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Thursday, September 23, 2021

Why UWM Holdings (UWMC) Holdings share price increased in after-hours trading

UWM Holdings (NYSE: UWMC) today announced via their Twitter account that UWMC has been included in the preliminary list of IPO additions for the Russell 1000 and Russell 3000 indexes.


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After the news was broken on Twitter, UWM holdings stock price increased in after-hours trading on Tuesday because passive index funds and ETFs based on those indexes are required to acquire those stocks.

UWM Holding’s share price reached $9.13 per share at the end of the trading session on 2nd march 2021 after an increase of 19.66% from the previous day.

UWM stands for the United Wholesale Mortgage and UWM is the number one wholesale lender in the united states for six consecutive years now. It holds 20% of the market share.

Recent Developments:

Recently on February 22, 2021, the company appointed Desmond P.Smith as the new chief growth officer. This position was recently created at the company to focus on innovative ways to advance and grow the mortgage broker channel. Mr. Smith has experience of three decades at different companies and he can shine a cascading spotlight on the difference between retail and wholesale lending.

Company’s latest financial results

The UWM last quarter ended 31 December 2020 results were also impressive.UWM reported net income of $1.37 billion for the fourth quarter and FY20 net income of $3.38 billion, an 821% and 715% increase over 4Q19 and FY19 respectively. The Board of Directors of UWMC declared its first regular quarterly dividend of $0.10 per share on the outstanding shares of Class A Common Stock. The dividend is payable on April 6, 2021, to stockholders of record at the close of business on March 10, 2021.

Key highlights from the 4Q 2020

  • The Company origination increased by 71% from 2019 and the company recorded originations of $54.7 billion in loan volume.
  • The total UWM prediction was 69% higher than last year and it was $182 billion for the fourth quarter.
  • The company gains a total margin of 305 bps in 4Q20 compared to 110 bps in 4Q19.
  • The net income of UWM for the fourth quarter was $1.37 billion as compared to $148.9 million for the fourth quarter of the last year.
  • For the fourth quarter, the company equity was increased to $2.37 billion as compared to $661.3 million for the fourth quarter of 2019.
  • The unpaid principal balance of mortgage servicing rights was$188.3 billion in Q420 compared to $72.6 billion for the fourth quarter of 2019.

First Quarter 2021 Outlook

The company increased its closed loan volume by 22.6% between $52 billion and $57 billionas compared to $42.4 billion in the first quarter of 2020.

For the first quarter of 2021, the company is looking for a total gain margin of 200-235 bps, which would be an increase of 110.5%-142.1% compared to 95 bps in the first quarter of 2020.

Technology Update:

The company launched a mobile app for its customer providing everything from Underwriting until the loan is Cleared to Close from anywhere, they have their phone. Including, document upload, e-sign capabilities, push notifications, and more.

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