Guild Mortgage reported its first quarterly loss in three years. This was due to the impact of the mortgage industry turmoil that left its mark on the company and created opportunities for it to grow. However, servicing income didn’t suffice to offset the dwindling borrower demand during the last three months of the year. Guild Holdings, the parent company of the San Diego-based mortgage lender posted a $15million net loss. This is a 25 cent decrease per share. The fourth quarter number fell 119% from $77.4million worth of profit three months prior and 135% from $42.2million over the same period in 2021. However, full-year net income rose 15.8% to $328.6million compared to $283.8 in 2021. This could be due to the company’s business approach, its leaders stated. “Our model is built around our retail strategy, which focuses only on servicing the loans we originate,” Guild CEO Mary Ann McGarry stated in its earnings call. We see greater consistency across interest rates by focusing on the purchase business. We believe that our earnings are more durable and long-lasting in all market cycles because we originate our service volume. The company’s bottom line was still affected by the industrywide plunge in originations, particularly refinances. After a three-month period of $1.5 million profit, Guild’s originations segment suffered a net loss of $26.6 million in the fourth quarter. The loan production volume was $3 billion. The majority of the loan production came from purchase originations, which accounted for 93% of the total. Full-year origination income was $64 million, down from $392.8 million in 2021. The gain on sale margin of originated loans fell to 331 basis point in the fourth quarter from 354 in 2018. The gain on sale for all of 2022 was 368 basis points. This is mainly due to adjustments to the fair values of mortgage servicing rights. Guild’s in-house servicing portfolio increased by 1% to $78.9 trillion. The segment’s full-year net income accelerated to $409million, compared with $55.6 million in 2021. This represents a 48.6% decline. Many mergers and acquisitions have taken place in the wake of home lending’s dramatic decline over the past year. Guild was one of these. Inlanta Mortgage, a Wisconsin-based mortgage company, was purchased by Guild in its fourth quarter. Legacy Mortgage was later acquired in Albuquerque (New Mexico) at the beginning of this year. Both deals helped to increase Guild’s regional footprints. This is a strategy that the company has used to grow in the past. According to President Terry Schmidt, Guild now ranks fifth in Wisconsin’s purchase market and second in New Mexico. Schmidt stated that “Looking ahead, it seems we can continue to realize attractive growth via M&A, especially as we anticipate continued dislocation in this market.” McGarry stated that the company had introduced more than 175 products in the last 12 months to support its clients. He also mentioned potential dealmaking. We are excited about the opportunities we see ahead of our company. “Since Guild’s purchase in February of Legacy Mortgage, several other acquisitions of lenders have been made. Notable mergers between servicers and software platforms for mortgage lending have also been reported. Investors reacted to Guild’s earnings results, which were below analysts’ expectations. The stock price fell 12.2% between Thursday’s closing and Friday’s trading start, from $11.51 – $10.10. The stock had risen above $11.00 by afternoon.