UWM Holdings Corporation Announces

PONTIAC, MI, February 28, 2024 - UWM Holdings Corporation (NYSE: UWMC) (the "Company"), the publicly traded indirect parent of United Wholesale Mortgage (“UWM”), today announced its results for the fourth quarter and full year ended December 31, 2023. Total loan origination volume for the fourth quarter 2023 was $24.4 billion, of which $20.7 billion was purchase volume. Total loan originations for full year 2023 were $108.3 billion, of which $93.9 billion was purchase volume. The Company reported 4Q23 net loss of $461.0 million, inclusive of a $634.4 million decline in fair value of MSRs, and diluted loss per share of $0.29. The Company reported full year 2023 loss of $69.8 million, inclusive of a $854.1 million decline in fair value of MSRs, and diluted loss per share of $0.14.

Mat Ishbia, Chairman and CEO of UWMC, said, "2023 was one of the best years in our company history. We were the number one mortgage originator in America, number one in purchase origination again, and, nine years running, the number one wholesale lender. We continue to be operationally profitable, the true measure of a mortgage originator's health, while our financial loss was driven by the MSR markdown which is a result of interest rate movements. Our recipe for success has not and will not change and we are currently doubling down on investing in our people, our products and our technology so that we can continue to provide the broker channel with the tools needed to win. I believe that 2024 is a tremendous opportunity for both UWM and the broker channel."

•Originations of $24.4 billion in 4Q23, compared to $29.7 billion in 3Q23 and $25.1 billion in 4Q22

•Purchase originations of $20.7 billion in 4Q23, compared to $25.9 billion in 3Q23 and $21.7 billion in 4Q22

•Total gain margin of 92 bps in 4Q23 compared to 97 bps in 3Q23 and 51 bps in 4Q22

•Net loss of $461.0 million in 4Q23 compared to net income of $301.0 million in 3Q23 and net loss of $62.5 million 4Q22

•Adjusted EBITDA of $99.6 million in 4Q23 compared to $112.1 million in 3Q23 and $60.4 million in 4Q22

•Total equity of $2.5 billion at December 31, 2023, compared to $3.1 billion at September 30, 2023, and $3.2 billion at December 31, 2022

•Unpaid principal balance of MSRs of $299.5 billion with a WAC of 4.43% at December 31, 2023, compared to $281.4 billion with a WAC of 4.20% at September 30, 2023, and $312.5 billion with a WAC of 3.64% at December 31, 2022

•Ended 4Q23 with approximately $2.2 billion of available liquidity, including $497.5 million of cash, and $1.75 billion of available borrowing capacity, which includes $1.25 billion under lines of credit secured by agency and Ginnie Mae MSRs, and $500 million under an unsecured line of credit

•    Originations of $108.3 billion in 2023, compared to $127.3 billion in 2022

•    Record purchase originations of $93.9 billion in 2023, compared to $90.8 billion in 2022

•    Net loss of $69.8 million in 2023, as compared to $931.9 million of net income in 2022

•    Total gain margin of 92 bps in 2023 compared to 77 bps in 2022

Production and Income Statement Highlights (dollars in thousands, except per share amounts)

 

(1)Key operational metric (see discussion below).

(2)Represents total loan production income divided by loan origination volume.

(3)Non-GAAP metric (see discussion and reconciliations below).

Balance Sheet Highlights as of Period-end (dollars in thousands)

						Q4 2023						Q3 2023						Q4 2022
Cash and cash equivalents						$	497,468					$	729,616					$	704,898
Mortgage loans at fair value						5,449,884						5,560,039						7,134,960
Mortgage servicing rights						4,026,136						4,352,219						4,453,261
Total assets						11,871,854						12,204,137						13,600,625
Non-funding debt (1)						2,862,759						2,617,903						2,880,178
Total equity						2,474,671						3,092,111						3,171,693
Non-funding debt to equity (1)						1.16						0.85						0.91

 (1) Non-GAAP metric (see discussion and reconciliations below).

Mortgage Servicing Rights (dollars in thousands)

						Q4 2023						Q3 2023						Q4 2022
Unpaid principal balance						$	299,456,189					$	281,373,662					$	312,454,025
Weighted average interest rate						4.43		%				4.20		%				3.64		%
Weighted average age (months)						21						20						16

•Launched Memory Maker, UWM’s tool for independent mortgage brokers to send their choice of thank you items to borrowers and real estate agents, leaving a lasting impression long after a loan is closed

•Enhanced PA+, now allowing independent mortgage brokers and their processors more flexibility in choosing which parts of the loan process they would like a UWM Loan Coordinator to facilitate

•Enhancements to Investor Flex, UWM’s Debt Service Coverage Ratio (“DSCR”) product now allows borrowers to close in a Limited Liability Company (LLC), giving borrowers an additional option to separate their personal properties and investment properties

•Achieved Net Promoter Score of +86.5 in 4Q23.

•Our 1.15% 60+ days delinquency as of December 31, 2023, was significantly better than the industry average of 1.78% (Source: Mortgage Bankers Association, as of Q4 2023).

Product and Investor Mix - Unpaid Principal Balance of Originations (dollars in thousands)

We anticipate first quarter production to be in the $22 to $28 billion range, with gain margin from 80 to 105 basis points.

Subsequent to December 31, 2023, for the thirteenth consecutive quarter, the Company's Board of Directors declared a cash dividend of $0.10 per share on the outstanding shares of Class A common stock. The dividend is payable on April 11, 2024, to stockholders of record at the close of business on March 20, 2024. Additionally, the Board approved a proportional distribution to SFS Corp., which is payable on or about April 11, 2024.

As previously announced, the Company will hold a conference call for financial analysts and investors on Wednesday, February 28, 2024 at 10:30 AM ET to review the results and answer questions. Interested parties may register for a toll-free dial-in number by visiting:

https://registrations.events/direct/Q4I3794250

Please dial in at least 15 minutes in advance to ensure a timely connection to the call. Audio webcast, taped replay and a transcript will be available on the Company's investor relations website at https://investors.uwm.com/.

“Loan origination volume” and “Total gain margin” are key operational metrics that the Company's management uses to evaluate the performance of the business. “Loan origination volume” is the aggregate principal of the residential mortgage loans originated by the Company during a period. “Total gain margin” represents total loan production income divided by loan origination volume for the applicable periods.

The Company's net income does not reflect the income tax provision that would otherwise be reflected if 100% of the economic interest in UWM was owned by the Company. Therefore, for comparison purposes, the Company provides “Adjusted net income (loss),” which is our pre-tax income (loss) together with an adjusted income tax provision (benefit), which is calculated as the provision for income taxes plus the tax effects of net income attributable to non-controlling interest determined using a blended statutory effective tax rate. “Adjusted net income (loss)” is a non-GAAP metric. "Adjusted diluted EPS" is defined as "Adjusted net income (loss)" divided by the weighted average number of shares of Class A common stock outstanding for the applicable period, assuming the exchange and conversion of all outstanding Class D common stock for Class A common stock, and is calculated and presented for periods in which the assumed exchange and conversion of Class D common stock to Class A common stock is anti-dilutive to EPS.

We also disclose Adjusted EBITDA, which we define as earnings (loss) before interest expense on non-funding debt, provision for income taxes, depreciation and amortization, stock-based compensation expense, the change in fair value of MSRs due to valuation inputs or assumptions, the impact of non-cash deferred compensation expense, the change in fair value of the Public and Private Warrants, the change in Tax Receivable Agreement liability and the change in fair value of retained investment securities. We exclude the change in Tax Receivable Agreement liability, the change in fair value of the Public and Private Warrants, the change in fair value of retained investment securities, and the change in fair value of MSRs due to valuation inputs or assumptions, as these represent non-cash, non-realized adjustments to our earnings, which is not indicative of our performance or results of operations.

Adjusted EBITDA includes interest expense on funding facilities, which are recorded as a component of interest expense, as these expenses are a direct operating expense driven by loan origination volume. By contrast, interest expense on non-funding debt is a function of our capital structure and is therefore excluded from Adjusted EBITDA.

In addition, we disclose “Non-funding debt” and the “Non-funding debt to equity ratio” as a non-GAAP metric. We define “Non-funding debt” as the total of the Company's senior notes, lines of credit, borrowings against investment securities, equipment note payable, and finance leases and the “Non-funding debt-to-equity ratio” as total non-funding debt divided by the Company’s total equity.

Management believes that these non-GAAP metrics provide useful information to investors. These measures are not financial measures calculated in accordance with GAAP and should not be considered as a substitute for any other operating performance measure calculated in accordance with GAAP, and may not be comparable to a similarly titled measure reported by other companies.

The following tables set forth the reconciliations of these non-GAAP financial measures to their most directly comparable financial measure calculated in accordance with GAAP (dollars in thousands, except per share amounts):

This press release and our earnings call include forward-looking statements. These forward-looking statements are generally identified by the use of words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict” and similar words indicating that these reflect our views with respect to future events. Forward-looking statements in this press release and our earnings call include statements regarding: (1) our position amongst our competitors and ability to capture market share; (2) our investment in our people, products and technology and the benefits to our results; (3) our beliefs regarding opportunities in 2024 for our business and the broker channel; (4) our beliefs regarding operational profitability; (5) growth of the wholesale and broker channels, the impact of our strategies on such growth and the benefits to our business of such growth; (6) our growth and strategies to remain the leading mortgage lender, and the timing and drivers of that growth; (7) the benefits and liquidity of our MSR portfolio; (8) our beliefs related to the amount and timing of our dividend; (9) our expectations for future market environments, including interest rates, levels of refinance activity and the timing of such market changes; (10) our expectations related to production and margin in the first quarter of 2024; (11) the benefits of our business model, strategies and initiatives, and their impact on our results and the industry; (12) our performance in shifting market conditions and the comparison of such performance against our competitors; (13) our ability to produce results in future years at or above prior levels or expectations, and our strategies for producing such results; (14) our position and ability to capitalize on market opportunities and the impacts to our results; (15) our investments in technology and the impact to our operations, ability to scale and financial results and (16) our purchase production and product portfolio. These statements are based on management’s current expectations, but are subject to risks and uncertainties, many of which are outside of our control, and could cause future events or results to materially differ from those stated or implied in the forward-looking statements, including; (i) UWM’s dependence on macroeconomic and U.S. residential real estate market conditions, including changes in U.S. monetary policies that affect interest rates; (ii) UWM’s reliance on its warehouse and MSR facilities and the risk of a decrease in the value of the collateral underlying certain of its facilities causing an unanticipated margin call; (iii) UWM’s ability to sell loans in the secondary market; (iv) UWM’s dependence on the government-sponsored entities such as Fannie Mae and Freddie Mac; (v) changes in the GSEs, FHA, USDA and VA guidelines or GSE and Ginnie Mae guarantees; (vi) UWM’s dependence on Independent Mortgage Advisors to originate mortgage loans; (vii) the risk that an increase in the value of the MBS UWM sells in forward markets to hedge its pipeline may result in an unanticipated margin call; (viii) UWM’s inability to continue to grow, or to effectively manage the growth of its loan origination volume; (ix) UWM’s ability to continue to attract and retain its broker relationships; (x) UWM’s ability to implement technological innovation; (xi) the occurrence of a data breach or other failure of UWM’s cybersecurity or information security systems; (xii) the occurrence of data breaches or other cybersecurity failures at our third-party sub-servicers or other third-party vendors; (xiii) UWM’s ability to continue to comply with the complex state and federal laws, regulations or practices applicable to mortgage loan origination and servicing in general; and (xiv) other risks and uncertainties indicated from time to time in our filings with the Securities and Exchange Commission including those under “Risk Factors” therein. We wish to caution readers that certain important factors may have affected and could in the future affect our results and could cause actual results for subsequent periods to differ materially from those expressed in any forward-looking statement made by or on behalf of us. We undertake no obligation to update forward-looking statements to reflect events or circumstances after the date hereof.

Headquartered in Pontiac, Michigan, UWM Holdings Corporation (UWMC) is the publicly traded indirect parent of United Wholesale Mortgage, LLC (“UWM”). UWM is the nation’s largest home mortgage lender, despite exclusively originating mortgage loans through the wholesale channel. UWM has been the largest wholesale mortgage lender for nine consecutive years and is the largest purchase lender in the nation. With a culture of continuous innovation of technology and enhanced client experience, UWM leads the market by building upon its proprietary and exclusively licensed technology platforms, superior service and focused partnership with the independent mortgage broker community. UWM originates primarily conforming and government loans across all 50 states and the District of Columbia. For more information, visit uwm.com or call 800-981-8898. NMLS #3038.

This addendum includes the Company's Consolidated Balance Sheets as of December 31, 2023, and the preceding four quarters and Statements of Operations for the quarter ended December 31, 2023, and the preceding four quarters for purposes of providing historical quarterly trending information to investors.

			For the three months ended
			December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022
Revenue
Loan production income			$	225,436		$	288,930		$	280,757		$	205,424		$	129,180
Loan servicing income			206,498			200,428			193,220			218,557			217,225
Change in fair value of mortgage servicing rights			(634,418)			92,909			24,648			(337,287)			(150,808)
Interest income			87,901			94,849			88,895			74,580			106,837
Total revenue, net			(114,583)			677,116			587,520			161,274			302,434
Expenses
Salaries, commissions and benefits			142,515			135,333			131,380			121,003			118,266
Direct loan production costs			27,977			36,184			23,618			16,483			17,396
Marketing, travel, and entertainment			25,600			20,117			21,588			17,210			22,976
Depreciation and amortization			11,472			11,563			11,441			11,670			11,713
General and administrative			38,209			44,904			52,691			34,619			49,668
Servicing costs			29,632			33,640			31,658			36,862			36,809
Interest expense			80,811			93,724			82,437			63,284			114,918
Other expense (income)			(2,391)			(76)			2,703			(241)			(54)
Total expenses			353,825			375,389			357,516			300,890			371,692
Earnings (loss) before income taxes			(468,408)			301,727			230,004			(139,616)			(69,258)
Provision (benefit) for income taxes			(7,452)			734			1,210			(1,003)			(6,774)
Net income (loss)			(460,956)			300,993			228,794			(138,613)			(62,484)
Net income (loss) attributable to non-controlling interest			(433,878)			282,762			221,236			(126,672)			(62,207)
Net income (loss) attributable to UWMC			$	(27,078)		$	18,231		$	7,558		$	(11,941)		$	(277)
Earnings (loss) per share of Class A common stock:
Basic			$	(0.29)		$	0.20		$	0.08		$	(0.13)		$	—
Diluted			$	(0.29)		$	0.15		$	0.08		$	(0.13)		$	(0.03)
Weighted average shares outstanding:
Basic			93,654,269			93,290,736			93,107,133			92,920,794			92,575,549
Diluted			93,654,269			1,596,624,780			93,107,133			92,920,794			1,594,645,336