Good afternoon, and welcome to loanDepot's First Quarter 2024 Earnings Call. After the speaker's remarks, there will be a question-and-answer session. [Operator Instructions] I would now like to turn the call over to Gerhard Erdelji, Senior Vice President, Investor Relations. Please go ahead.

Thank you, and good afternoon, everyone. Thank you for joining loanDepot's First Quarter 2024 Earnings Call. Before we begin, I would like to remind everyone that this conference call may include forward-looking statements regarding the company's operating and financial performance in future periods. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including, but not limited to, guidance to our pull-through weighted rate lock volume, origination volume, pull-through weighted gain on sale margin, the impact of the cybersecurity incident that occurred in the first quarter of 2024 and expense trends. These statements are based on the company's current expectations and available information. Actual results for future periods may differ materially from these forward-looking statements due to risks or other factors that are described in the Risk Factors section of our filings with the SEC. A webcast and transcript of this call will be posted on the company's Investor Relations website at investors.loandepot.com under the Events & Presentations tab. On today's call, we have loanDepot President and Chief Executive Officer, Frank Martell; and Chief Financial Officer, Dave Hayes, to provide an overview of our quarter as well as our financial and operational results, outlook and to answer your questions. We are also joined by Chief Investment Officer, Jeff DerGurahian; and LDI Mortgage President, Jeff Walsh, to help address any questions you might have after our prepared remarks. And with that, I'll turn things over to Frank to get us started. Frank?

Thank you, Gerhard, and thank you all for joining us today. I look forward to sharing my perspectives on the market and on our results. We exited 2023 with positive top line momentum and continue to make important progress towards our Vision 2025 goals, including foundational investments in our people, products and technology platforms, which should serve us well as the mortgage market eventually stabilizes and recovers. The following four strategic pillars of Vision 2025 remain our north star for enabling value creation for our shareholders: pillar number one, transforming the company's origination business and driving purchase transactions with an expanded emphasis on purchase-driven lending and first-time homebuyers; pillar two, investing in profitable growth-generating initiatives and launching innovative new solutions that form the foundation of a life cycle relationship with first-time home buyers and owners; pillar three, reducing complexity and simplifying our organizational structure with an emphasis on driving client engagement, quality, automation and operating leverage; and pillar four, aggressively rightsizing loanDepot's cost structure to be in line with market realities while investing in our long-term goal of becoming the lowest-cost, highest-quality producer. During the first quarter, the company was significantly impacted by a cyber incident. As we've previously reported, we were able to restore operations relatively quickly, however, lost revenue and additional expenses impacted our first quarter financial results. I want to thank our entire team and our business partners who worked tirelessly to restore our normal business operations quickly and support our customers. Fortunately, we do not expect this incident to further disrupt our operations nor do we expect the incident to have a material impact for 2024 as a whole. Unfortunately, we live in a world where these types of acts are increasingly frequent and sophisticated, and our industry has not been spared. We sincerely regret any…

Thanks, Frank, and good afternoon, everyone. Our adjusted net loss decreased from $59 million in the first quarter of 2023 to $38 million in the first quarter of this year due both to higher revenues and lower expenses. During the first quarter, pull-through weighted rate lock volume was $4.7 billion, which represented 11% decrease from the first quarter of 2023 and reflected the impact of taking our origination platforms off-line for part of January in response to the cyber incident. Rate lock volume came in within the guidance we issued last quarter of $3.5 billion to $5.5 billion. Rate lock volume contributed to adjusted total revenue of $231 million compared to $226 million in the first quarter of 2023. We estimate first quarter revenue was adversely impacted by approximately $22 million from the time our systems were off-line and were unable to take customer locks. But bear in mind that we also did not incur associated volume-related expenses with that lost revenue. Our loan origination volume was $4.6 billion for the quarter, a decrease of 8% from the first quarter of 2023. This was also within the guidance we issued last quarter of between $3.5 billion and $5.5 billion. The year-over-year increase in revenue is primarily a result of higher servicing fee income and pull-through weighted gain on sale margin. Our pull-through weighted gain on sale margin for the first quarter came in at 274 basis points, within our guidance of 270 to 300 basis points and compared to 226 basis points in the first quarter of 2023. Our higher gain on sale margin was primarily due to an overall increase in the profit margins of our loan production. We also benefited from a lower loss provision due to improved loan quality and a higher profit margin and volume on…

[Operator Instructions] Your first question comes from the line of Doug Harter from UBS.

Can you just confirm the expense guidance that you just gave, that expenses, you're looking for them to be up even with the absence of the $15 million of cyber-related expenses?

Yes, that's correct. This is David Hayes. It's just driven really by the pull-through of funded volume expectations going up from Q1 to Q2.

All right. I appreciate that. And then turning to the 2025 debt maturity, can you talk about any progress that you've made there and thoughts around timing as to when there could be some resolution on that maturity?

Sure. Again, this is David Hayes. As mentioned in my prepared remarks, we are actively looking at that. We've engaged some advisers and are working through a series of options on that front. I think we talked about this a little bit on the last quarter call, too. We don't envision seeing or wanting to see these bonds go current. So we're looking to take care of them in the second or third quarter. It's been pretty constructive markets. So we're going to transact when it makes the most sense for the company, but it's on the near-term horizon.

[Operator Instructions] Your next question comes from the line of Kyle Joseph of Jefferies.

Just on MSR sales this quarter, you guys bleed that out over time. Was that done in bulk? Or just any color on bids there, too.

Sure. This is Jeff DerGurahian. As we stated before, we're always monitoring the MSR market, and we'll opportunistically transact where it makes sense. It was a relatively small or immaterial amount of the portfolio where we took the opportunity to transact, and we'll continue to do the same way going forward.

Got it. And then just a quick follow-up for modeling, what do you think in terms of cash balances going forward?

Yes, it's obviously still a pretty challenging market, so we're going to continue to maintain this posture of having sort of heightened levels of liquidity. We kept the balances over $600 million. We'll continue to try to manage that number around similar levels for the remainder of the year.

There are no further questions at this time. Frank Martell, I turn the call back over to you.

Okay. Thank you, operator. And thanks, everybody, again, for joining us today. We appreciate the questions. And on behalf of Dave and the rest of the team, I want to thank everybody and our key stakeholders for their support. We're going to continue to keep everybody appraised as we progress through our Vision 2025 imperatives. So thank you again, and have a great day.

This concludes today's conference call. You may now disconnect.