UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
 CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): November 4, 2021
 


Home Point Capital Inc.
(Exact name of registrant as specified in its charter)
 


Delaware
001-39964
90-1116426
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)

2211 Old Earhart Road, Suite 250
Ann Arbor, Michigan 48105
 (Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (888) 616-6866
 
 
Not applicable
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8−K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
Soliciting material pursuant to Rule 14a−12 under the Exchange Act (17 CFR 240.14a−12)
 
Pre−commencement communications pursuant to Rule 14d−2(b) under the Exchange Act (17 CFR 240.14d−2(b))
 
Pre−commencement communications pursuant to Rule 13e−4(c) under the Exchange Act (17 CFR 240.13e− 4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
 
Trading Symbol
 
Name of each exchange on which
registered
Common Stock, par value $0.0000000072 per share
  HMPT
 
The Nasdaq Stock Market LLC
(The Nasdaq Global Select Market)
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02
Results of Operations and Financial Condition.
 
On November 4, 2021, Home Point Capital Inc. (the “Company”) published an earnings release reporting its financial results for the fiscal quarter ended September 30, 2021. A copy of the earnings release is attached as Exhibit 99.1 hereto and is incorporated by reference herein.
 
The investor presentation materials used on the Company’s earnings call are attached as Exhibit 99.2 hereto and are incorporated by reference herein. On November 4, 2021, the Company posted the materials attached as Exhibits 99.1 and 99.2 on its website (www.investors.homepoint.com).
 
The foregoing information (including Exhibits 99.1 and 99.2 hereto) is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.
 
Item 8.01
Other Events.
 
Supplemental Financial Information
 
On November 4, 2021, the Company made certain historical quarterly financial information (“Supplemental Financial Information”) available through its website (www.investors.homepoint.com). A copy of the Supplemental Financial Information is attached as Exhibit 99.3 hereto and is incorporated by reference herein.
 
The Company’s website and the information contained on, or that can be accessed through, the Company’s website will not be deemed to be incorporated by reference in, and are not considered part of, this Current Report on Form 8-K.
 
Dividend
 
On November 4, 2021, the Company announced that its Board of Directors (the “Board”) declared a cash dividend of $0.04 per share for the third quarter of 2021. This dividend is payable on or about November 30, 2021 to all stockholders of record at the close of business on November 15, 2021. The Board determined to pay a reduced dividend on the Company’s common stock for the third quarter of 2021 compared to the second quarter of 2021 commensurate with the Company's market capitalization. The Board intends to reassess the payment of cash dividends on a quarterly basis.
 
The Company makes no assurance that the Company will continue to pay dividends in the future, or that any dividends will not be reduced or eliminated in the future. Future determinations to declare and pay cash dividends, if any, will be made at the discretion of the Board and will depend on a variety of factors, including applicable laws, the Company’s financial condition, results of operations, contractual restrictions, capital requirements, business prospects, general business or financial market conditions and other factors the Board may deem relevant.
 

Item 9.01
Financial Statements and Exhibits.
 
(d)
Exhibits.
 
Exhibit No.
 
Description
 
Earnings release dated November 4, 2021.
 
Investor presentation materials dated November 4, 2021.
 
Supplemental Financial Information.
104
 
The cover page from this Current Report on Form 8-K, formatted in Inline XBRL.


Signatures
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
HOME POINT CAPITAL INC.
     
Date: November 4, 2021
   
     
 
By:
/s/ Mark E. Elbaum
 
Name:
Mark E. Elbaum
 
Title:
Chief Financial Officer




Exhibit 99.1

PRESS RELEASE 

Home Point Capital Reports Third Quarter 2021 Financial Results

–Quarterly Origination Volume of $21 Billion, Up 14% Year-Over-Year–
–Broker Partner Growth of More Than 50% Year-Over-Year–
–Third Quarter Net Income of $71 Million; $0.51 per Share–
 
ANN ARBOR, Mich., November 4, 2021Home Point Capital Inc. (NASDAQ: HMPT) (“Home Point Capital” or the “Company”), the parent entity of Home Point Financial Corporation (“Homepoint”), today announced its financial results for the third quarter ended September 30, 2021.
 
“Our financial and operating results for the third quarter demonstrate the flexibility of Home Point Capital’s business model and team, particularly as we navigate through a challenging and competitive environment,” said Willie Newman, President and Chief Executive Officer. “We executed on a number of priorities during the third quarter including expanding our broker partner network, continuing to roll out productivity and efficiency initiatives, enhancing Homepoint’s partner and customer experience, and diversifying our capital markets execution alternatives. We remain focused on optimizing our business to create sustainable long-term value for our stakeholders.”
 

 
 
Third Quarter 2021 Financial and Key Performance Indicator Summary
 
($mm, except per share values)
 
For the quarter ended
 
   
9/30/2021
   
6/30/2021
   
9/30/2020
 
                   
Total Funded Origination Volume
 
$
20,796
   
$
25,466
   
$
18,114
 
Total Fallout Adjusted Lock Volume
   
21,894
     
20,365
     
18,590
 
Gain on sale margin (bps)1
   
84
     
58
     
286
 
Servicing portfolio - Units
   
428,622
     
449,029
     
307,236
 
Servicing portfolio - UPB
 
$
125,832
   
$
124,259
   
$
73,951
 
                         
Total  revenue, net
 
$
274.6
   
$
84.4
   
$
510.8
 
Origination segment direct expenses
   
116.5
     
138.0
     
108.1
 
Servicing segment direct expenses
   
17.4
     
18.8
     
13.9
 
Corporate expenses
   
41.4
     
41.2
     
41.3
 
Total expenses
   
175.3
     
198.0
     
163.3
 
Net income (loss)
   
71.2
     
(73.2
)
   
264.1
 
Net income (loss) per share2
 
$
0.51
   
$
(0.53
)
 
$
1.90
 

(1) Calculated as gain on sale divided by Fallout Adjusted Lock Volume. Gain on sale includes gain on loans, net, loan fee income, interest income (expense), net, and loan servicing fees (expense) for the Origination segment.

(2) On January 21, 2021, Home Point Capital effected a stock split of its outstanding common stock pursuant to which the 100 outstanding shares were split into 1,388,601.11 shares each, for a total of 138,860,103 shares of outstanding common stock. As a result, all amounts relating to per share amounts have been retroactively adjusted to reflect this stock split.
 
Third Quarter 2021 Highlights
 

Quarterly funded origination volume of $21 billion, compared to $18 billion in the third quarter of 2020 and $25 billion in the second quarter of 2021.
 

Total revenue, net of $275 million, compared to $511 million in the prior year quarter and more than triple from $84 million in the second quarter of 2021.
 
2

 


Total revenue in the Origination segment of $184 million compared to $532 million in the third quarter of 2020 and $117 million in the second quarter of 2021. Gain on sale margin attributable to channels, before giving effect to the impact of capital markets and other activity, was 73 basis points in the third quarter of 2021, compared to 233 basis points in the third quarter of 2020 and flat versus 74 basis points in the second quarter of 2021.
 

Total expenses of $175 million for the third quarter of 2021 were up 7% versus the year-ago quarter and were down 11% compared to the second quarter of 2021. The sequential quarter decrease in total expenses was driven by a 16% reduction in Origination segment direct expenses and a 7% decline in Servicing segment direct expenses, while corporate expenses remained flat.
 

Net income of $71 million (or $0.51 per share), compared to net income of $264 million (or $1.90 per share) year-over-year, and compared to a net loss of $73 million (or a net loss of $0.53 per share) in the second quarter of 2021.
 

Broker Partners increased by more than 2,500 to 7,452 as of September 30, 2021 from the end of the third quarter of 2020, and increased by 714 from the end of the second quarter of 2021.
 

During the quarter, Home Point completed the sale of a mortgage servicing rights (“MSR”) portfolio of single-family mortgage loans serviced for the Government National Mortgage Association (“GNMA”) with an aggregate UPB of approximately $11 billion. The total purchase price for the servicing rights was approximately $122 million. The transaction further streamlined Home Point’s servicing operations, reduced overall portfolio delinquencies, and provided incremental liquidity which was used to reduce outstanding debt.
 

Servicing customers of 428,622 at the end of the third quarter of 2021 increased 40% from the end of the third quarter of 2020 and decreased 5% compared to end of the second quarter of 2021. The sequential quarter decrease in servicing customers was primarily due to the sale of the GNMA MSR portfolio, which was completed in the third quarter of 2021.
 

Servicing portfolio unpaid principal balance (“UPB”) totaled $125.8 billion as of September 30, 2021, up 70% from the end of the third quarter of 2020, and up 1% from the end of the second quarter of 2021.
 

Total servicing portfolio delinquencies improved to 0.9% compared to 6.6% in the year-ago quarter and 1.6% in the second quarter of 2021, primarily due to the GNMA servicing portfolio sale and continued growth in new servicing customers. The MSR multiple for the third quarter of 2021 of 4.2x increased from 2.6x in the year-ago quarter and 3.7x in the second quarter of 2021, primarily driven by slower prepayment speeds due to higher mortgage interest rates.
 
3

 


Origination Segment
 
Home Point Capital’s Origination segment originates and sells residential real estate mortgage loans. These loans are sourced through three channels. The primary channel is Wholesale, where the Company works with mortgage brokerages to source new customers. In the Correspondent channel, customers are acquired through a network of mortgage banks and financial institutions. The Direct channel retains serviced customers in the Home Point Capital ecosystem.
 
The Origination segment generated a contribution margin of $67 million in the third quarter of 2021, compared to $424 million in the third quarter of 2020 and $(21) million in the second quarter of 2021.
 
Origination Segment – Financial Highlights and Summary of Key Performance Indicators

($mm)
 
For the quarter ended
 
   
9/30/2021
   
6/30/2021
   
9/30/2020
 
                   
Gain on loans, net
 
$
145.3
   
$
75.0
   
$
503.3
 
Loan fee income
   
34.5
     
39.5
     
28.2
 
Interest income, net and other income
   
4.1
     
2.7
     
0.6
 
Total Origination segment revenue
   
183.8
     
117.2
     
532.1
 
Directly attributable expense
   
(116.5
)
   
(138.0
)
   
(108.1
)
Contribution margin
 
$
67.3
   
$
(20.8
)
 
$
424.0
 

Key Performance Indicators1
 
For the quarter ended
 
 
9/30/2021
   
6/30/2021
   
9/30/2020
 
                   
Total Funded Origination Volume
 
$
20,796
   
$
25,466
   
$
18,114
 
Total Fallout Adjusted Lock Volume
 
$
21,894
   
$
20,365
   
$
18,590
 
                         
Gain on Sale Margin (bps)2
   
84
     
58
     
286
 
                         
Origination Volume by Purpose:
                       
Purchase
   
34.6
%
   
35.2
%
   
29.0
%
Refinance
   
65.4
%
   
64.8
%
   
71.0
%
                         
Third Party Partners:
                       
Number of Broker Partners
   
7,452
     
6,738
     
4,921
 
Number of Correspondent Partners
   
652
     
642
     
587
 

(1) See Appendix for additional volume and gain on sale information by channel.

(2) Calculated as gain on sale divided by Fallout Adjusted Lock Volume. Gain on sale includes gain on loans, net, loan fee income, interest income (expense), net, and loan servicing fees (expense) for the Origination segment.

4

 

 
Servicing Segment
 
Home Point Capital’s Servicing segment generates revenue through contractual fees earned by performing daily administrative and management activities for mortgage loans that were primarily sourced by the Company’s Originations segment. These loans are serviced on behalf of investors/guarantors, primarily Fannie Mae, Freddie Mac and Ginnie Mae.
 
The Servicing segment generated a contribution margin of $86 million in the third quarter of 2021, compared to $(32) million in the third quarter of 2020 and $(40) million in the second quarter of 2021.
 
Servicing Segment – Financial Highlights and Key Performance Indicators
 
($mm)
 
For the quarter ended
 
   
9/30/2021
   
6/30/2021
   
9/30/2020
 
                   
Loan servicing fees
 
$
91.8
   
$
85.6
   
$
48.1
 
Interest income, net and other income1
   
8.3
     
0.5
     
0.7
 
Total Servicing segment revenue
   
100.1
     
86.1
     
48.8
 
Directly attributable expense
   
(17.4
)
   
(18.8
)
   
(13.9
)
Primary Margin
   
82.6
     
67.3
     
34.9
 
Change in MSR fair value: amortization
   
(73.9
)
   
(77.7
)
   
(54.9
)
Adjusted contribution margin
   
8.7
     
(10.4
)
   
(20.1
)
Change in MSR fair value: mark-to-market, net of hedge
   
77.5
     
(29.2
)
   
(11.8
)
Contribution margin
 
$
86.2
   
$
(39.6
)
 
$
(31.9
)

Key Performance Indicators
 
For the quarter ended2
 
 
9/30/2021
   
6/30/2021
   
9/30/2020
 
                   
MSR servicing portfolio - UPB
 
$
125,832
   
$
124,259
   
$
73,951
 
Average MSR servicing portfolio - UPB
 
$
125,046
   
$
106,268
   
$
70,426
 
MSR servicing portfolio - Units
   
428,622
     
449,029
     
307,236
 
Weighted average coupon rate
   
2.98
%
   
3.09
%
   
3.63
%
60+ days delinquent, incl. forbearance
   
0.9
%
   
1.6
%
   
6.6
%
60+ days delinquent, excl. forbearance
   
0.7
%
   
1.3
%
   
2.6
%
MSR multiple
   
4.2
 x  
 
3.7
x
   
2.6
x

(1) Other income for the third quarter of 2021 includes a gain of $7.4 million from the sale of a portfolio of GNMA mortgage servicing rights, which was completed during the quarter.

(2) Figures as of period end, except “Average MSR servicing portfolio - UPB” which is average for the period.

5




Balance Sheet and Liquidity Highlights
 
Home Point Capital had available liquidity of $550 million as of September 30, 2021, comprising $161 million of cash and cash equivalents and $389 million of undrawn capacity from mortgage servicing rights lines of credit and other credit facilities. The Company’s warehouse capacity of $7.5 billion as of September 30, 2021 increased from $7.1 billion as of June 30, 2021.
 
($mm)
 
As of
 
   
9/30/2021
   
6/30/2021
   
9/30/2020
 
                   
Cash and cash equivalents
 
$
160.6
   
$
209.9
   
$
271.6
 
Mortgage servicing rights (at fair value)
   
1,402.1
     
1,267.3
     
583.3
 
Warehouse lines of credit
   
6,308.5
     
5,057.6
     
2,092.5
 
Term debt and other borrowings, net
   
1,065.8
     
1,166.5
     
374.1
 
Total shareholders’ equity
   
761.2
     
709.3
     
742.8
 
 
Dividend
 
Home Point Capital’s board of directors has declared a cash dividend of $0.04 per share on its common stock for the third quarter ended September 30, 2021. This dividend will be paid on or about November 30, 2021 to holders of record at the close of business on November 15, 2021.
 
Conference Call and Webcast
 
Members of Home Point Capital’s management team will host a conference call and live webcast on Thursday, November 4, 2021 at 8:30 a.m. ET to review the Company’s financial results for the third quarter ended September 30, 2021.
 
The conference call may be accessed by dialing (877) 423-9813 (toll-free) or (201) 689-8573 (international), using the passcode 13723513. The number should be dialed at least ten minutes prior to the start of the call. A simultaneous webcast will also be available and can be accessed through the Investor Relations section of Home Point Capital’s website at investors.homepoint.com.
 
An investor presentation will be referenced during the call, and it will be available prior to the call through the Investor Relations section of Home Point Capital’s website.

6





A telephonic replay of the call will be available approximately two hours after the live call through Thursday, November 11, 2021 by dialing (844) 512-2921 (toll-free) or (412) 317-6671 (international), passcode 13723513. To access a replay of the webcast, please visit Events in the Investor Relations section of Home Point Capital’s website.
 
About Home Point Capital
 
Home Point Capital is the parent company of Homepoint, one of the nation’s leading mortgage originators and servicers, as well as wholly owned subsidiaries Home Point Mortgage Acceptance Corporation and Home Point Asset Management. Home Point Capital’s primary business entity, Homepoint, puts people front and center of the homebuying and homeownership experience. The Company supports successful homeownership as a crucial element of broader financial security and well-being through delivering long-term value beyond the loan. Founded in 2015 and headquartered in Ann Arbor, Michigan, Homepoint works with a nationwide network of more than 6,500 mortgage broker and correspondent partners with deep knowledge and expertise about the communities and customers they serve. Today, Homepoint is the nation’s third-largest wholesale mortgage lender and the 7th-largest non-bank mortgage lender.

Home Point Financial Corporation d/b/a Homepoint. NMLS No. 7706 (For licensing information, go to: nmlsconsumeraccess.org). Home Point Financial Corporation does not conduct business under the name, “Homepoint” in IL, KY, LA, MD, NY, or WY. In these states, the company conducts business under the full legal name, Home Point Financial Corporation, 2211 Old Earhart Road, Suite 250, Ann Arbor, MI 48105. Toll-Free Tel: 888-616-6866.

7





Forward Looking Statements
 
This press release contains certain “forward-looking statements,” as that term is defined in the U.S. federal securities laws, including the Private Securities Litigation Reform Act of 1995. In addition, from time to time, the Company or its representatives have made, or may make, forward-looking statements orally or in writing. These forward-looking statements include, but are not limited to, statements other than statements of historical facts, including among others, statements relating to the Company’s future financial performance, the Company’s business prospects and strategy, anticipated financial position, liquidity and capital needs, the industry in which the Company operates and other similar matters. Words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “could,” “would,” “will,” “may,” “can,” “continue,” “potential,” “should” and the negative of these terms or other comparable terminology often identify forward-looking statements. These forward-looking statements, , which are based on currently available information, operating plans, and projections about events and trends, are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements. Factors, risks, and uncertainties that could cause actual outcomes and results to be materially different from those contemplated by forward-looking statements include, among others: our reliance on our financing arrangements to fund mortgage loans and otherwise operate our business; the dependence of our loan origination and servicing revenues on macroeconomic and U.S. residential real estate market conditions; counterparty risk; the requirement to make servicing advances that can be subject to delays in recovery or may not be recoverable in certain circumstances; competition for mortgage assets that may limit the availability of desirable originations, acquisitions and result in reduced risk-adjusted returns; our ability to continue to grow our loan origination business or effectively manage significant increases in our loan production volume; competition in the industry in which we operate; our success and growth of our production and servicing activities and the dependence upon our ability to adapt to and implement technological changes; the effectiveness of our risk management efforts; our ability to detect misconduct and fraud; any cybersecurity risks, cyber incidents and technology failures; our vendor relationships; our failure to deal appropriately with various issues that may give rise to reputational risk, including legal and regulatory requirements; ; risks and uncertainties associated with litigation, including any employment, intellectual property, consumer protection, class action and other litigation matters, and related unfavorable publicity; exposure to new risks and increased costs as a result of initiating new business activities or strategies or significantly expanding existing business activities or strategies; the impact of changes in political or economic stability or in government policies on our material vendors with operations in India; the impact of interest rate fluctuations; risks associated with hedging against interest rate exposure; the impact of any prolonged economic slowdown, recession or declining real estate values; risks associated with financing our assets with borrowings; risks associated with a decrease in value of our collateral; the dependence of our operations on access to our financing arrangements; risks associated with the financial and restrictive covenants included in our financing agreements; risks associated with higher risk loans that we service; risks associated with derivative financial instruments; our ability to foreclose on our mortgage assets in a timely manner or at all; our ability to obtain and/or maintain licenses and other approvals in those jurisdictions where required to conduct our business; legislative and regulatory changes that impact the mortgage loan industry or housing market; changes in regulations or the occurrence of other events that impact the business, operations or prospects of government agencies or such changes that increase the cost of doing business with such entities; and the spread of the COVID-19 outbreak and severe disruptions in the U.S. and global economy and financial markets it has caused. You should carefully consider the foregoing factors and the other risks and uncertainties that may affect the Company’s business, including those described in documents filed from time to time by the Company with the Securities and Exchange Commission. Many of the important factors that will determine these results are beyond our ability to control or predict. You are cautioned not to put undue reliance on any forward-looking statements, which speak only as of the date thereof. Except as required under applicable law, the Company does not assume any obligation to update these forward-looking statements.
 
8





Consolidated Statements of Income (Loss)
($ in millions, except per share data)
(Unaudited)
 
($mm, except per share values)
 
For the quarter ended
 
   
9/30/2021
   
6/30/2021
   
9/30/2020
 
                   
Gain on loans, net
 
$
145.5
   
$
75.0
   
$
503.3
 
Loan fee income
   
34.5
     
39.5
     
28.2
 
Interest income
   
36.7
     
34.6
     
14.7
 
Interest expense
   
(45.5
)
   
(44.1
)
   
(17.6
)
Interest (expense), net
   
(8.8
)
   
(9.5
)
   
(2.9
)
Loan servicing fees
   
91.8
     
85.6
     
48.4
 
Change in FV of MSR
   
3.5
     
(106.9
)
   
(66.7
)
Other income
   
8.1
     
0.7
     
0.5
 
Total  revenue, net
   
274.6
     
84.4
     
510.8
 
                         
Compensation and benefits
   
114.6
     
127.3
     
117.2
 
Loan expense
   
16.6
     
17.5
     
8.7
 
Loan servicing expense
   
6.7
     
7.5
     
6.5
 
Production technology
   
7.6
     
8.2
     
6.4
 
General and administrative
   
21.7
     
26.5
     
16.2
 
Depreciation and amortization
   
2.4
     
2.4
     
1.2
 
Other expense
   
5.6
     
8.6
     
7.1
 
Total Expenses
   
175.3
     
198.0
     
163.3
 
                         
Pre-tax income
   
99.3
     
(113.6
)
   
347.5
 
Pre-tax margin
   
36
%
 
NM
     
68
%
Income tax expense (benefit)
   
27.3
     
(27.2
)
   
93.3
 
Income from equity method investment
   
(0.7
)
   
13.2
     
9.9
 
Net income (loss)
 
$
71.2
   
$
(73.2
)
 
$
264.1
 
Net margin
   
26
%
 
NM
     
52
%
Basic and diluted earnings per share1:
                       
Basic net income (loss) per share
 
$
0.51
   
$
(0.53
)
 
$
1.90
 
Diluted total net income (loss) per share
   
0.51
     
(0.52
)
   
1.90
 
Basic weighted average common stock outstanding (mm)
   
139.1
     
138.9
     
138.8
 
Diluted weighted average common stock outstanding (mm)
   
140.0
     
140.5
     
139.2
 
                         
Adjusted income statement metrics2:
                       
Adjusted revenue
 
$
196.4
   
$
126.8
   
$
532.5
 
Adjusted net income
   
15.1
     
(51.0
)
   
272.7
 
Adjusted net margin
   
8
%
 
NM
     
51
%

(1) On January 21, 2021, Home Point Capital effected a stock split of its outstanding common stock pursuant to which the 100 outstanding shares were split into 1,388,601.11 shares each, for a total of 138,860,103 shares of outstanding common stock. As a result, all amounts relating to per share amounts have been retroactively adjusted to reflect this stock split.

(2) Non-GAAP measures. See non-GAAP reconciliation for a reconciliation of each measure to the nearest GAAP measure.

9





Consolidated Balance Sheets
($ in millions)
(Unaudited)

($mm)
 
As of
 
   
9/30/2021
   
6/30/2021
   
9/30/2020
 
                   
Assets:
                 
Cash and cash equivalents
 
$
160.6
   
$
209.9
   
$
271.6
 
Restricted cash
   
42.5
     
43.0
     
41.9
 
Cash and cash equivalents and Restricted cash
   
203.1
     
252.9
     
313.5
 
Mortgage loans held for sale (at fair value)
   
6,680.2
     
5,412.5
     
2,281.8
 
Mortgage servicing rights (at fair value)
   
1,402.1
     
1,267.3
     
583.3
 
Property and equipment, net
   
22.9
     
23.4
     
18.6
 
Accounts receivable, net
   
117.5
     
177.4
     
79.3
 
Derivative assets
   
164.6
     
125.2
     
284.4
 
Goodwill and intangibles
   
10.8
     
10.8
     
10.8
 
GNMA loans eligible for repurchase
   
265.1
     
988.2
     
2,919.9
 
Other assets
   
111.6
     
112.1
     
83.9
 
Total assets
 
$
8,978.1
   
$
8,369.7
   
$
6,575.4
 
                         
Liabilities and Shareholders’ Equity:
                       
Warehouse lines of credit
 
$
6,308.5
   
$
5,057.6
   
$
2,092.5
 
Term debt and other borrowings, net
   
1,065.8
     
1,166.5
     
374.1
 
Accounts payable and accrued expenses
   
127.8
     
146.1
     
313.9
 
GNMA loans eligible for repurchase
   
265.1
     
988.2
     
2,919.9
 
Deferred tax liabilities
   
224.3
     
196.8
     
113.0
 
Other liabilities
   
225.4
     
105.1
     
19.4
 
Total liabilities
   
8,216.9
     
7,660.3
     
5,832.7
 
                         
Shareholders’ Equity:
                       
Common stock
   
-
     
-
     
-
 
Additional paid in capital
   
522.1
     
520.5
     
363.4
 
Retained earnings
   
239.1
     
188.8
     
379.4
 
Total shareholders’ equity
   
761.2
     
709.3
     
742.8
 
Total liabilities and shareholders’ equity
 
$
8,978.1
   
$
8,369.7
   
$
6,575.4
 

10





Volume and Margin Detail by Channel
 
VOLUME DETAIL BY CHANNEL

($mm)
 
For the quarter ended
 
   
9/30/2021
   
6/30/2021
   
9/30/2020
 
                   
Funded Origination Volume by Channel
               
Wholesale
 
$
16,355
   
$
18,380
   
$
10,982
 
Correspondent
   
3,434
     
5,695
     
6,280
 
Direct
   
1,006
     
1,391
     
852
 
Total Funded Origination Volume
 
$
20,796
   
$
25,466
   
$
18,114
 
                         
Fallout Adjusted Lock Volume by Channel
                 
Wholesale
 
$
16,710
   
$
15,566
   
$
11,243
 
Correspondent
   
4,150
     
3,963
     
6,548
 
Direct
   
1,035
     
836
     
800
 
Total Fallout Adjusted Lock Volume
 
$
21,894
   
$
20,365
   
$
18,590
 

GAIN ON SALE MARGIN DETAIL BY CHANNEL
($mm)
 
For the quarter ended
 
 
 
9/30/2021
   
6/30/2021
   
9/30/2020
 
 
 
$ Amount
   
Basis Points
   
$ Amount
   
Basis Points
   
$ Amount
   
Basis Points
 
Gain on Sale Margin by Channel
                                   
Wholesale
 
$
122.0
     
73
   
$
114.5
     
74
   
$
359.5
     
320
 
Correspondent
   
8.4
     
20
     
9.3
     
23
     
40.4
     
62
 
Direct
   
30.3
     
292
     
26.3
     
315
     
33.6
     
420
 
Margin Attributable to Channels
   
160.6
     
73
     
150.1
     
74
     
433.5
     
233
 
Other Gain (Loss) on Sale1
   
23.2
   
NA
     
(32.9
)
 
NA
     
98.6
   
NA
 
Gain on Sale Margin2
 
$
183.8
     
84
   
$
117.2
     
58
   
$
532.1
     
286
 

(1) Includes interest income (expense), net, realized and unrealized gains (losses) on locks and mortgage loans held for sale, net hedging results, the provision for the representation and warranty reserve, and differences between modeled and actual pull-through.

(2) Calculated as gain on sale divided by Fallout Adjusted Lock Volume. Gain on sale includes gain on loans, net, loan fee income, interest income (expense), net, and loan servicing fees (expense) for the Origination segment.

11




Summary Segment Results

($mm)
 
For the quarter September 30, 2021
 
   
Origination
   
Servicing
   
Segments
Total
   
All Other
   
Total
   
Reconciliation
Item1
   
Segments Total
 
                                           
Revenue:
                   
                   
Gain on loans, net
 
$
145.3
   
$
0.2
   
$
145.5
   
$
(0.0
)
 
$
145.5
   
$
-
   
$
145.5
 
Loan fee income
   
34.5
     
-
     
34.5
     
-
     
34.5
     
-
     
34.5
 
Loan servicing fees
   
0.0
     
91.8
     
91.8
     
-
     
91.8
     
-
     
91.8
 
Change in FV of MSRs, net
   
-
     
3.5
     
3.5
     
-
     
3.5
     
-
     
3.5
 
Interest income (loss), net
   
4.0
     
0.6
     
4.7
     
(13.5
)
   
(8.8
)
   
-
     
(8.8
)
Other income2
   
-
     
7.5
     
7.5
     
(0.1
)
   
7.4
     
0.7
     
8.1
 
Total Revenue
 
$
183.8
   
$
103.6
   
$
287.5
   
$
(13.6
)
 
$
273.9
   
$
0.7
   
$
274.6
 
                                                         
Contribution margin
 
$
67.3
   
$
86.2
   
$
153.5
   
$
(55.1
)
 
$
98.6
                 

($mm)
 
For the quarter June 30, 2021
 
   
Origination
   
Servicing
   
Segments
Total
   
All Other
   
Total
   
Reconciliation Item1
   
Segments Total
 
                                           
Revenue:
                   

                   
Gain on loans, net
 
$
75.0
   
$
0.0
   
$
75.0
   
$
0.0
   
$
75.0
   
$
-
   
$
75.0
 
Loan fee income
   
39.5
     
-
     
39.5
     
-
     
39.5
     
-
     
39.5
 
Loan servicing fees
   
-
     
85.6
     
85.6
     
-
     
85.6
     
-
     
85.6
 
Change in FV of MSRs, net
   
-
     
(106.9
)
   
(106.9
)
   
-
     
(106.9
)
   
-
     
(106.9
)
Interest income (loss), net
   
2.7
     
0.4
     
3.1
     
(12.6
)
   
(9.5
)
   
-
     
(9.5
)
Other income
   
-
     
0.1
     
-
     
13.8
     
13.8
     
(13.2
)
   
0.6
 
Total Revenue
 
$
117.2
   
$
(20.9
)
 
$
96.3
   
$
1.2
   
$
97.5
   
$
(13.2
)
 
$
84.3
 
           


                                         
Contribution margin
 
$
(20.8
)
 
$
(39.6
)
 
$
(60.4
)
 
$
(40.0
)
 
$
(100.4
)
               

($mm)
 
For the quarter September 30, 2020
 
   
Origination
   
Servicing
   
Segments
Total
   
All Other
   
Total
   
Reconciliation
Item1
   
Segments Total
 
                                           
Revenue:
 
               
                   
Gain on loans, net
 
$
503.3
   
$
-
   
$
503.3
   
$
-
   
$
503.3
         
$
503.3
 
Loan fee income
   
28.2
     
-
     
28.2
     
-
     
28.2
           
28.2
 
Loan servicing fees
   
0.2
     
48.1
     
48.3
     
-
     
48.3
           
48.3
 
Change in FV of MSRs, net
   
-
     
(66.7
)
   
(66.7
)
   
-
     
(66.7
)
         
(66.7
)
Interest income (loss), net
   
0.3
     
0.6
     
0.9
     
(3.8
)
   
(2.9
)
         
(2.9
)
Other income
   
-
     
0.1
     
0.1
     
10.3
     
10.4
     
(9.9
)
   
0.5
 
Total Revenue
 
$
532.1
   
$
(17.9
)
 
$
514.2
   
$
6.5
   
$
520.7
   
$
(9.9
)
 
$
510.8
 
           

                                         
Contribution margin
 
$
424.0
   
$
(31.9
)
 
$
392.1
   
$
(34.8
)
 
$
357.4
                 

(1) The Company includes the income from its equity method investments in the All Other category. In order to reconcile to Total net revenue on the condensed consolidated statements of operations, it must be removed as is presented above.

(2) Other income in the Servicing segment for the third quarter of 2021 includes a gain of approximately $7.4 million from the sale of a portfolio of Government Natioal Mortgage Association mortgage servicing rights, which was completed during the quarter.

12




GAAP to Non-GAAP Reconciliations
 
RECONCILIATION OF ADJUSTED REVENUE TO TOTAL REVENUE, NET

($mm)
 
For the quarter ended
 
   
9/30/2021
   
6/30/2021
   
9/30/2020
 
                   
Total  revenue, net
 
$
274.6
   
$
84.4
   
$
510.8
 
Income from equity method investment
   
(0.7
)
   
13.2
     
9.9
 
Change in fair value of MSR, net of hedge
   
(77.5
)
   
29.2
     
11.8
 
Adjusted revenue
 
$
196.4
   
$
126.8
   
$
532.5
 

RECONCILIATION OF ADJUSTED NET INCOME TO TOTAL NET INCOME (LOSS)

($mm)
 
For the quarter ended
 
   
9/30/2021
   
6/30/2021
   
9/30/2020
 
                   
Total net income (loss)
 
$
71.2
   
$
(73.2
)
 
$
264.1
 
Change in fair value of MSR, net of hedge
   
(77.5
)
   
29.2
     
11.8
 
Income tax effect of change in fair value of MSR, net of hedge
   
21.3
     
(7.0
)
   
(3.2
)
Adjusted net income
 
$
15.1
   
$
(51.0
)
 
$
272.7
 

RECONCILIATION OF ADJUSTED NET MARGIN TO NET MARGIN

($mm)
 
For the quarter ended
 
   
9/30/2021
   
6/30/2021
   
9/30/2020
 
                   
Total  revenue, net
 
$
274.6
   
$
84.4
   
$
510.8
 
Total net income (loss)
   
71.2
     
(73.2
)
   
264.1
 
Net margin
   
26
%
 
NM
     
52
%
                         
Adjusted revenue
 
$
196.4
   
$
126.8
   
$
532.5
 
Adjusted net income
   
15.1
     
(51.0
)
   
272.7
 
Adjusted net margin
   
8
%
 
NM
     
51
%

13




Non-GAAP Financial Measures
 
To provide investors with information in addition to our results as determined under Generally Accepted Accounting Principles (“GAAP”), we disclose Adjusted revenue, Adjusted net Income, and Adjusted net margin as “non-GAAP measures,” which management believes 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 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.
 
We define Adjusted revenue as Total net revenue exclusive of the impact of the change in fair value of MSRs related to changes in valuation inputs and assumptions, net of MSRs hedge and adjusted for Income from equity method investment.
 
We define Adjusted net income as Net income (loss) exclusive of the impact of the change in fair value of MSRs related to changes in valuation inputs and assumptions, net of MSRs hedge.
 
We exclude changes in fair value of MSRs, net of hedge from each of Adjusted revenue and Adjusted net income (loss) as they add volatility and are not indicative of the Company’s operating performance or results of operation. This adjustment does not include changes in fair value of MSRs due to realization of cash flows, which remain in each of Adjusted revenue and Adjusted net income (loss). Realization of cash flows occurs when cash is collected as customers make scheduled payments, partial prepayments of principal, or pay their mortgage in full.
 
We define Adjusted net margin by dividing Adjusted net income by Adjusted revenue.
 
We believe that the presentation of Adjusted revenue, Adjusted net Income, and Adjusted net margin provides 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. Adjusted revenue, Adjusted net Income, and Adjusted net margin provide indicators of performance that are not affected by fluctuations in certain costs or other items. Accordingly, management believes that these measurements are useful for comparing general operating performance from period to period, and management relies on these measures for planning and forecasting of future periods. The Company measures the performance of the segments primarily on a contribution margin basis. Additionally, these measures allow management to compare our results with those of other companies that have different financing and capital structures. However, these measures are not financial measures calculated in accordance with GAAP and should not be considered as a substitute for 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.
 
14





Investor Relations Contact:          
 
Home Point Capital:
Gary Stein
investor@hpfc.com
(734) 205-9680
 
Media Contacts:          
 
Home Point Capital:
Brad Pettiford
media@hpfc.com
 
Haven Tower for Home Point Capital:
homepoint@haventower.com


15


Exhibit 99.2

 Third Quarter 2021 Earnings Presentation  November 4, 2021     
 

 Forward-Looking Statements  2  This presentation contains certain “forward-looking statements,” as that term is defined in the U.S. federal securities laws, including the Private Securities Litigation Reform Act of 1995. In addition, from time to time, Home Point Capital Inc. (“we,” “our,” “us” or the “Company”) or its representatives have made, or may make, forward-looking statements orally or in writing. These forward-looking statements include, but are not limited to, statements other than statements of historical facts, including among others, statements relating to the Company’s future financial performance, the Company’s business prospects and strategy, anticipated financial position, liquidity and capital needs, the industry in which the Company operates and other similar matters. Words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “could,” “would,” “will,” “may,” “can,” “continue,” “potential,” “should” and the negative of these terms or other comparable terminology often identify forward-looking statements. These forward-looking statements, which are based on currently available information, operating plans, and projections about events and trends, are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements. Factors, risks, and uncertainties that could cause actual outcomes and results to be materially different from those contemplated by forward-looking statements include, among others: our reliance on our financing arrangements to fund mortgage loans and otherwise operate our business; the dependence of our loan origination and servicing revenues on macroeconomic and U.S. residential real estate market conditions; counterparty risk; the requirement to make servicing advances that can be subject to delays in recovery or may not be recoverable in certain circumstances; competition for mortgage assets that may limit the availability of desirable originations, acquisitions and result in reduced risk-adjusted returns; our ability to continue to grow our loan origination business or effectively manage significant increases in our loan production volume; competition in the industry in which we operate; our success and growth of our production and servicing activities and the dependence upon our ability to adapt to and implement technological changes; the effectiveness of our risk management efforts; our ability to detect misconduct and fraud; any cybersecurity risks, cyber incidents and technology failures; our vendor relationships; our failure to deal appropriately with various issues that may give rise to reputational risk, including legal and regulatory requirements; risks and uncertainties associated with litigation, including any employment, intellectual property, consumer protection, class action and other litigation matters, and related unfavorable publicity; exposure to new risks and increased costs as a result of initiating new business activities or strategies or significantly expanding existing business activities or strategies; the impact of changes in political or economic stability or in government policies on our material vendors with operations in India; the impact of interest rate fluctuations; risks associated with hedging against interest rate exposure; the impact of any prolonged economic slowdown, recession or declining real estate values; risks associated with financing our assets with borrowings; risks associated with a decrease in value of our collateral; the dependence of our operations on access to our financing arrangements; risks associated with the financial and restrictive covenants included in our financing agreements; risks associated with higher risk loans that we service; risks associated with derivative financial instruments; our ability to foreclose on our mortgage assets in a timely manner or at all; our ability to obtain and/or maintain licenses and other approvals in those jurisdictions where required to conduct our business; legislative and regulatory changes that impact the mortgage loan industry or housing market; changes in regulations or the occurrence of other events that impact the business, operations or prospects of government agencies or such changes that increase the cost of doing business with such entities; and the spread of the COVID-19 outbreak and severe disruptions in the U.S. and global economy and financial markets it has caused. You should carefully consider the foregoing factors and the other risks and uncertainties that may affect the Company’s business, including those described in documents filed from time to time by the Company with the Securities and Exchange Commission. Many of the important factors that will determine these results are beyond our ability to control or predict. You are cautioned not to put undue reliance on any forward-looking statements, which speak only as of the date thereof. Except as required under applicable law, the Company does not assume any obligation to update these forward-looking statements.  
 

 3   Funded origination volume of $21 billion; $100 billion in LTM1 Q3 2021  Third Quarter 2021 Highlights    Financial Performance     Quarterly net income of $71 million ($0.51 per share); LTM1 Q3 2021 net income of $331 million    Quarterly total net revenue of $275 million; LTM1 Q3 2021 net revenue of $1.2 billion                  Nearly 429,000 servicing customers at end of Q3 2021, up 40% from end of Q3 2020   Servicing portfolio of $126 billion as of September 30, 2021, 70% increase year-over-year                                      Operational Results                               More than 7,400 Broker Partners at quarter end, 51% increase year-over-year  Last twelve months for the period ended September 30th. Third quarter 2021 LTM information is derived from a numerical calculation of our fiscal year 2020 financial information plus first nine months 2021 financial information less first nine months 2020 financial information. Home Point Capital does not prepare or present separate LTM financial statements. 
 

   Delivering on Key Priorities  4  Scaling and Optimizing our Business   Increase momentum of broker partner growth  Accelerate productivity and efficiency initiatives  Enhance partner and customer experience  Diversify capital markets execution alternatives  Continuing to Drive Home Point Towards a Baseline Return on Equity of At Least 15%          Third Quarter Milestones  Added 714 broker partners; on track to exceed 8,000 partners by year-endReduced quarterly expenses by $23 million and continue to lower direct origination cost per loanOngoing rollout of Homepoint Amplify broker service modelAccelerated transition to MBS deliveries versus cash sales; traded ~$1 billion in agency products into non-agency executionSold ~$11 billion Ginnie Mae MSR portfolio to streamline servicing and bolster capitalization             
 

 Net Income ($mm)  Performance Across the Platform in Q3 2021    5  Total Revenue, Net ($mm)  Funded Origination Volume ($bn)  Mortgage Servicing  2.2x  Customers (‘000)  Portfolio UPB ($bn)  Third Party Partners  # of Broker Partners  # of Third Party Partners2  1.5x  1  1  1  1  1  1  Last twelve months for the period ended September 30th. Third quarter 2021 LTM information is derived from a numerical calculation of our fiscal year 2020 financial information plus first nine months 2021 financial information less first nine months 2020 financial information. Home Point Capital does not prepare or present separate LTM financial statements. Includes correspondent and broker partners combined. 
 

 Third Quarter 2021 Financial Results    6  Total revenue, net in the third quarter of 2021 of $275 million declined from $511 million year-over-year, due primarily to a lower gain on sale margin, partially offset by an increase in loan servicing fees and the fair market value (FMV) of the mortgage servicing rights (MSR) portfolioThird quarter 2021 revenue more than tripled from $84 million in the second quarter of 2021, primarily driven by a 94% increase in gain on loans, and a FMV increase in the MSR portfolio due to higher interest rates during the third quarterTotal expenses of $175 million for the third quarter of 2021 were up 7% versus the year-ago quarter, and were down 11% compared to the second quarter of this year; the sequential quarter decrease in total expenses was driven by a 16% decline in Origination segment direct expenses and a 7% decline in Servicing segment direct expenses, while corporate expenses were held flat Third quarter 2021 net income of $71 million, compared to net income of $264 million year-over-year and a net loss of $73 million in the second quarter of 2021 
 

 Funded Volume by Channel    7  Wholesale Funded Volume ($bn)  Direct Funded Volume($bn)  Correspondent Funded Volume ($bn)  Wholesale funded volume of $16.4 billion in the third quarter of 2021, compared to $11.0 billion year-over-year and $18.4 billion in the prior quarterWholesale channel driven by differentiated business model focused on building broker partnerships, maintaining localized, in-market sales coverage, and delivering continuous process and technology enhancementsCorrespondent volume of $3.4 billion in the third quarter of 2021 versus $6.3 billion year-over-year and $5.7 billion in the second quarter of 2021; scaled back volume in Q3’21 due to compressed margin environment and capital-intensive nature of the channelCorrespondent channel provides opportunistic source of low-cost customer acquisition to drive scaleDirect volume of $1.0 billion in the third quarter of 2021 compared to $850 million in the year-ago quarter and $1.4 billion in the prior quarterDirect channel established in 2019 to focus on retention, and does not conflict with wholesale broker relationships 
 

 Origination Segment Highlights    8  Third quarter Origination segment revenue of $184 million compared to $532 million in the third quarter of 2020 and $117 million in the second quarter of 2021Gain on sale margin attributable to channels, before giving effect to the impact of capital markets activity, was 73 basis points in the third quarter of 2021 versus 233 basis points in the third quarter of 2020 and flat versus 74 basis points in the prior quarterThird quarter contribution margin of $67 million compared to $424 million year-over-year and $(21) million in the prior quarterThird party partner relationships reached 8,104 at the end of the third quarter of 2021, a 47% increase year-over-year, and a 10% increase versus the prior quarterAdded 2,531 broker partners since the end of the third quarter of 2020, and added 714 broker partners since the end of the second quarter of 2021 
 

 Servicing Segment Highlights    9  Loan servicing fees of $92 million in the third quarter of 2021 nearly doubled year-over-year and increased 7% from the second quarter of 2021Servicing segment adjusted contribution margin in the third quarter of 2021 was $9 million, up from $(20) million in the year-ago quarter and $(10) million in the prior quarterServicing segment contribution margin was $86 million, versus $(32) million in the year-ago quarter and $(40) million in the prior quarter, primarily driven by a $77 million increase in the mark-to-market fair value of the MSR portfolioDuring the third quarter of 2021, completed the sale of an MSR loan portfolio serviced for the Government National Mortgage Association (GNMA) with UPB of approximately $11 billion; total purchase price was approximately $122 millionServicing portfolio customers of nearly 429,000 at the end of the third quarter of 2021 increased 40% versus the prior year and decreased 5% compared to the second quarter of 2021; the sequential quarter decrease in servicing customers was primarily due to the sale of the GNMA MSR portfolio, which was completed in the third quarter of 2021 
 

 Balance Sheet Highlights    10  $550 million of available liquidity at the end of the third quarter of 2021, including $161 million of cash and cash equivalents and $389 million of undrawn capacity from MSR lines of credit and other credit facilitiesMSR balance of $1.4 billion at September 30, 2021, up 2.4x year-over-year, and up 11% from the prior quarterTotal assets of $9.0 billion at September 30, 2021, compared to $6.6 billion at the end of the third quarter of 2020 and $8.4 billion at June 30, 2021Book value of $761 million at September 30, 2021, compared to $743 million at September 30, 2020, and $709 million at the end of the second quarter of 2021 Total warehouse capacity increased during the quarter to $7.5 billion at September 30, 2021, up from $7.1 billion at June 30, 2021 
 

 11  Appendix 
 

 Detailed Income Statement    12 
 

 Detailed Balance Sheet    13 
 

 Volume & Margin Detail by Channel    14 
 


 1  Summary Segment Results
 

 1  Summary Segment Results 

 Non-GAAP to GAAP Reconciliations    16 
 

    To provide investors with information in addition to our results as determined under Generally Accepted Accounting Principles (“GAAP”), we disclose Adjusted revenue, Adjusted net Income, and Adjusted net margin as “non-GAAP measures,” which management believes 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 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.We define Adjusted revenue as Total net revenue exclusive of the impact of the change in fair value of MSRs related to changes in valuation inputs and assumptions, net of MSRs hedge and adjusted for Income from equity method investment. We define Adjusted net income as Net income (loss) exclusive of the impact of the change in fair value of MSRs related to changes in valuation inputs and assumptions, net of MSRs hedge. We exclude changes in fair value of MSRs, net of hedge from each of Adjusted revenue and Adjusted net income (loss) as they add volatility and are not indicative of the Company’s operating performance or results of operation. This adjustment does not include changes in fair value of MSRs due to realization of cash flows, which remain in each of Adjusted revenue and Adjusted net income (loss). Realization of cash flows occurs when cash is collected as customers make scheduled payments, partial prepayments of principal, or pay their mortgage in full. We define Adjusted net margin by dividing Adjusted net income by Adjusted revenue. We believe that the presentation of Adjusted revenue, Adjusted net Income, and Adjusted net margin provides 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. Adjusted revenue, Adjusted net Income, and Adjusted net margin provide indicators of performance that are not affected by fluctuations in certain costs or other items. Accordingly, management believes that these measurements are useful for comparing general operating performance from period to period, and management relies on these measures for planning and forecasting of future periods. The Company measures the performance of the segments primarily on a contribution margin basis. Additionally, these measures allow management to compare our results with those of other companies that have different financing and capital structures. However, these measures are not financial measures calculated in accordance with GAAP and should not be considered as a substitute for 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.   17  Non-GAAP Financial Measures 
 

 



Exhibit 99.3


Home Point Capital Inc.

Third Quarter 2021 Earnings
Supplemental Financial Data

November 4, 2021



Legal Disclaimers

1. Non-GAAP Financial Measures

To provide investors with information in addition to our results as determined under Generally Accepted Accounting Principles (“GAAP”), we disclose Adjusted revenue, Adjusted net Income, and Adjusted net margin as “non-GAAP measures,” which management believes 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 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.
 
We define Adjusted revenue as Total net revenue exclusive of the impact of the change in fair value of MSRs related to changes in valuation inputs and assumptions, net of MSRs hedge and adjusted for Income from equity method investment. 
 
We define Adjusted net income as Net income (loss) exclusive of the impact of the change in fair value of MSRs related to changes in valuation inputs and assumptions, net of MSRs hedge. 
 
We exclude changes in fair value of MSRs, net of hedge from each of Adjusted revenue and Adjusted net income (loss) as they add volatility and are not indicative of the Company’s operating performance or results of operation. This adjustment does not include changes in fair value of MSRs due to realization of cash flows, which remain in each of Adjusted revenue and Adjusted net income (loss). Realization of cash flows occurs when cash is collected as customers make scheduled payments, partial prepayments of principal, or pay their mortgage in full. 
 
We define Adjusted net margin by dividing Adjusted net income by Adjusted revenue. 
 
We believe that Adjusted revenue, Adjusted net Income, and Adjusted net margin can provide useful information to investors and others in understanding and evaluating our operating results. These measures are not financial measures calculated in accordance with GAAP and should not be considered as a substitute for 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. 
 
We believe that the presentation of Adjusted revenue, Adjusted net Income, and Adjusted net margin provides 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. Adjusted revenue, Adjusted net Income, and Adjusted net margin provide indicators of performance that are not affected by fluctuations in certain costs or other items. Accordingly, management believes that these measurements are useful for comparing general operating performance from period to period, and management relies on these measures for planning and forecasting of future periods. The Company measures the performance of the segments primarily on a contribution margin basis. Additionally, these measures allow management to compare our results with those of other companies that have different financing and capital structures. However, other companies may define Adjusted revenue, Adjusted net Income, and Adjusted net margin differently, and as a result, our measures of Adjusted revenue, Adjusted net Income, and Adjusted net margin may not be directly comparable to those of other companies.
 
2. Forward Looking Statements

This presentation contains certain “forward-looking statements,” as that term is defined in the U.S. federal securities laws, including the Private Securities Litigation Reform Act of 1995. In addition, from time to time, Home Point Capital Inc. (“we,” “our,” “us” or the “Company”) or its representatives have made, or may make, forward-looking statements orally or in writing. These forward-looking statements include, but are not limited to, statements other than statements of historical facts, including among others, statements relating to the Company’s future financial performance, the Company’s business prospects and strategy, anticipated financial position, liquidity and capital needs, the industry in which the Company operates and other similar matters. Words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “could,” “would,” “will,” “may,” “can,” “continue,” “potential,” “should” and the negative of these terms or other comparable terminology often identify forward-looking statements. These forward-looking statements, which are based on currently available information, operating plans, and projections about events and trends, are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements. Factors, risks, and uncertainties that could cause actual outcomes and results to be materially different from those contemplated by forward-looking statements include, among others: our reliance on our financing arrangements to fund mortgage loans and otherwise operate our business; the dependence of our loan origination and servicing revenues on macroeconomic and U.S. residential real estate market conditions; counterparty risk; the requirement to make servicing advances that can be subject to delays in recovery or may not be recoverable in certain circumstances; competition for mortgage assets that may limit the availability of desirable originations, acquisitions and result in reduced risk-adjusted returns; our ability to continue to grow our loan origination business or effectively manage significant increases in our loan production volume; competition in the industry in which we operate; our success and growth of our production and servicing activities and the dependence upon our ability to adapt to and implement technological changes; the effectiveness of our risk management efforts; our ability to detect misconduct and fraud; any cybersecurity risks, cyber incidents and technology failures; our vendor relationships; our failure to deal appropriately with various issues that may give rise to reputational risk, including legal and regulatory requirements; risks and uncertainties associated with litigation, including any employment, intellectual property, consumer protection, class action and other litigation matters, and related unfavorable publicity; exposure to new risks and increased costs as a result of initiating new business activities or strategies or significantly expanding existing business activities or strategies; the impact of changes in political or economic stability or in government policies on our material vendors with operations in India; the impact of interest rate fluctuations; risks associated with hedging against interest rate exposure; the impact of any prolonged economic slowdown, recession or declining real estate values; risks associated with financing our assets with borrowings; risks associated with a decrease in value of our collateral; the dependence of our operations on access to our financing arrangements; risks associated with the financial and restrictive covenants included in our financing agreements; risks associated with higher risk loans that we service; risks associated with derivative financial instruments; our ability to foreclose on our mortgage assets in a timely manner or at all; our ability to obtain and/or maintain licenses and other approvals in those jurisdictions where required to conduct our business; legislative and regulatory changes that impact the mortgage loan industry or housing market; changes in regulations or the occurrence of other events that impact the business, operations or prospects of government agencies or such changes that increase the cost of doing business with such entities; and the spread of the COVID-19 outbreak and severe disruptions in the U.S. and global economy and financial markets it has caused. You should carefully consider the foregoing factors and the other risks and uncertainties that may affect the Company’s business, including those described in documents filed from time to time by the Company with the Securities and Exchange Commission. Many of the important factors that will determine these results are beyond our ability to control or predict. You are cautioned not to put undue reliance on any forward-looking statements, which speak only as of the date thereof. Except as required under applicable law, the Company does not assume any obligation to update these forward-looking statements.
 



Home Point Capital Inc.
Condensed Consolidated Statements of Income and Non-GAAP Measurements
(Unaudited)
($ amounts in thousands)

     
Q3 2021
     
Q2 2021
     
Q1 2021
     
Q4 2020
     
Q3 2020
     
Q2 2020
     
Q1 2020
     
Q4 2019
 
Revenue:
                                                               
Gain on loans, net
 
$
145,471
   
$
75,029
   
$
301,228
   
$
422,158
   
$
503,344
   
$
356,871
   
$
102,563
   
$
64,006
 
Loan fee income
   
34,484
     
39,500
     
44,115
     
35,488
     
28,205
     
20,394
     
12,031
     
12,284
 
Interest income
   
36,719
     
34,648
     
25,577
     
17,811
     
14,709
     
11,812
     
15,849
     
16,700
 
Interest expense
   
(45,532
)
   
(44,136
)
   
(32,935
)
   
(21,734
)
   
(17,559
)
   
(14,373
)
   
(15,913
)
   
(16,008
)
Interest Income (expense), net
   
(8,813
)
   
(9,488
)
   
(7,358
)
   
(3,922
)
   
(2,850
)
   
(2,561
)
   
(65
)
   
692
 
Loan servicing fees
   
91,831
     
85,584
     
70,338
     
54,328
     
48,350
     
42,308
     
43,246
     
40,139
 
Change in fair value of mortgage servicing rights