• Net income: $65.7 million (+137% YoY)
• Total originations: $1.60 billion (+1%)
• Loans under administration: $22.77 billion (+1.1%)
• Net interest margin: 2.61% (vs. 2.55% in Q4 and 2.38% in Q1 2020)
• Provisions as % of gross loans: 0.28% (vs. 0.18% in Q4 and 0.70% in Q1 2020)
• Net write-offs as % of gross loans: 0.01% (vs. 0.01% in Q4 and 0.03% in Q1 2020)

 Notables from its call:

• “Our pandemic underwriting guidelines are still in place, but are currently under review,” said President and CEO Yousry Bissada. Those guidelines involved Home changing its risk appetite, including reducing the maximum loan-to-value criteria in certain geographic areas, while in some areas “we stopped underwriting altogether,” Bissada said. Home is also using extra due diligence when it comes to income verification for small business customers working in “location-based people gathering” industries. “We will determine as to when to relax these standards in stages to get back to our normal guidelines over time, commencing this year.“
• “…we continue to manage the fast rise of home values with prudent guidelines around maximum loan-to-value,” Bissada added.
• Asked what trigger Home would be looking for before easing those tightened underwriting criteria, Bissada said this: “To just answer the big picture first, it’s the right economic conditions, which all the signals are, things are getting better, vaccines are working, there are indications that employment is going to go up, so we’re seeing all the signals that it’s getting better…we wouldn’t go from pandemic restrictions to exactly where we were overnight. We’ll ease into it. So, we’d increase loan-to-values in certain areas slowly and then eventually get back to our normal levels.”
• “We’re reversing some of the earlier provisions we took against future credit losses as the expectations arising from our third-party economic models continue to improve,” said Bissada. “We continue to see our loan book as well-secured and well-provisioned. We continue to be conservative in our provisioning.”
• Asked about potential broker frustration over Home’s ongoing tighter guidelines, while other lenders have essentially returned to normal conditions, Bissada said, “We deal with a subsection [of brokers] that really understand Alt-A. I think they understand. They would, of course, like us to relax our underwriting more because they think there’s value to placing mortgages with Home, but they understand…”
• “The largest contribution [to Q1 net income performance] came from the relevant change in credit provisions,” said Chief Financial Officer Brad Kotush. “We took substantial credit provisions in the first quarter of 2020 at the onset of the pandemic.”
• “We expect our net interest margin to stay [in its current] range for the balance of 2021 based on our current expectations of the interest rate environment,” Kotush said.
• Home’s total single-family originations were up by 27%, which was “particularly gratifying,” Kotush said. “The fact that we grew our classic originations while operating under a more restrictive risk appetite gives us confidence in the opportunity for growth in the rest of this year as those restrictions are relaxed.”
• Asked about a forecast for Q2 performance, Bissada said this: “The market continues to be very active. Still, supply is a little low. Still, homes are going quickly…But in the core, mortgage is still very good. Nothing worries us. We’re just adding a lot more prudence in terms of, if we get an application of a home that sold 15% or more than listing, we have a team that looks at that a lot closer.”
• Asked about a potential net benefit to Home in the event of further borrowing restrictions on prime mortgages, Bissada replied, “Historically…when there have been prudential measures on A mortgages, it has helped the Alt-A. So, generally speaking, I think you’re right, but it also depends what it is…”