-4024
rebeccaanderson@loandepot.com

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