10-Q 1 uwmc-20240331.htm 10-Q uwmc-20240331
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
OR
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________

Commission file number 001-39189

UWM HOLDINGS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
84-2124167
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
585 South Boulevard E.
Pontiac,MI48341
(Address of Principal Executive Offices)
(Zip Code)
(800) 981-8898
Registrant's telephone number, including area code
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, par value $0.0001 per shareUWMCNew York Stock Exchange
Warrants, each warrant exercisable for one share of Class A Common StockUWMCWSNew York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  o 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes  x   No  o 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
Accelerated filer
x
Non-accelerated filer  
Smaller reporting company
 
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. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No x

As of May 6, 2024, the registrant had 95,577,980 shares of Class A common stock outstanding and 1,502,069,787 shares of Class D common stock outstanding.


Table of Contents





PART I
Item 1. Financial Statements
UWM HOLDINGS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except shares and per share amounts)
 March 31, 2024December 31, 2023
Assets
(Unaudited)
Cash and cash equivalents$605,639 $497,468 
Mortgage loans at fair value7,338,135 5,449,884 
Derivative assets34,050 33,019 
Investment securities at fair value, pledged 108,323 110,352 
Accounts receivable, net554,443 512,070 
Mortgage servicing rights3,191,803 4,026,136 
Premises and equipment, net145,265 146,417 
Operating lease right-of-use asset, net
(includes $96,358 and $97,596 with related parties)
97,801 99,125 
Finance lease right-of-use asset
(includes $24,286 and $24,802 with related parties)
26,890 29,111 
Loans eligible for repurchase from Ginnie Mae577,487 856,856 
Other assets117,498 111,416 
Total assets$12,797,334 $11,871,854 
Liabilities and equity
Warehouse lines of credit$6,681,917 $4,902,090 
Derivative liabilities26,918 40,781 
Secured lines of credit200,000 750,000 
Borrowings against investment securities94,064 93,814 
Accounts payable, accrued expenses and other477,765 469,101 
Accrued distributions and dividends payable159,702 159,572 
Senior notes1,989,250 1,988,267 
Operating lease liability
(includes $103,194 and $104,495 with related parties)
104,637 106,024 
Finance lease liability
(includes $25,851 and $26,260 with related parties)
28,536 30,678 
Loans eligible for repurchase from Ginnie Mae577,487 856,856 
Total liabilities10,340,276 9,397,183 
Equity
Preferred stock, $0.0001 par value - 100,000,000 shares authorized, none issued and outstanding as of March 31, 2024 or December 31, 2023
  
Class A common stock, $0.0001 par value - 4,000,000,000 shares authorized, 94,945,635 and 93,654,269 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively
9 10 
Class B common stock, $0.0001 par value - 1,700,000,000 shares authorized, none issued and outstanding as of March 31, 2024 or December 31, 2023
  
Class C common stock, $0.0001 par value - 1,700,000,000 shares authorized, none issued and outstanding as of March 31, 2024 or December 31, 2023
  
Class D common stock, $0.0001 par value - 1,700,000,000 shares authorized, 1,502,069,787 shares issued and outstanding as of March 31, 2024 and December 31, 2023
150 150 
Additional paid-in capital2,085 1,702 
Retained earnings111,980 110,690 
Non-controlling interest2,342,834 2,362,119 
Total equity2,457,058 2,474,671 
Total liabilities and equity$12,797,334 $11,871,854 

See accompanying Notes to the Condensed Consolidated Financial Statements.


UWM HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except shares and per share amounts)
(Unaudited)

 For the three months ended March 31,
 20242023
Revenue
Loan production income$298,954 $205,424 
Loan servicing income184,702 218,557 
Change in fair value of mortgage servicing rights(15,563)(337,287)
Interest income101,863 74,580 
Total revenue, net569,956 161,274 
Expenses
Salaries, commissions and benefits154,241 121,003 
Direct loan production costs31,436 16,483 
Marketing, travel, and entertainment19,111 17,210 
Depreciation and amortization11,340 11,670 
General and administrative40,809 34,619 
Servicing costs30,324 36,862 
Interest expense98,668 63,284 
Other income
(237)(241)
Total expenses385,692 300,890 
Earnings (loss) before income taxes
184,264 (139,616)
Provision (benefit) for income taxes
3,733 (1,003)
Net income (loss)
180,531 (138,613)
Net income (loss) attributable to non-controlling interest
171,801 (126,672)
Net income (loss) attributable to UWM Holdings Corporation
$8,730 $(11,941)
Earnings (loss) per share of Class A common stock
 (see Note 17):
Basic$0.09 $(0.13)
Diluted$0.09 $(0.13)
Weighted average shares outstanding:
Basic94,365,991 92,920,794 
Diluted1,598,647,205 92,920,794 

See accompanying Notes to the Condensed Consolidated Financial Statements.



UWM HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(in thousands, except shares and per share amounts)
(Unaudited)
Class A Common Stock SharesClass A Common Stock AmountClass D Common Stock SharesClass D Common Stock AmountAdditional 
Paid-in Capital
Retained
Earnings
Non-controlling InterestTotal
Balance, January 1, 202392,575,974 $9 1,502,069,787 $150 $903 $142,500 $3,028,131 $3,171,693 
Net loss— — — — — (11,941)(126,672)(138,613)
Class A common stock dividends— — — — — (9,310)— (9,310)
Member distributions to SFS Corp.— — — — — — (150,207)(150,207)
Stock-based compensation 525,997 — — — 133 — 2,153 2,286 
Re-measurement of non-controlling interest due to change in parent ownership and other— — — — — 887 (2,194)(1,307)
Balance, March 31, 202393,101,971 $9 1,502,069,787 $150 $1,036 $122,136 $2,751,211 $2,874,542 
Balance, January 1, 202493,654,269 $10 1,502,069,787 $150 $1,702 $110,690 $2,362,119 $2,474,671 
Net income     8,730 171,801 180,531 
Class A common stock dividends     (9,495) (9,495)
Member distributions to SFS Corp.      (194,261)(194,261)
Stock-based compensation 1,291,366 (1)  383  6,131 6,513 
Re-measurement of non-controlling interest due to change in parent ownership and other     2,055 (2,956)(901)
Balance, March 31, 202494,945,635 $9 1,502,069,787 $150 $2,085 $111,980 $2,342,834 $2,457,058 
See accompanying Notes to the Condensed Consolidated Financial Statements.


UWM HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)

 For the three months ended March 31,
 20242023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)
$180,531 $(138,613)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Reserve for representations and warranties10,463 7,527 
Capitalization of mortgage servicing rights(535,951)(525,396)
Change in fair value of mortgage servicing rights15,563 337,287 
Depreciation & amortization12,323 12,653 
Stock-based compensation expense 5,876 2,482 
Decrease (increase) in fair value of investment securities
269 (2,600)
Increase (decrease) in fair value of warrants liability(686)2,098 
Decrease (increase) in:
Mortgage loans at fair value(1,888,251)2,334,701 
Derivative assets(1,031)21,733 
Other assets35,719 (27,818)
Increase (decrease) in:
Derivative liabilities(13,863)12,994 
Other liabilities(23,702)(44,126)
Net cash (used in) provided by operating activities
(2,202,740)1,992,922 
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of premises and equipment(6,973)(7,952)
Net proceeds from sale of mortgage servicing rights1,293,861 650,707 
Proceeds from principal payments on investment securities1,760 1,614 
Margin calls on borrowings against investment securities(1,146) 
Net cash provided by investing activities1,287,502 644,369 
CASH FLOWS FROM FINANCING ACTIVITIES
Net repayments under warehouse lines of credit1,779,826 (2,184,157)
Repayments of finance lease liabilities(2,142)(6,692)
Repayments under equipment notes payable (505)
Borrowings under secured lines of credit100,000 500,000 
Repayments under secured lines of credit(650,000)(750,000)
Borrowings against investment securities94,064  
Repayments of borrowings against investment securities(93,814) 
Dividends paid to Class A common stockholders(9,365)(9,258)
Member distributions paid to SFS Corp. (194,261)(150,207)
Other financing activities(899)(1,307)
Net cash provided by (used in) financing activities
1,023,409 (2,602,126)
INCREASE IN CASH AND CASH EQUIVALENTS
108,171 35,165 
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD497,468 704,898 
CASH AND CASH EQUIVALENTS, END OF THE PERIOD$605,639 $740,063 
SUPPLEMENTAL INFORMATION
Cash paid for interest$68,839 $63,322 
Cash paid (received) for taxes
363 (124)
See accompanying Notes to the Condensed Consolidated Financial Statements.



UWM HOLDINGS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
UWM Holdings Corporation, through its consolidated subsidiaries (collectively, the “Company”), engages in the origination, sale and servicing of residential mortgage loans. The Company is organized in Delaware but based in Michigan, and originates and services loans throughout the U.S. The Company is approved as a Title II, non-supervised direct endorsement mortgagee with the U.S. Department of Housing and Urban Development (or “HUD”). In addition, the Company is an approved issuer with the Government National Mortgage Association (or “Ginnie Mae”), as well as an approved seller and servicer with the Federal National Mortgage Association (or “Fannie Mae”) and the Federal Home Loan Mortgage Corporation (or “Freddie Mac”).
The Company (f/k/a Gores Holdings IV, Inc.) was incorporated in Delaware on June 12, 2019. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. On September 22, 2020, the Company entered into a Business Combination Agreement (the “Business Combination Agreement”) by and among the Company, SFS Holding Corp., a Michigan corporation (“SFS Corp.”), United Wholesale Mortgage, LLC, a Michigan limited liability company (“UWM”), and UWM Holdings, LLC, a newly formed Delaware limited liability company (“Holdings LLC” and, together with UWM, the “UWM Entities”). The business combination with the UWM Entities closed on January 21, 2021.
Prior to the closing of the business combination with the UWM Entities, SFS Corp. was the sole member of UWM, which had one unit authorized, issued and outstanding. On January 21, 2021, SFS Corp. contributed its equity interest in UWM to Holdings LLC and adopted the Amended and Restated Operating Agreement to admit Holdings LLC as UWM's sole member and its manager. Upon completion of the business combination transaction, (i) Holdings LLC issued approximately 6% of its units (Class A Common Units) to the Company, (ii) SFS Corp. retained approximately 94% of the units (Class B Common Units) in Holdings LLC and accordingly retained approximately 94% of the economic ownership interest of the combined company and (iii) Holdings LLC became a consolidated subsidiary of the Company, as the Company is the sole managing member of Holdings LLC. The economic interest in Holdings LLC owned by SFS Corp. is presented as a non-controlling interest in these condensed consolidated financial statements. See Note 11 - Non-Controlling Interests for further information.
Following the consummation of the transactions contemplated by the Business Combination Agreement, the Company is organized in an “Up-C” structure in which UWM (the operating subsidiary) is held directly by Holdings LLC, and the Company’s only material direct asset consists of Class A Common Units in Holdings LLC. The Company’s current capital structure authorizes Class A common stock, Class B common stock, Class C common stock and Class D common stock. The Class A common stock and Class C common stock each provide holders with one vote on all matters submitted to a vote of stockholders, and the Class B common stock and Class D common stock each provide holders with 10 votes on all matters submitted to a vote of stockholders. The holders of Class C common stock and Class D common stock do not have any of the economic rights (including rights to dividends and distributions upon liquidation) provided to holders of Class A common stock and Class B common stock. Each Holdings LLC Class B Common Unit held by SFS Corp. may be exchanged at the option of the Company, along with its stapled share of Class D common stock, for either, (a) cash or (b) one share of the Company’s Class B common stock. Each share of Class B common stock is convertible into one share of Class A common stock upon the transfer or assignment of such share from SFS Corp. to a non-affiliated third-party. See Note 11 - Non-Controlling Interests for further information.
Pursuant to the Business Combination Agreement, SFS Corp. is entitled to receive an aggregate of up to 90,761,687 earn-out shares in the form of Class B Common Units in Holdings LLC and Class D common shares upon attainment of certain stock price targets prior to January 2026. There are four different triggering events that affect the number of earn-out shares that will be issued based upon the per share price of Class A common stock ranging from $13.00 to $19.00 per share. The Company accounts for the potential earn-out shares as a component of stockholders’ equity in accordance with the applicable guidance in U.S. GAAP. See Note 17 - Earnings Per Share for further information.
Upon completion of the business combination transaction, the directors and officers of Gores Holdings IV, Inc. (the “Gores Directors and Officers”) resigned, the Company appointed new directors to its Board, and certain officers of UWM became officers of the Company. Pursuant to the Business Combination Agreement, the Company has potential indemnification obligations to the Gores Directors and Officers for costs or losses incurred prior to or after the closing of the business combination transaction that arose by reason of the fact that he or she is or was a director or officer of Gores Holdings IV, Inc.


The Gores Directors and Officers have been named as defendants in class action suits in Delaware Chancery Court in which it is alleged that they breached their fiduciary duties to shareholders of Gores Holdings, IV. Pursuant to its obligations under the Business Combination Agreement, to the extent that it is determined that the Gores Directors and Officers are entitled to indemnification, the Company is obligated to indemnify them in connection with these lawsuits. The Company has insurance which it believes will cover any material liability that could arise pursuant to its indemnification obligations to the Gores Directors and Officers. This insurance includes two separate towers of coverage with limits in excess of the Company's current estimate of any reasonably possible liability, and a deductible of $20.5 million.
Basis of Presentation and Consolidation
The condensed consolidated financial statements are unaudited and presented in U.S. dollars. They have been prepared in accordance with U.S. GAAP pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In our opinion, these condensed consolidated financial statements include all normal and recurring adjustments considered necessary for a fair statement of our results of operations, financial position and cash flows for the periods presented. However, our results of operations for any interim period are not necessarily indicative of the results that may be expected for a full fiscal year or for any other future period.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Loans Eligible for Repurchase from Ginnie Mae
For certain loans sold to Ginnie Mae, the Company as the servicer has the unilateral right to repurchase any individual loan in a Ginnie Mae pool if that loan meets defined criteria (generally loans that are more than 90 days past due). When the Company has the unilateral right to repurchase the delinquent loans, the previously sold assets are required to be re-recognized on the condensed consolidated balance sheets as assets and corresponding liabilities at the loan's unpaid principal balance, regardless of the Company’s intent to exercise its option to repurchase. The recognition of previously sold loans does not impact the accounting for the previously recognized mortgage servicing rights (or "MSRs").
Income Taxes
The Company accounts for income taxes during interim periods by applying an estimated annual effective tax rate to year-to-date earnings (loss) before income taxes to compute the year-to-date tax expense (or benefit). At the end of each interim period, the Company estimates the effective tax rate expected to be applicable for the full fiscal year, adjusted for discrete items, if any, that arise during the period. See Note 15 – Income Taxes for further information.
Tax Receivable Agreement
The Company has entered into a Tax Receivable Agreement ("TRA") with SFS Corp. that will obligate the Company to make payments to SFS Corp. of 85% of the amount of cash savings, if any, in federal, state and local income tax that the Company actually realizes as a result of (i) certain increases in tax basis resulting from exchanges of Holdings LLC common units; (ii) imputed interest deemed to be paid by the Company as a result of payments it makes under the tax receivable agreement; (iii) certain increases in tax basis resulting from payments the Company makes under the tax receivable agreement; and (iv) disproportionate allocations (if any) of tax benefits to the Company which arise from, among other things, the sale of certain assets as a result of taxable income allocation rules in the United States. The Company will retain the benefit of the remaining 15% of these tax savings.
The Company accounts for liabilities arising from the TRA as a loss contingency recorded within "Accounts payable, accrued expenses and other." Changes in the liability are measured and recorded when estimated amounts due under the TRA are probable and can be reasonably estimated, and reported as part of "Other expense/(income)" in the condensed consolidated statements of operations. See Note 9 - Accounts Payable, Accrued Expenses and Other for further information.
Related Party Transactions
The Company enters into various transactions with related parties. See Note 14 – Related Party Transactions for further information.



Public and Private Warrants
As part of Gores Holdings IV, Inc.'s initial public offering ("IPO") in January 2020, Gores Holdings IV, Inc. issued to third party investors 42.5 million units, consisting of one share of Class A common stock of Gores Holdings IV, Inc. and one-fourth of one warrant, at a price of $10.00 per unit. Each whole warrant entitles the holder to purchase one share of Class A common stock at an exercise price of $11.50 per share (the “Public Warrants”). Simultaneously with the closing of the IPO, Gores Holdings IV, Inc. completed the private sale of 5.25 million warrants to Gores Holdings IV, Inc.'s sponsor at a purchase price of $2.00 per warrant (the “Private Warrants”). Each Private Warrant allows the sponsor to purchase one share of Class A common stock at $11.50 per share. Upon the closing of the business combination transaction, the Company had 10,624,987 Public Warrants and 5,250,000 Private Warrants outstanding.
The Private Warrants and the shares of common stock issuable upon the exercise of the Private Warrants were not transferable, assignable or salable until after the completion of the business combination, subject to certain limited exceptions. Additionally, the Private Warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
The Company evaluated the Public and Private Warrants under applicable U.S. GAAP and concluded that they do not meet the criteria to be classified in stockholders’ equity due to certain terms of the warrants. Since the Public and Private Warrants meet the definition of derivatives, the Company recorded these warrants as liabilities on the balance sheet at fair value upon the closing of the business combination transaction and subsequently (recorded within "Accounts payable, accrued expenses and other"), with the change in their respective fair values recognized in the condensed consolidated statement of operations (recorded within "Other expense/(income)").
Stock-Based Compensation
Effective upon the closing of the business combination transaction, the Company adopted the UWM Holdings Corporation 2020 Omnibus Incentive Plan (the “2020 Plan”) which was approved by stockholders on January 20, 2021. The 2020 Plan allows for the grant of stock options, restricted stock, restricted stock units (“RSUs”), and stock appreciation rights. Pursuant to the 2020 Plan, the Company reserved a total of 80,000,000 shares of common stock for issuance of stock-based compensation awards, and 68,744,413 shares remained available for issuance under the 2020 Plan as of March 31, 2024. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period based on the fair value of the award on the date of grant and is included in "Salaries, commissions and benefits" on the condensed consolidated statements of operations. The Company made a policy election to recognize the effects of forfeitures as they occur. See Note 16 – Stock-based Compensation for further information.
Recently Adopted Accounting Standards
In March 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2023-1, Leases (Topic 842): Common Control Arrangements, which amends certain provisions of ASU 2016-2, Leases (Topic 842). This guidance requires all lessees in a lease with a lessor under common control to amortize leasehold improvements over the useful life of the common control group and provides new guidance for recognizing a transfer of assets between entities under common control as an adjustment to equity when the lessee no longer controls the use of the underlying asset. There was no impact on the Company's condensed consolidated financial statements from adopting this standard effective the fiscal year beginning January 1, 2024.

Accounting Standards Issued but Not Yet Effective
In November 2023, the FASB issued ASU 2023-7, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires enhanced disclosure of significant segment expenses on an annual and interim basis. The ASU is effective on a retrospective basis for annual periods beginning after December 15, 2023, and interim periods beginning after December 15, 2024. Early adoption is permitted. The Company will include the required disclosures in its consolidated financial statements once adopted.
In December 2023, the FASB issued ASU 2023-9, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024, and early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company will include the required disclosures in its condensed consolidated financial statements once adopted.


NOTE 2 – MORTGAGE LOANS AT FAIR VALUE
The table below includes the estimated fair value and unpaid principal balance (“UPB”) of mortgage loans that have contractual principal amounts and for which the Company has elected the fair value option. The fair value option has been elected for mortgage loans, as this accounting treatment best reflects the economic consequences of the Company’s mortgage origination and related hedging and risk management activities. The difference between the UPB and estimated fair value is made up of the premiums paid on mortgage loans, as well as the fair value adjustment as of the balance sheet date. The change in fair value adjustment is recorded in the “Loan production income” line item of the condensed consolidated statements of operations.
(In thousands)March 31,
2024
December 31,
2023
Mortgage loans, unpaid principal balance$7,244,605 $5,380,119 
Premiums paid on mortgage loans65,761 55,112 
Fair value adjustment27,769 14,653 
Mortgage loans at fair value$7,338,135 $5,449,884 
NOTE 3 – DERIVATIVES
The Company enters into interest rate lock commitments (“IRLCs”) to originate residential mortgage loans at specified interest rates and terms within a specified period of time with customers who have applied for a loan and may meet certain credit and underwriting criteria. To determine the fair value of the IRLCs, each contract is evaluated based upon its stage in the application, approval and origination process for its likelihood of consummating the transaction (or “pullthrough”). Pullthrough is estimated based on changes in market conditions, loan stage, and actual borrower behavior using a historical analysis of IRLC closing rates. Generally, the further into the process the more likely that the IRLC will convert to a loan. The blended average pullthrough rate was 79% and 76% as of March 31, 2024 and December 31, 2023, respectively. The Company primarily uses forward loan sale commitments (“FLSCs”) to economically hedge its pipeline of IRLCs and mortgage loans at fair value.     
The notional amounts and fair values of derivative financial instruments not designated as hedging instruments were as follows (in thousands):
 March 31, 2024December 31, 2023 
Fair valueFair value
 Derivative
assets
Derivative
liabilities
Notional
Amount
Derivative
assets
Derivative
liabilities
Notional
Amount
 
IRLCs$25,359 $5,443 $9,339,930 (a) $29,623 $2,933 $6,264,727 
(a) 
FLSCs8,691 21,475 12,851,505 3,396 37,848 10,469,975  
Total$34,050 $26,918 $33,019 $40,781 
(a)Notional amounts have been adjusted for pullthrough rates of 79% and 76%, respectively.













NOTE 4 – ACCOUNTS RECEIVABLE, NET
The following summarizes accounts receivable, net (in thousands):
 March 31,
2024
December 31,
2023
Servicing fees$204,097 $164,629 
Servicing advances151,533 177,021 
Receivables from sales of servicing 131,965 48,936 
Investor receivables46,638 97,109 
Origination receivables15,926 26,426 
Derivative settlements receivable8,498 1,794 
Other receivables609 753 
Provision for current expected credit losses(4,823)(4,598)
Total accounts receivable, net$554,443 $512,070 
The Company periodically evaluates the carrying value of accounts receivable balances with delinquent receivables being written-off based on specific credit evaluations and circumstances of the debtor.
NOTE 5 – MORTGAGE SERVICING RIGHTS
Mortgage servicing rights are recognized on the condensed consolidated balance sheets when loans are sold and the associated servicing rights are retained. The Company's MSRs are measured at fair value, which is determined using a valuation model that calculates the present value of estimated future net servicing cash flows. The model includes estimates of prepayment speeds, discount rate, cost to service, float earnings, contractual servicing fee income, and ancillary income and late fees, among others. These estimates are supported by market and economic data collected from various external sources.
The unpaid principal balance of mortgage loans serviced for others approximated $229.7 billion and $299.5 billion at March 31, 2024 and December 31, 2023, respectively. Conforming conventional loans serviced by the Company have previously been sold to Fannie Mae and Freddie Mac on a non-recourse basis, whereby credit losses are generally the responsibility of Fannie Mae and Freddie Mac, and not the Company. Loans serviced for Ginnie Mae are insured by the FHA, guaranteed by the VA, or insured by other applicable government programs. While the above guarantees and insurance are the responsibility of those parties, the Company is still subject to potential losses related to its servicing of these loans. Those estimated losses are incorporated into the valuation of MSRs.
The following table summarizes changes in the MSR assets for the three months ended March 31, 2024 and 2023 (in thousands):
For the three months ended March 31,
20242023
Fair value, beginning of period$4,026,136 $4,453,261 
Capitalization of MSRs535,951 525,396 
MSR and excess servicing sales
(1,383,098)(684,621)
Changes in fair value:
Due to changes in valuation inputs or assumptions
141,059 (222,915)
Due to collection/realization of cash flows/other(128,245)(96,251)
Fair value, end of period$3,191,803 $3,974,870 









The following is a summary of the components of the total change in fair value of MSRs as reported in the condensed consolidated statements of operations (in thousands):
For the three months ended March 31,
20242023
Changes in fair value:
Due to changes in valuation inputs and assumptions$141,059 $(222,915)
Due to collection/realization of cash flows and other(128,245)(96,251)
Net reserves and transaction costs on sales of servicing rights(28,377)(18,121)
Changes in fair value of mortgage servicing rights$(15,563)$(337,287)
During the three months ended March 31, 2024 and 2023, the Company sold MSRs on loans with an aggregate UPB of approximately $87.8 billion and $34.3 billion, respectively, for proceeds of approximately $1.2 billion and $379.1 million, respectively. In addition, during the three months ended March 31, 2024 and 2023, the Company sold excess servicing cash flows on certain agency loans with a total UPB of approximately $19.4 billion and $63.4 billion, respectively, for proceeds of approximately $150.9 million and $305.5 million, respectively. In connection with these sales, the Company recorded a net $28.4 million and $18.1 million, respectively, for its estimated obligation for protection provisions granted to the buyers and transaction costs, which is reflected as part of the change in fair value of MSRs in the condensed consolidated statements of operations.
The following table summarizes the loan servicing income recognized during the three months ended March 31, 2024 and 2023, respectively (in thousands):
For the three months ended March 31,
20242023
Contractual servicing fees$179,592 $214,756 
Late, ancillary and other fees5,110 3,801 
Loan servicing income$184,702 $218,557 
The key unobservable inputs used in determining the fair value of the Company’s MSRs were as follows at March 31, 2024 and December 31, 2023, respectively:
 March 31,
2024
December 31,
2023
RangeWeighted AverageRangeWeighted Average
Discount rates10.0 %16.0 %11.1 %10.0 %16.0 %11.1 %
Annual prepayment speeds5.4 %21.5 %8.2 %5.3 %21.9 %9.6 %
Cost of servicing$74 $111 $85 $74 $111 $84 
The hypothetical effect of adverse changes in these key assumptions would result in a decrease in fair values as follows at March 31, 2024 and December 31, 2023, respectively, (in thousands):
 March 31,
2024
December 31,
2023
Discount rate:
+ 10% adverse change – effect on value$(116,251)$(140,727)
+ 20% adverse change – effect on value(222,615)(269,702)
Prepayment speeds:
+ 10% adverse change – effect on value$(86,217)$(124,651)
+ 20% adverse change – effect on value(166,763)(240,082)
Cost of servicing:
+ 10% adverse change – effect on value$(25,030)$(31,869)
+ 20% adverse change – effect on value(50,060)(63,738)
These sensitivities are hypothetical and should be used with caution. As the table demonstrates, the Company’s methodology for estimating the fair value of MSRs is highly sensitive to changes in assumptions. For example, actual


prepayment experience may differ, and any difference may have a material effect on MSR fair value. Changes in fair value resulting from changes in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, in the table above, the effect of a variation in a particular assumption of the fair value of the MSRs is calculated without changing any other assumption; in reality, changes in one factor may be associated with changes in another (for example, decreases in market interest rates may indicate higher prepayments; however, this may be partially offset by lower prepayments due to other factors such as a borrower’s diminished opportunity to refinance, or lower discount rates as investors may accept lower returns in a lower interest rate environment), which may magnify or counteract the sensitivities. Thus, any measurement of MSR fair value is limited by the conditions existing and assumptions made as of a particular point in time. Those assumptions may not be appropriate if they are applied to a different point in time.
NOTE 6 – WAREHOUSE AND OTHER SECURED LINES OF CREDIT
Warehouse Lines of Credit
The Company had the following warehouse lines of credit with financial institutions as of March 31, 2024 and December 31, 2023, respectively, (in thousands):
Warehouse Lines of Credit 1
Date of Initial Agreement With Warehouse LenderCurrent Agreement Expiration DateTotal Advanced Against Line as of March 31,
2024
Total Advanced Against Line as of December 31,
2023
Master Repurchase Agreement ("MRA") Funding Limits as of March 31, 2024:
$500 Million2/29/20125/17/2024$495,494 $489,117 
$1.0 Billion7/24/20208/29/2024667,436 791,760 
$200 Million
10/30/202011/5/2024134,726 75,691 
$300 Million2/26/201612/19/2024298,965 271,179 
$1.0 Billion
7/10/20121/6/2025581,289 175,604 
$2.5 Billion
12/31/20142/19/20251,699,090 1,252,169 
$500 Million
3/7/20192/20/2025375,601 213,556 
$250 Million
4/23/20214/23/2025220,407 103,729 
$3.0 Billion
5/9/201911/28/20252,173,445 1,475,368 
Early Funding:
$600 Million (ASAP + - see below)No expiration  
$750 Million (EF - see below)No expiration35,464 53,917 
$6,681,917 $4,902,090 
All interest rates are variable based upon a spread to SOFR or other alternative index.
1 An aggregate of $750.0 million of these line amounts is committed as of March 31, 2024.
We are an approved lender for loan early funding facilities with Fannie Mae through its As Soon As Pooled Plus (“ASAP+”) program and Freddie Mac through its Early Funding (“EF”) program. As an approved lender for these early funding programs, we enter into an agreement to deliver closed and funded one-to-four family residential mortgage loans, each secured by related mortgages and deeds of trust, and receive funding in exchange for such mortgage loans in some cases before we have grouped them into pools to be securitized by Fannie Mae or Freddie Mac. All such mortgage loans must adhere to a set of eligibility criteria to be acceptable. As of March 31, 2024, no amount was outstanding through the ASAP+ program and $35.5 million was outstanding through the EF program.
As of March 31, 2024, the Company had pledged mortgage loans at fair value as collateral under the above warehouse lines of credit. The above agreements also contain covenants which include certain financial requirements, including maintenance of minimum tangible net worth, minimum liquidity, maximum debt to net worth ratio, and net income, as defined in the agreements. The Company was in compliance with all of these covenants as of March 31, 2024.
MSR Facilities
In the third quarter of 2022, the Company's consolidated subsidiary, UWM, entered into a Loan and Security Agreement with Citibank, N.A., providing UWM with up to $1.5 billion of uncommitted borrowing capacity to finance the


origination, acquisition or holding of certain mortgage servicing rights (the “MSR Facility”). The MSR Facility is collateralized by all of UWM's mortgage servicing rights that are appurtenant to mortgage loans pooled in securitization by Fannie Mae or Freddie Mac that meet certain criteria. Available borrowings under the MSR Facility are based on the fair market value of the collateral. Borrowings under the MSR Facility bear interest based on SOFR plus an applicable margin. The MSR Facility contains covenants which include certain financial requirements, including maintenance of minimum tangible net worth, minimum liquidity, maximum debt to net worth ratio, and net income as defined in the agreement. As of March 31, 2024, the Company was in compliance with all applicable covenants. The MSR Facility has a maturity date of November 5, 2024. As of March 31, 2024 and December 31, 2023, $100.0 million and $500.0 million, respectively, was outstanding under the MSR Facility.
In the first quarter of 2023, the Company's consolidated subsidiary, UWM, entered into a Credit Agreement with Goldman Sachs Bank USA, providing UWM with up to $500.0 million of uncommitted borrowing capacity to finance the origination, acquisition or holding of certain mortgage servicing rights (the "GNMA MSR facility"). The GNMA MSR facility is collateralized by all of UWM's mortgage servicing rights that are appurtenant to mortgage loans pooled in securitization by Ginnie Mae that meet certain criteria. Available borrowings under the GNMA MSR facility are based on the fair market value of the collateral. Borrowings under the GNMA MSR facility bear interest based on SOFR plus an applicable margin. The GNMA MSR Facility contains covenants which include certain financial requirements, including maintenance of minimum tangible net worth, minimum liquidity, maximum debt to net worth ratio, and net income as defined in the agreement. On March 20, 2024, UWM entered into the First Amendment to Credit Agreement (the “First Amendment”) with Goldman Sachs Bank USA. The First Amendment removed the minimum utilization fee on undrawn amounts and extended the maturity date of the GNMA MSR Facility. All other material terms of the GNMA MSR facility remained the same. As of March 31, 2024, the Company was in compliance with all applicable covenants. The draw period for the GNMA MSR facility ends on March 20, 2026, and the facility has a maturity date of March 20, 2027. As of March 31, 2024 and December 31, 2023, $100.0 million and $250.0 million, respectively, was outstanding under the GNMA MSR facility.
Outstanding borrowings under the MSR facilities are reported within the "Secured lines of credit" financial statement line item on the condensed consolidated balance sheets.
NOTE 7OTHER BORROWINGS
Senior Notes
The following is a summary of the senior unsecured notes issued by the Company (in thousands):
Facility TypeMaturity DateInterest Rate
Outstanding Principal at March 31, 2024
Outstanding Principal at December 31, 2023
2025 Senior Unsecured Notes(1)
11/15/20255.50 %$800,000 $800,000 
2029 Senior Unsecured Notes(2)
04/15/20295.50 %700,000 700,000 
2027 Senior Unsecured Notes(3)
06/15/20275.75 %500,000 500,000 
Total Senior Unsecured Notes$2,000,000 $2,000,000 
Weighted average interest rate5.56 %5.56 %
(1) Unamortized debt issuance costs and discounts are presented net against the 2025 Senior Notes reducing the amount reported on the condensed consolidated balance sheets by $3.6 million and $4.1 million as of March 31, 2024 and December 31, 2023, respectively.
(2) Unamortized debt issuance costs and discounts are presented net against the 2029 Senior Notes reducing the amount reported on the condensed consolidated balance sheets by $4.4 million and $4.6 million as of March 31, 2024 and December 31, 2023, respectively.
(3) Unamortized debt issuance costs and discounts are presented net against the 2027 Senior Notes reducing the amount reported on the condensed consolidated balance sheets by $2.8 million and $3.0 million as of March 31, 2024 and December 31, 2023, respectively.




2025 Senior Notes
On November 3, 2020, the Company's consolidated subsidiary, UWM, issued $800.0 million in aggregate principal amount of senior unsecured notes due November 15, 2025 (the “2025 Senior Notes”). The 2025 Senior Notes accrue interest at a rate of 5.500% per annum. Interest on the 2025 Senior Notes is due semi-annually on May 15 and November 15 of each year.
Beginning on November 15, 2022, the Company may, at its option, redeem the 2025 Senior Notes in whole or in part during the twelve-month period beginning on the following dates at the following redemption prices: November 15, 2022 at 102.750%; November 15, 2023 at 101.375%; or November 15, 2024 until maturity at 100%, of the principal amount of the 2025 Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest.
2029 Senior Notes
On April 7, 2021, the Company's consolidated subsidiary, UWM, issued $700.0 million in aggregate principal amount of senior unsecured notes due April 15, 2029 (the “2029 Senior Notes”). The 2029 Senior Notes accrue interest at a rate of 5.500% per annum. Interest on the 2029 Senior Notes is due semi-annually on April 15 and October 15 of each year.
On or after April 15, 2024, the Company may, at its option, redeem the 2029 Senior Notes in whole or in part during the twelve-month period beginning on the following dates at the following redemption prices: April 15, 2024 at 102.750%; April 15, 2025 at 101.375%; or April 15, 2026 until maturity at 100%, of the principal amount of the 2029 Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest. Prior to April 15, 2024, the Company may, at its option, redeem up to 40% of the aggregate principal amount of the 2029 Senior Notes originally issued at a redemption price of 105.500% of the principal amount of the 2029 Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest with the net proceeds of certain equity offerings. In addition, the Company may, at its option, redeem the 2029 Senior Notes prior to April 15, 2024 at a price equal to 100% of the principal amount redeemed plus a “make-whole” premium, plus accrued and unpaid interest.
2027 Senior Notes
On November 22, 2021, the Company's consolidated subsidiary, UWM, issued $500.0 million in aggregate principal amount of senior unsecured notes due June 15, 2027 (the "2027 Senior Notes"). The 2027 Senior Notes accrue interest at a rate of 5.750% per annum. Interest on the 2027 Senior Notes is due semi-annually on June 15 and December 15 of each year.

On or after June 15, 2024, the Company may, at its option, redeem the 2027 Senior Notes in whole or in part during the twelve-month period beginning on the following dates at the following redemption prices: June 15, 2024 at 102.875%; June 15, 2025 at 101.438%; or June 15, 2026 until maturity at 100.000%, of the principal amount of the 2027 Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest. Prior to June 15, 2024, the Company may, at its option, redeem up to 40% of the aggregate principal amount of the 2027 Senior Notes originally issued at a redemption price of 105.75% of the principal amount of the 2027 Senior Notes redeemed on the redemption date plus accrued and unpaid interest with the net proceeds of certain equity offerings. In addition, the Company may, at its option, redeem the 2027 Senior Notes prior to June 15, 2024 at a price equal to 100% of the principal amount redeemed plus a "make-whole" premium, plus accrued and unpaid interest.
The indentures governing the 2025, 2029 and 2027 Senior Notes contain operating covenants and restrictions, subject to a number of exceptions and qualifications. The Company was in compliance with the terms of the indentures as of March 31, 2024.
Revolving Credit Facility

On August 8, 2022, UWM entered into a Revolving Credit Agreement (the “Revolving Credit Agreement”) between UWM, as the borrower, and SFS Corp., as the lender. The Revolving Credit Agreement provides for, among other things, a $500.0 million unsecured revolving credit facility (the “Revolving Credit Facility”). The Revolving Credit Facility had an initial one-year term and automatically renews for successive one-year periods unless terminated by either party. Amounts borrowed under the Revolving Credit Facility may be borrowed, repaid and reborrowed from time to time, and accrue interest at the Applicable Prime Rate (as defined in the Revolving Credit Agreement). UWM may utilize the Revolving Credit Facility in connection with: (i) operational and investment activities, including but not limited to funding and/or advances related to (a) servicing rights, (b) ‘scratch and dent’ loans, (c) margin requirements, and (d) equity in loans held for sale; and (ii) general corporate purposes.



The Revolving Credit Agreement contains certain financial and operating covenants and restrictions, subject to a number of exceptions and qualifications, and the availability of funds under the Revolving Credit Facility is subject to our continued compliance with these covenants. The Company was in compliance with these covenants as of March 31, 2024. No amounts were outstanding under the Revolving Credit Facility as of March 31, 2024 or December 31, 2023.

NOTE 8 – COMMITMENTS AND CONTINGENCIES
Representations and Warranties Reserve
Loans sold to investors which the Company believes met investor and agency underwriting guidelines at the time of sale may be subject to repurchase by the Company in the event of specific default by the borrower or upon subsequent discovery that underwriting or documentation standards were not explicitly satisfied. The Company may, upon mutual agreement, indemnify the investor against future losses on such loans or be subject to other guaranty requirements and subject to loss. The Company initially records its exposure under such guarantees at estimated fair value upon the sale of the related loan, within "Accounts payable, accrued expenses, and other" as well as within "loan production income," and continues to evaluate its on-going exposures in subsequent periods. The reserve is estimated based on the Company’s assessment of its obligations, including expected losses, expected frequency, the overall potential remaining exposure, as well as an estimate for a market participant’s potential readiness to stand by to perform on such obligations. The Company repurchased $63.7 million and $58.6 million in UPB of loans during the three months ended March 31, 2024 and 2023, respectively, related to its representations and warranties obligations.
The activity of the representations and warranties reserve was as follows (in thousands):
 For the three months ended March 31,
 20242023
Balance, beginning of period$62,865 $60,495 
Additions10,463 7,527 
Losses realized, net(5,106)(10,060)
Balance, end of period$68,222 $57,962 
Commitments to Originate Loans
As of March 31, 2024, the Company had agreed to extend credit to potential borrowers for approximately $36.6 billion. These contracts represent off-balance sheet credit risk where the Company may be required to extend credit to these borrowers based on the prevailing interest rates and prices at the time of execution.

NOTE 9 - ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER

The following summarizes accounts payable, accrued expenses and other (in thousands):

March 31, 2024December 31, 2023
Servicing fees payable
$134,183 $99,694 
Accrued compensation and benefits83,101 82,745 
Representations and warranties reserve
68,222 62,865 
Accrued interest and bank fees53,831 24,985 
Deferred tax liability33,690 30,334 
Other accounts payable30,006 43,174 
Investor payables21,893 25,001 
Derivative settlements payable
16,131 64,777 
TRA liability15,674 15,494 
Other accrued expenses
13,887 12,199 
Public and Private Warrants
7,147 7,833 
Total accounts payable, accrued expenses and other
$477,765 $469,101 




NOTE 10VARIABLE INTEREST ENTITIES
Upon completion of the business combination transaction described in Note 1, the Company became the managing member of Holdings LLC with 100% of the management and voting power in Holdings LLC. In its capacity as managing member, the Company has the sole authority to make decisions on behalf of Holdings LLC and bind Holdings LLC to signed agreements. Further, Holdings LLC maintains separate capital accounts for its investors as a mechanism for tracking earnings and subsequent distribution rights.
Management concluded that the Company is Holdings LLC’s primary beneficiary. As the primary beneficiary, the Company consolidates the results and operations of Holdings LLC for financial reporting purposes under the variable interest entity (VIE) consolidation model.
The Company's relationship with Holdings LLC results in no recourse to the general credit of the Company. Holdings LLC and its consolidated subsidiaries represent the Company's sole investment. The Company shares in the income and losses of Holdings LLC in direct proportion to the Company's ownership interest. Further, the Company has no contractual requirement to provide financial support to Holdings LLC.
The Company's financial position, performance and cash flows effectively represent those of Holdings LLC and its consolidated subsidiaries as of and for the three months ended March 31, 2024 and 2023.
In 2021, UWM began selling some of the mortgage loans that it originates through private label securitization transactions. There have been no loan sales through UWM's private label securitization transactions since 2021. In executing these transactions, the Company sells mortgage loans to a securitization trust for cash and, in some cases, retained interests in the trust. The securitization entities are funded through the issuance of beneficial interests in the securitized assets. The beneficial interests take the form of trust certificates, some of which are sold to investors and some of which may be retained by the Company due to regulatory requirements. Retained beneficial interests consist of a 5% vertical interest in the assets of the securitization trusts, in order to comply with the risk retention requirements applicable to certain of the Company's securitization transactions. The Company has elected the fair value option for subsequently measuring the retained beneficial interests in the securitization trusts, and these investments are presented as “Investment securities at fair value, pledged” in the condensed consolidated balance sheet as of March 31, 2024 and December 31, 2023. Changes in the fair value of these retained beneficial interests are reported as part of "Other expense (income)" in the condensed consolidated statements of operations. The Company also retains the servicing rights on the securitized mortgage loans. The Company has accounted for these transactions as sales of financial assets.
The securitization trusts that purchase the mortgage loans from the Company and securitize those mortgage loans are VIEs, and the Company holds variable interests in certain of these entities. Because the Company does not have the obligation to absorb the VIEs’ losses or the right to receive benefits from the VIEs that could potentially be significant to the VIEs, the Company is not the primary beneficiary of these securitization trusts and is not required to consolidate these VIEs. The Company separately entered into sale and repurchase agreements for a portion of the retained beneficial interests in the securitization trusts, which have been accounted for as borrowings against investment securities. As of March 31, 2024, $106.2 million of the $108.3 million of investment securities at fair value have been pledged as collateral for these borrowings against investment securities. The outstanding principal balance of these borrowings was approximately $94.1 million with remaining maturities ranging from approximately one to two months as of March 31, 2024, and interest rates based on SOFR plus a spread. The Company's maximum exposure to loss in these non-consolidated VIEs is limited to the retained beneficial interests in the securitization trusts.

NOTE 11NON-CONTROLLING INTERESTS
The non-controlling interest balance represents the economic interest in Holdings LLC held by SFS Corp. The following table summarizes the ownership of units in Holdings LLC as of:
March 31, 2024December 31, 2023
Common UnitsOwnership PercentageCommon UnitsOwnership Percentage
UWM Holdings Corporation ownership of Class A Common Units 94,945,635 5.95 %93,654,269 5.87 %
SFS Corp. ownership of Class B Common Units1,502,069,787 94.05 %1,502,069,787 94.13 %
Balance at end of period1,597,015,422 100.00 %1,595,724,056 100.0 %
The non-controlling interest holder has the right to exchange Class B Common Units, together with a corresponding number of shares of our Class D common stock or Class C common stock (together referred to as “Stapled Interests”), for, at the Company's option, (i) shares of the Company's Class B common stock or Class A common stock or (ii) cash from a substantially concurrent public offering or private sale (based on the price of the Company's Class A common stock). As such,


future exchanges of Stapled Interests by the non-controlling interest holder will result in a change in ownership and reduce or increase the amount recorded as non-controlling interest and increase or decrease additional paid-in-capital or retained earnings when Holdings LLC has positive or negative net assets, respectively. As of March 31, 2024, SFS Corp. has not exchanged any Stapled Interests.
During the three months ended March 31, 2024, the Company issued 1,291,366 shares of Class A common stock, net of withholdings, which primarily related to the vesting of RSUs under its stock-based compensation plan. During the three months ended March 31, 2023, the Company issued 525,997 shares of Class A common stock which primarily related to the vesting of RSUs under its stock-based compensation plan. This resulted in an equivalent increase in the number of Class A Common Units of Holdings LLC held by the Company, and a re-measurement of the non-controlling interest in Holdings LLC due to the change in relative ownership of Holdings LLC with no change in control. The impact of the re-measurement of the non-controlling interest is reflected in the condensed consolidated statement of changes in equity.

NOTE 12 – REGULATORY NET WORTH REQUIREMENTS
Certain secondary market agencies and state regulators require UWM to maintain minimum net worth, capital, and liquidity requirements to remain in good standing with the agencies. Noncompliance with an agency’s requirements can result in such agency taking various remedial actions up to and including terminating UWM’s ability to sell loans to and service loans on behalf of the respective agency.
UWM is required to maintain certain minimum net worth, minimum liquidity, and minimum capital ratio requirements, including those established by USDA, HUD, Ginnie Mae, Freddie Mac and Fannie Mae. As of March 31, 2024, the most restrictive of these requirements require UWM to maintain a minimum net worth of $668.1 million, liquidity of $305.8 million, and a minimum capital ratio of 6%. At March 31, 2024, UWM was in compliance with these requirements.

NOTE 13 – FAIR VALUE MEASUREMENTS
Fair value is defined under U.S. GAAP as the price that would be received if an asset were sold or the price that would be paid to transfer a liability in an orderly transaction between willing market participants at the measurement date. Required disclosures include classification of fair value measurements within a three-level hierarchy (Level 1, Level 2 and Level 3). Classification of a fair value measurement within the hierarchy is dependent on the classification and significance of the inputs used to determine the fair value measurement. Observable inputs are those that are observed, implied from, or corroborated with externally available market information. Unobservable inputs represent the Company’s estimates of market participants’ assumptions.
Fair value measurements are classified in the following manner:
Level 1—Valuation is based on quoted prices in active markets for identical assets or liabilities at the measurement date.
Level 2—Valuation is based on either observable prices for identical assets or liabilities in inactive markets, observable prices for similar assets or liabilities, or other inputs that are derived directly from, or through correlation to, observable market data at the measurement date.
Level 3—Valuation is based on the Company’s or others’ models using significant unobservable assumptions at the measurement date that a market participant would use.
In determining fair value measurements, the Company uses observable inputs whenever possible. The level of a fair value measurement within the hierarchy is dependent on the lowest level of input that has a significant impact on the measurement as a whole. If quoted market prices are available at the measurement date or are available for similar instruments, such prices are used in the measurements. If observable market data is not available at the measurement date, judgement is required to measure fair value.
The following is a description of measurement techniques for items recorded at fair value on a recurring basis. There were no material items recorded at fair value on a nonrecurring basis as of March 31, 2024 or December 31, 2023.

Mortgage loans at fair value: The Company has elected the fair value option for mortgage loans. Accordingly, the fair values of mortgage loans are based on valuation models that use the market price for similar loans sold in the secondary market. As these prices are derived from market observable inputs, they are categorized as Level 2.

IRLCs: The Company's interest rate lock commitments are derivative instruments that are recorded at fair value based on valuation models that use the market price for similar loans sold in the secondary market. The IRLCs are then subject to an estimated loan funding probability, or “pullthrough rate.” Given the significant and unobservable nature of the pullthrough rate assumption, IRLC fair value measurements are classified as Level 3.



MSRs: The fair value of MSRs is determined using a valuation model that calculates the present value of estimated future net servicing cash flows. The model includes estimates of prepayment speeds, discount rate, cost to service, float earnings, contractual servicing fee income, and ancillary income and late fees, among others. These estimates are supported by market and economic data collected from various outside sources. These fair value measurements are classified as Level 3.

FLSCs: The Company enters into forward loan sales commitments to sell certain mortgage loans which are recorded at fair value based on valuation models. The Company’s expectation of the amount of its interest rate lock commitments that will ultimately close is a factor in determining the position. The valuation models utilize the fair value of related mortgage loans determined using observable market data, and therefore, the fair value measurements of these commitments are categorized as Level 2.

Investment securities at fair value, pledged: The Company occasionally sells mortgage loans that it originates through private label securitization transactions. In executing these securitizations, the Company sells mortgage loans to a securitization trust for cash and, in some cases, retained interests in the trust. The Company has elected the fair value option for subsequently measuring the retained beneficial interests in the securitization trusts. The fair value of these investment securities is primarily based on observable market data and therefore categorized as Level 2.

Public and Private Warrants: The fair value of Public Warrants is based on the price of trades of these securities in active markets and therefore categorized as Level 1. The fair value of the Private Warrants is based on observable market data and therefore categorized as Level 2.


Financial Instruments - Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following are the major categories of financial assets and liabilities measured at fair value on a recurring basis (in thousands):
 March 31, 2024
DescriptionLevel 1Level 2Level 3Total
Assets:
Mortgage loans at fair value$ $7,338,135 $ $7,338,135 
IRLCs  25,359 25,359 
FLSCs 8,691  8,691 
Investment securities at fair value, pledged 108,323  108,323 
Mortgage servicing rights  3,191,803 3,191,803 
Total assets$ $7,455,149 $3,217,162 $10,672,311 
Liabilities:
IRLCs$ $ $5,443 $5,443 
FLSCs 21,475  21,475 
Public and Private Warrants3,081 4,066  7,147 
Total liabilities$3,081 $25,541 $5,443 $34,065 
 December 31, 2023
DescriptionLevel 1Level 2Level 3Total
Assets:
Mortgage loans at fair value$ $5,449,884 $ $5,449,884 
IRLCs  29,623 29,623 
FLSCs 3,396  3,396 
Investment securities at fair value, pledged 110,352  110,352 
Mortgage servicing rights  4,026,136 4,026,136 
Total assets$ $5,563,632 $4,055,759 $9,619,391 
Liabilities:
IRLCs$ $ $2,933 $2,933 
FLSCs 37,848  37,848 
Public and Private warrants3,078 4,755  7,833 
Total liabilities$3,078 $42,603 $2,933 $48,614 
The following table presents quantitative information about the inputs used in recurring Level 3 fair value financial instruments and the fair value measurements for IRLCs:

Unobservable Input - IRLCsMarch 31, 2024December 31, 2023
Pullthrough rate (weighted avg.)
79 %76 %

Refer to Note 5 - Mortgage Servicing Rights for further information on the unobservable inputs used in measuring the fair value of the Company’s MSRs and for the roll-forward of MSRs for the three months ended March 31, 2024.
Level 3 Issuances and Transfers
The Company enters into IRLCs which are considered derivatives. If the contract converts to a loan, the implied value, which is solely based upon interest rate changes, is incorporated in the basis of the fair value of the loan. If the IRLC does not convert to a loan, the basis is reduced to zero as the contract has no continuing value. The Company does not track the basis of the individual IRLCs that convert to a loan, as that amount has no relevance to the presented condensed consolidated financial statements.
Other Financial Instruments
The following table presents the carrying amounts and estimated fair value of the Company's financial liabilities that are not measured at fair value on a recurring or nonrecurring basis (in thousands):


March 31, 2024December 31, 2023
Carrying AmountEstimated Fair ValueCarrying AmountEstimated Fair Value
2025 Senior Notes, due 11/15/25$796,441 $793,456 $795,894 $795,144 
2029 Senior Notes, due 4/15/29695,589 662,473 695,370 662,396 
2027 Senior Notes, due 6/15/27497,220 486,595 497,003 490,825 
$1,989,250 $1,942,524 $1,988,267 $1,948,365 
The fair value of the 2025, 2029 and 2027 Senior Notes was estimated using Level 2 inputs, including observable trading information from independent sources.
Due to their nature and respective terms (including the variable interest rates on warehouse and other lines of credit and borrowings against investment securities), the carrying value of cash and cash equivalents, receivables, payables, borrowings against investment securities and warehouse and other lines of credit approximate their fair values as of March 31, 2024 and December 31, 2023, respectively.

NOTE 14 – RELATED PARTY TRANSACTIONS
In the normal course of business, the Company engages in the following significant related party transactions:
The Company’s corporate campus is located in buildings and on land that are owned by entities controlled by the Company’s founder (who is a current member of the Board of Directors) and its CEO and leased by the Company from these entities. The Company also makes leasehold improvements to these properties for the benefit of the Company, for which the Company is responsible pursuant to the terms of the lease agreements;
Legal services are provided to the Company by a law firm in which the Company’s founder is a partner;
The Company leases aircraft owned by entities controlled by the Company’s CEO to facilitate travel of Company executives for business purposes. Our executive officers (other than the CEO) may, from time to time, be authorized by the CEO to use the aircraft for personal trips;
Employee lease agreements, pursuant to which the Company’s team members provide certain administrative services to entities controlled by the Company’s founder and its CEO in exchange for fees paid by these entities to the Company.
For the three months ended March 31, 2024 and 2023, the Company made net payments of approximately $5.2 million and $4.8 million, respectively, to various companies related through common ownership. Such related party payments were comprised of, (i) with respect to the three months ended March 31, 2024, approximately $4.9 million in rent and other occupancy related fees, $0.2 million in legal fees, and $0.1 million in other general and administrative expenses and (ii) with respect to the three months ended March 31, 2023, approximately $4.6 million in rent and other occupancy related fees, $0.1 million in legal fees and $0.1 million in other general and administrative expenses. Additionally, the Company made payments of $0.1 million and $0.2 million to unrelated third parties for pilots and ancillary services related to usage of the aircraft for the three months ended March 31, 2024 and 2023, respectively.
UWM entered into a $500.0 million unsecured Revolving Credit Facility with SFS Corp. as the lender during the third quarter of 2022. Refer to Note 7 - Other borrowings for further details.

NOTE 15 – INCOME TAXES
For the three months ended March 31, 2024 and 2023, the Company’s effective tax rate was 2.03% and 0.72% respectively. The variations between the Company’s effective tax rate and the U.S. statutory rate are primarily due to the portion (approximately 94%) of the Company’s earnings attributable to non-controlling interests.








NOTE 16STOCK-BASED COMPENSATION
The following is a summary of RSU activity for the three months ended March 31, 2024 and 2023:
For the three months ended March 31,
20242023
SharesWeighted Average Grant Date Fair ValueSharesWeighted Average Grant Date Fair Value
Unvested - beginning of period7,867,321 $5.89 4,005,801 $5.30 
Granted1,198,345 6.80 585,796 4.34 
Vested(1,426,590)6.33 (804,701)7.75 
Forfeited(138,135)5.61 (112,466)4.45 
Unvested - end of period7,500,941 $5.96 3,674,430 $4.64 
Stock-based compensation expense recognized for the three months ended March 31, 2024 and 2023 was $5.9 million and $2.5 million, respectively. As of March 31, 2024 and 2023, there was $39.6 million and $14.5 million of unrecognized compensation expense, respectively, related to unvested awards which is expected to be recognized over a weighted average period of 2.8 years and 2.2 years, respectively. During the three months ended March 31, 2024, the Company granted 1.2 million RSUs with a weighted average grant date fair value of $6.80, and vesting terms ranging from immediate to four years from the grant date.

NOTE 17 – EARNINGS PER SHARE
The Company has two classes of economic shares authorized - Class A and Class B common stock. The Company applies the two-class method for calculating earnings per share for Class A common stock and Class B common stock. In applying the two-class method, the Company allocates undistributed earnings equally on a per share basis between Class A and Class B common stock. According to the Company’s certificate of incorporation, the holders of the Class A and Class B common stock are entitled to participate in earnings equally on a per-share basis, as if all shares of common stock were of a single class, and in such dividends as may be declared by the Board of Directors. RSUs awarded as part of the Company’s stock compensation plan are included in weighted-average Class A shares outstanding in the calculation of basic earnings per share once the RSUs are vested and shares are issued.
Basic earnings (loss) per share of Class A common stock and Class B common stock is computed by dividing net income (loss) attributable to UWM Holdings Corporation by the weighted-average number of shares of Class A common stock and Class B common stock outstanding during the period. Diluted earnings (loss) per share of Class A common stock and Class B common stock is computed by dividing net income (loss) by the weighted-average number of shares of Class A common stock or Class B common stock, respectively, outstanding adjusted to give effect to potentially dilutive securities. See Note 11, Non-Controlling Interests for a description of the Stapled Interests. Refer to Note 1 - Organization, Basis of Presentation and Summary of Significant Accounting Policies - for additional information related to the Company's capital structure.
There was no Class B common stock outstanding as of March 31, 2024 or March 31, 2023.













The following table sets forth the calculation of basic and diluted earnings (loss) per share for the periods ended March 31, 2024 and 2023 (in thousands, except shares and per share amounts):
For the three months ended March 31,
20242023
Net income (loss)
$180,531 $(138,613)
Net income (loss) attributable to non-controlling interests
171,801 (126,672)
Net income (loss) attributable to UWMC
8,730 (11,941)
Numerator:
Net income (loss) attributable to Class A common shareholders
$8,730 $(11,941)
Net income (loss) attributable to Class A common shareholders - diluted
$142,860 $(11,941)
Denominator:
Weighted average shares of Class A common stock outstanding - basic94,365,991 92,920,794 
Weighted average shares of Class A common stock outstanding - diluted1,598,647,205 92,920,794 
Earnings (loss) per share of Class A common stock outstanding - basic
$0.09 $(0.13)
Earnings (loss) per share of Class A common stock outstanding - diluted
$0.09 $(0.13)
For purposes of calculating diluted earnings per share, it was assumed that the 1,502,069,787 shares of Class D common stock were exchanged for Class B common stock and converted to Class A common stock under the if-converted method, and it was determined that the conversion would be dilutive for the three months ended March 31, 2024 and anti-dilutive for the three months ended March 31, 2023. Under the if-converted method, all of the Company's net income (loss) for the applicable periods is attributable to Class A common shareholders. The net income (loss) of the Company under the if-converted method is calculated including an estimated income tax provision which is determined using a blended statutory effective tax rate.
The Public and Private Warrants were not in the money and the triggering events for the issuance of earn-out shares were not met during the three months ended March 31, 2024 and 2023. Therefore, these potentially dilutive securities were excluded from the computation of diluted earnings per share. Unvested RSUs have been considered in the calculations of diluted earnings per share for the three months ended March 31, 2024 and 2023 using the treasury stock method and the impact was either anti-dilutive or immaterial.

NOTE 18SUBSEQUENT EVENTS
Subsequent to March 31, 2024, the Board declared a cash dividend of $0.10 per share on the outstanding shares of Class A common stock. The dividend is payable on July 11, 2024 to stockholders of record at the close of business on June 20, 2023. Additionally, the Board approved a proportional distribution to SFS Corp. of $150.2 million which is payable on or about July 11, 2024 .


Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following management’s discussion and analysis of our financial condition and results of operations should be read in conjunction with, and is qualified in its entirety by reference to, our condensed consolidated financial statements and the related notes and other information included elsewhere in this Quarterly Report on Form 10-Q (the “Form 10-Q”). This discussion and analysis contains forward-looking statements that involve risks and uncertainties which could cause our actual results to differ materially from those anticipated in these forward-looking statements, including, but not limited to, risks and uncertainties discussed under the heading “Cautionary Note Regarding Forward-Looking Statements,” in this report and in Part I. Item 1A. “Risk Factors” included in our Form 10-K filed with the SEC on February 28, 2024. Unless otherwise indicated or the context otherwise requires, when used in this Form 10-Q, the term “UWM” means United Wholesale Mortgage, LLC and “the Company,” “we,” “our” and “us” refer to UWM Holdings Corporation and our subsidiaries.

Business Overview

We are the largest overall residential mortgage lender in the U.S., by closed loan volume, despite originating mortgage loans exclusively through the wholesale channel. For the last nine years, including the year ended December 31, 2023 we have also been the largest wholesale mortgage lender in the U.S. by closed loan volume. With a culture of continuous innovation of technology and enhanced client experience, we lead our market by building upon our proprietary and exclusively licensed technology platforms, superior service and focused partnership with the independent mortgage broker community. We originate primarily conforming and government loans across all 50 states and the District of Columbia.

Our mortgage origination business derives revenue from originating, processing and underwriting primarily government-sponsored enterprise ("GSE") conforming mortgage loans, along with FHA, USDA and VA mortgage loans, which are subsequently pooled and sold in the secondary market. For the three months ended March 31, 2024, 89% of the loans we originated were sold to Fannie Mae or Freddie Mac, or were transferred to Ginnie Mae pools in the secondary market, while the remainder were primarily jumbo loans that are underwritten to the same “Qualified Mortgage" underwriting standards and have a similar risk profile but are sold to third party investors primarily due to loan size. The mortgage origination process generally begins with a borrower entering into an IRLC with us that is arranged by an independent mortgage broker, pursuant to which we have committed to enter into a mortgage at specified interest rates and terms within a specified period of time with a borrower who has applied for a loan and met certain credit and underwriting criteria. As we have committed to providing a mortgage loan at a specific interest rate, we generally hedge that risk by selling forward-settling mortgage-backed securities and FLSCs in the To Be Announced ("TBA") market. When the mortgage loan is closed, we fund the loan with approximately 2-3%, on average, of our own funds and the remainder with funds drawn under one of our warehouse facilities (except when we opt to "self-warehouse" in which case we use our cash to fund the entire loan). At that point, the mortgage loan is legally owned by our warehouse facility lender and is subject to our repurchase right (other than when we self-warehouse). When we have identified a pool of mortgage loans to sell to the agencies, non-governmental entities, other investors, or through our private label securitization transactions, we repurchase loans not already owned by us from our warehouse lender and sell the pool of mortgage loans into the secondary market, but in most instances retain the mortgage servicing rights, or MSRs, associated with those loans. We currently retain the majority of the MSRs associated with our production, but we have, and intend to continue to opportunistically sell MSRs depending on market conditions. This nimble approach has provided us funding flexibility, and reduced legacy MSR asset exposure. When we sell MSRs, we typically sell them in the bulk MSR secondary market.

Our unique model, focusing exclusively on the wholesale channel, results in what we believe to be complete alignment with our clients and superior customer service arising from our investments in people and technology that has driven demand for our services from our clients.

New Accounting Pronouncements Not Yet Effective

See Note 1 – Organization, Basis of Presentation and Summary of Significant Accounting Policies to the condensed consolidated financial statements for details of recently issued accounting pronouncements and their expected impact on the Company's condensed consolidated financial statements.

Components of Revenue

We generate revenue from the following three components of the loan origination business: (i) loan production income, (ii) loan servicing income, and (iii) interest income.

Loan production income. Loan production income includes all components related to the origination and sale of mortgage loans, including:


•    primary gain, which represents the premium we may receive in excess of the loan principal amount adjusted for previous fair value adjustments, and certain fees charged by investors upon sale of loans into the secondary market. When the mortgage loan is sold into the secondary market, any difference between the proceeds received and the current fair value of the loan is recognized in current period earnings;
•    loan origination and certain other fees related to the origination of a loan, which generally represent flat, per-loan fee amounts;
•    provision for representation and warranty obligations, which represent the reserves initially established at the time of sale for our estimated liabilities associated with the potential repurchase or indemnity of purchasers of loans previously sold due to representation and warranty claims by investors. Included within these reserves are amounts for estimated liabilities for requirements to repay a portion of any premium received from investors on the sale of certain loans if such loans are repaid in their entirety within a specified time period after the sale of the loans;
•    the change in fair value of IRLCs, FLSCs and recorded loans on the balance sheet, due to changes in estimated fair value, driven primarily by interest rates but also influenced by other assumptions; and
capitalization of MSRs, representing the estimated fair value of newly originated MSRs when loans are sold and the associated servicing rights are retained.

Compensation earned by our clients, Independent Mortgage Brokers, is included in the cost of the loans we originate, and therefore netted within loan production income.

Loan servicing income. Loan servicing income consists of the contractual fees earned for servicing the loans and includes ancillary revenue such as late fees and modification incentives. Loan servicing income is recorded upon collection of payments from borrowers.

Interest income. Interest income represents interest earned on mortgage loans at fair value.

Components of Operating Expenses

Our operating expenses include salaries, commissions and benefits, direct loan production costs, marketing, travel and entertainment, depreciation and amortization, servicing costs, general and administrative (including professional services, occupancy and equipment), interest expense, and other expense (income) (primarily related to the increase or decrease, respectively, in the fair value of the liability for the Public and Private Warrants, the increase or decrease, respectively, in the Tax Receivable Agreement liability, and the decrease or increase, respectively, in the fair value of retained investment securities).

Three Months Ended March 31, 2024 and 2023 Summary

For the three months ended March 31, 2024, we originated $27.6 billion in loans, which was an increase of $5.3 billion, or 23.7%, from the $22.3 billion of originations during the three months ended March 31, 2023. We reported net income of $180.5 million during the three months ended March 31, 2024, which was an increase of $319.1 million, compared to a net loss of $138.6 million for the three months ended March 31, 2023. Adjusted EBITDA for the three months ended March 31, 2024 was $101.5 million as compared to $141.0 million for the three months ended March 31, 2023. Refer to the "Non-GAAP Financial Measures" section below for a detailed discussion of how we define and calculate Adjusted EBITDA.

Non-GAAP Financial Measures

To provide investors with information in addition to our results as determined by U.S. GAAP, we disclose Adjusted EBITDA as a non-GAAP measure, which our management believes provides useful information on our performance to investors. This measure is not a measurement of our financial performance under U.S. GAAP, and it may not be comparable to a similarly titled measure reported by other companies. Adjusted EBITDA has limitations as an analytical tool, and it should not be considered in isolation or as an alternative to revenue, net income or any other performance measures derived in accordance with U.S. GAAP or as an alternative to cash flows from operating activities as a measure of our liquidity.

We define Adjusted EBITDA as earnings 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 the Tax Receivable Agreement liability, and the change in fair value of retained investment securities.


We exclude the change in the 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. Non-funding debt includes the Company's senior notes, lines of credit, borrowings against investment securities, equipment notes payable, and finance leases.

We use Adjusted EBITDA to evaluate our operating performance, and it is one of the measures used by our management for planning and forecasting future periods. We believe the presentation of Adjusted EBITDA is relevant and useful for investors because it allows investors to view results in a manner similar to the method used by our management and may make it easier to compare our results with other companies that have different financing and capital structures.

The following table presents a reconciliation of net income (loss), the most directly comparable U.S. GAAP financial measure, to Adjusted EBITDA:
For the three months ended March 31,
($ in thousands)20242023
Net income (loss)
$180,531 $(138,613)
Interest expense on non-funding debt40,243 42,703 
Provision (benefit) for income taxes
3,733 (1,003)
Depreciation and amortization11,340 11,670 
Stock-based compensation expense5,876 2,482 
Change in fair value of MSRs due to valuation inputs or assumptions (1)
(141,059)222,915 
Deferred compensation, net(2)
1,063 1,081 
Change in fair value of Public and Private Warrants (3)
(686)2,098 
Change in Tax Receivable Agreement liability (4)
180 250 
Change in fair value of investment securities (5)
269 (2,589)
Adjusted EBITDA$101,490 $140,994 
 
(1)Reflects the change ((increase)/decrease) in fair value of MSRs due to changes in valuation inputs or assumptions, including discount rates and prepayment speed assumptions, primarily due to changes in market interest rates. Refer to Note 5 - Mortgage Servicing Rights to the condensed consolidated financial statements.
(2)Reflects management incentive bonuses under our long-term incentive plan that are accrued when earned, net of cash payments.
(3)Reflects the change (increase/(decrease)) in the fair value of the Public and Private Warrants.
(4)Reflects the change (increase/(decrease)) in the Tax Receivable Agreement liability. Refer to Note 1 - Organization, Basis of Presentation and Summary of Significant Accounting Policies to the condensed consolidated financial statements for additional information related to the Tax Receivable Agreement.
(5)Reflects the change (decrease/(increase)) in the fair value of the retained investment securities.



Results of Operations for the Three Months Ended March 31, 2024 and 2023

For the three months ended March 31,
($ in thousands)20242023
Revenue
Loan production income$298,954 $205,424 
Loan servicing income184,702 218,557 
Change in fair value of mortgage servicing rights(15,563)(337,287)
Interest income101,863 74,580 
Total revenue, net569,956 161,274 
Expenses
Salaries, commissions and benefits154,241 121,003 
Direct loan production costs31,436 16,483 
Marketing, travel, and entertainment19,111 17,210