Uwm Holdings Corporation · NYSE:UWMC
Uwm — Investor Presentation (November 2021)
28 slides from Uwm's investor presentation, Nov 15, 2021
Slide 1: Investor Presentation November 2021
Exhibit 99.1 INVESTOR PRESENTATION NOVEMBER 2021 Nov 2021 0
Slide 2: Disclaimer
DISCLAIMER This presentation contains certain forward-looking statements and information, which reflect management’s current beliefs and expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements include statements identified
Slide 3: Ingrained value system drives strong culture throughout UWM
INGRAINED VALUE SYSTEM DRIVES STRONG CULTURE THROUGHOUT UWM OUR CULTURE DRIVES A DURABLE COMPETITIVE ADVANTAGE UWM’s six pillars Continuous People Service Relationship driven Thumb pointers Fun and friendship improvement Our people are our Service is everyone's UWM is relationship driven, UWM points
Slide 4: Largest wholesale originator with a scaled and stable model
LARGEST WHOLESALE ORIGINATOR WITH A SCALED AND STABLE MODEL #1 #2 31% 18 days $226.0bn Wholesale lender in the U.S. Overall residential mortgage Wholesale market share as of LTM 3Q’21 Application to in LTM 3Q'21 production for 6 consecutive years lender in 2021 December 31, 2020 Clear-to-Close (“CTC
Slide 5: UWM has continuously innovated to deliver outstanding and sustainable growth
UWM HAS CONTINUOUSLY INNOVATED TO DELIVER OUTSTANDING AND SUSTAINABLE GROWTH Strategic investments and In addition to being the #1 Founded in 1986 as a family Post-2014, UWM started to invest decisions enabled UWM to become wholesale lender for 6 straight business – Mat Ishbia started in significant
Slide 6: UWM is uniquely positioned with ample resources to dominate the market
UWM IS UNIQUELY POSITIONED WITH AMPLE RESOURCES TO DOMINATE THE MARKET Best positioned on key issues… …with traditional barriers to growth removed • One of the largest mortgage lenders by volume in total origination, and believed to be the largest in Volume People Campus purchase volume as of Septem
Slide 7: The wholesale channel provides stability and efficiency and UWM is the market leader
THE WHOLESALE CHANNEL PROVIDES COMPANIES STABILITY AND EFFICIENCY AND UWM IS THE MARKET LEADER Phase I: Application and lead Phase II: Accepting the application, Phase III: Selling the loan in the generation with the customer as the followed by underwriting, approving, Mortgage Finance Process secon
Slide 8: UWM has delivered strong 3Q'2021 results despite margin pressure
UWM HAS DELIVERED STRONG 3Q’2021 RESULTS DESPITE MARGIN PRESSURE THAT UWM LARGELY IMPOSED ON THE MARKET Total Volume Product Mix Financial Performance • $63.0bn in origination volume: best • 117% increase in purchase production • UWM is a beacon of consistent quarterly volume number in company over
Slide 9: UWM's market leading approach drives consistent profitability
UWM’S MARKET LEADING APPROACH DRIVES CONSISTENT PROFITABILITY All figures LTM 3Q’21 1 Gain Margin (bps) Return on Equity (%) Cash and Cash Equiv. as a % of Equity 334 bps 108% 32% 75% 24% 169 bps 14% 39% 107 bps Source: Company filings 1. Net income divided by average equity Nov 2021 8
Slide 10: Focused and differentiated business model drives performance
FOCUSED AND DIFFERENTIATED BUSINESS MODEL DRIVES PERFORMANCE Servicing UPB / Origination Volume 1.2x 1.3x 1.9x 285 473 226 507 Origination Volume ($bn) 383 252 Profile Servicing UPB ($bn) 3Q'21 LTM¹ 2Q'21 LTM¹ 2Q'21 LTM¹ 7% 14% Wholesale 40% 2 Retail Loan by Channel 100% 60% Correspondent 79% 12% 33
Slide 11: Key credit highlights
KEY CREDIT HIGHLIGHTS 1 With a 31% market share of the wholesale channel, UWM is a market leader with the largest share of the Market position 1 increasingly vital market segment Scaled Pure-play B2B model, tech investments, partnerships and service levels minimize customer Business model 2 acquisit
Slide 12: The undisputed leader in a critical and growing segment of the mortgage market
THE UNDISPUTED LEADER IN A CRITICAL AND GROWING SEGMENT OF THE 1 MORTGAGE MARKET Wholesale Works for All Wholesale channel market share UWM share of wholesale channel 80% 33% Borrowers 31% • Interests are aligned between brokers 70% and borrowers since there is no pressure to offer a single platform
Slide 13: UWM continues to grow the pie in wholesale lending
UWM CONTINUES TO GROW THE PIE IN WHOLESALE LENDING THROUGH 2 EXTENSIVE WORK WITH KEY PARTNERS AND INDUSTRY GROUPS 2 UWM is Well Positioned to Capitalize on the Growing Wholesale Pie and Its Slice UWM is Leading the Wholesale Growth Efforts • UWM is solely focused on growing the wholesale channel and
Slide 14: UWM's unique pure-play B2B model scales and drives a sticky customer base
UWM’S UNIQUE PURE-PLAY B2B MODEL SCALES AND DRIVES A MASSIVE, STICKY 2 CUSTOMER BASE AND SIGNIFICANT PRICING POWER The UWM Advantage 1 Segmentation of Customer Base Customers 0.7 60000 59.4% Submitted at least 1 loan Submitted >6 loans % LO's >6 loans 53.8% 0.6 50000 0.5 • Strong brand recognition w
Slide 15: Time kills deals and no one is faster or more efficient
3 TIME KILLS DEALS AND ON AVERAGE NO ONE IS FASTER OR MORE EFFICIENT 1 2 UWM Advantage Avg. Loans per Team Member per Month Application to CTC Time · Brokers require certainty and speed when closing on deals, UWM’s relationship and tech- driven platform gives brokers both 2 19 days 9.9 · Deals often
Slide 16: Balanced B2B model that drives stable, growing returns
BALANCED B2B MODEL THAT DRIVES STABLE, GROWING RETURNS WITH MASSIVE 3 UPSIDE REGARDLESS OF MARKET CYCLE Purchase Origination When the “Tide Is In” Servicing Cash Flow Machine • Purchase origination is • In low-rate market • Growing part of the what differentiates • Consistent earnings environments,
Slide 17: Adaptable business model through market cycles
3 ADAPTABLE BUSINESS MODEL THROUGH MARKET CYCLES Low Interest Rate Environment High Interest Rate Environment ü Continue to excel in purchase originations through local ü Broker network positioned to meet customers’ needs relationships ü Margins generally higher due to industry capacity issuesü Abil
Slide 18: 2020 was a case study for the strength of UWM's model
3 2020 WAS A CASE STUDY FOR THE STRENGTH OF UWM’S MODEL Market Conditions and UWM’s Performance · 1Q’20 was not a “low rate high volume” time for the industry, but UWM still originated $42.4 billion of loans ($12.5 of purchase in the “non-purchase” season) 1 and generated net income of $20.3. millio
Slide 19: Demonstrated history of strong growth across key metrics
DEMONSTRATED HISTORY OF STRONG GROWTH ACROSS KEY METRIC— 4 GENERATING RETURN AND SCALE Continuous Performance · With an increasing presence in the purchase market, UWM has executed its strategy of a balanced loan origination business model to deliver consistent profitability, regardless of the rate
Slide 20: UWM outperforms the market and remains profitable when the tide is out
UWM HAS A MODEL WHICH OUTPERFORMS THE MARKET AND REMAINS 4 PROFITABLE WHEN “THE TIDE IS OUT” Overview UWM Performance vs. Market 3Q’2015 to 4Q’2015 Total Volume Growth • TILA/RESPA Integrated Disclosure Rule (“TRID”) was a CFPB regulation that dictated what and when information should be provided fr
Slide 21: Flexible, highly liquid capital structure
5 FLEXIBLE, HIGHLY LIQUID CAPITAL STRUCTURE Leverage Philosophy · We operate the business with a strong focus on maintaining appropriate and conservative levels of leverage and liquidity · Liquidity: We plan to operate with sizeable cash cushion which may fluctuate based on origination volume, margi
Slide 22: Financial data
FINANCIAL DATA Nov 2021 21
Slide 23: Historical financial summary ($mm)
HISTORICAL FINANCIAL SUMMARY ($MM) Origination Volume Total Revenue $4,939 $4,183 $226 $183 $1,278 $108 $593 $42 2018 2019 2020 LTM 3Q'21 2018 2019 2020 LTM 3Q'21 1 Pre-Tax Income Adjusted EBITDA $3,454 $2,569 $3,385 $2,719 $473 $415 $105 $91 2018 2019 2020 LTM 3Q'21 2018 2019 2020 LTM 3Q'21 1. Plea
Slide 24: Financial highlights: leverage and liquidity ($mm)
FINANCIAL HIGHLIGHTS: LEVERAGE AND LIQUIDITY ($MM) 1, 2 3 Non-Funding Debt / Adjusted EBITDA Total Equity 1.52x $2,994 $2,374 0.86x 0.62x 0.33x $661 $319 2018 2019 2020 LTM 3Q'21 2018 2019 2020 3Q'21 2 2 Total Debt / Adjusted EBITDA Non-Funding Debt / Total Equity 23.92x 0.61x 0.53x 0.50x 11.83x 0.4
Slide 25: Historical income statement ($mm)
HISTORICAL INCOME STATEMENT ($mm) 2018 2019 2020 LTM 3Q'21 Revenue Loan production income $334.2 $1,043.5 $4,551.4 $3,810.7 Loan servicing income 83.0 102.3 288.3 549.4 1 Change in fair value of MSRs – – – (448.8) (Loss) gain on sale of MSRs 91.1 (22.5) (62.3) 2.8 Interest income 85.0 155.1 161.2 26
Slide 26: Historical balance sheet (GAAP) ($mm)
HISTORICAL BALANCE SHEET (GAAP) ($mm) 2018 2019 2020 3Q'21 Assets Cash and cash equivalents $42.1 $133.3 $1,223.8 $950.9 Mortgage loans at fair value 2,517.8 5,446.3 7,916.5 11,736.6 Accounts receivable, net 75.4 163.5 253.6 340.0 Derivative assets 17.6 24.7 61.0 143.8 1 Mortgage servicing rights 36
Slide 27: Appendix
APPENDIX Nov 2021 26
Slide 28: Non-GAAP reconciliation ($ in thousands)
NON-GAAP RECONCILIATION ($ in thousands) 2018 2019 2020 LTM 3Q'21 Adjusted EBITDA Net income $91,316 $415,057 $3,382,510 $2,700,365 Interest expense on non-funding debt 8,211 16,781 28,062 72,591 Provision for income taxes 57 - 2,450 18,781 Depreciation and amortization 5,456 9,405 16,820 33,425 Sto