![]() Jay Farner, CEO of Rocket Companies, said on a conference call with analysts that as rates rapidly increase, the company’s strategy has always been to protect margin and profitability. If Rocket executives, who no doubt noticed that the company’s stock had been trading at its lowest mark ever – were worried about a downturn, they didn’t show it. Margins declined to 2.80% in the fourth quarter, a sequential decline of 25 basis points and a 161 bps decline from a year prior. Rocket’s net income fell 69.5% year-over-year to $865 million, which was also a sequential decline of 37%. Business also slowed considerably in the fourth quarter, as interest rates ticked up and refis waned. Overall, Rocket reported a $6 billion in profit in 2021, a 35.4% decline from the prior year, even though mortgage originations actually rose to $351 billion, up nearly 10% from 2020. They quietly chose to compare 2021 financial results with 2019 results, a fairly normal year for the mortgage industry. It’s fitting then that Rocket executives in Thursday’s earnings report opted not to compare the full-year 2021 financials with that of the prior year, which it treated as something of a freak occurrence. Few thought those records would ever be broken. In 2020, Rocket’s parent company notched $9.4 billion in profit on the strength of $320 billion in mortgage originations. The Detroit-based company, with a ready-built infrastructure and top-notch brand recognition, was uniquely positioned to absorb historic mortgage demand as others struggled to get out of the gates. No mortgage lender in America capitalized on the pandemic-driven refi boom better than Rocket Mortgage. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |