Quarterly report pursuant to Section 13 or 15(d)

WAREHOUSE LINES OF CREDIT

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WAREHOUSE LINES OF CREDIT
 6 Months Ended
Jun. 30, 2023
Line of Credit Facility [Abstract]  
WAREHOUSE LINES OF CREDIT WAREHOUSE LINES OF CREDIT
Warehouse lines of credit consisted of the following at June 30, 2023 and December 31, 2022. Changes subsequent to June 30, 2023 have been described in the notes referenced with the below table.
Maturity as of June 30,
2023		 June 30, 2023 December 31, 2022
$345 million master repurchase facility agreement(1)
January 2024 $ 172,099  $ 47,565 
$150 million master repurchase facility agreement(2)
August 2023 87,082  10,848 
$300 million master repurchase facility agreement(3)
June 2024 201,382  189,512 
$200 million master repurchase facility agreement(4)
May 2024 103,055  110,605 
$200 million master repurchase facility agreement(5)
September 2023 96,035  16,131 
$300 million master repurchase facility agreement(6)
September 2023 165,315  81,353 
$100 million master repurchase facility agreement(7)
July 2023 5,371  56,237 
$50 million master repurchase facility agreement(8)
N/A 33,178  — 
$75 million master repurchase facility agreement(9)
March 2025 36,362  40,096 
$200 million master repurchase facility agreement(10)
N/A 154,979  162,454 
1,054,858  714,801 
Prepaid commitment fees (1,798) (1,650)
Net warehouse lines of credit $ 1,053,060  $ 713,151 
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(1)The variable interest rate is calculated using a base rate tied to SOFR.
(2)The variable interest rate is calculated using a base rate tied to SOFR, plus the applicable interest rate margin. This line of credit requires a minimum deposit of $750,000.
(3)The variable interest rate is calculated using a base rate tied to SOFR, plus the applicable interest rate margin. This facility requires a minimum deposit of $1.5 million.
(4)The variable interest rate is calculated using a base rate plus SOFR, with a floor of 0.375% plus the applicable interest rate margin.
(5)The variable interest rate is calculated using a base rate tied to SOFR with a floor of 0.40%, plus the applicable interest rate margin.
(6)The variable interest rate is calculated using a base rate tied to SOFR with a floor of 0.50%, plus the applicable interest rate margin.
(7)The variable interest rate is calculated using a base rate tied to SOFR with a floor of 0.25%, plus the applicable interest rate margin. Subsequent to June 30, 2023, this facility was paid in full and terminated.
(8)The variable interest rate is calculated using a base rate tied to SOFR, plus the applicable interest rate margin. This facility’s maturity date is 30 days from written notice by either the financial institution or the Company.
(9)The interest rate on this facility is 3.375%. This facility is used for GNMA delinquent buyouts. Each buyout represents a separate transaction that can remain on the facility for up to four years.
(10)This facility agreement is due on demand and the variable interest rate is calculated using a base rate tied to SOFR with a floor of 0.75%.
The weighted average interest rate for warehouse lines of credit was 7.02% and 3.31% at June 30, 2023 and December 31, 2022, respectively. All warehouse lines of credit are collateralized by underlying mortgages and related documents. Existing balances on warehouse lines are repaid through the sale proceeds from the collateralized loans held for sale. The Company had cash balances of $6.9 million and $50.7 million in its warehouse buy down accounts as offsets to certain lines of credit at June 30, 2023 and December 31, 2022, respectively.
The agreements governing the Company’s warehouse lines of credit contain covenants that include certain financial requirements, including maintenance of maximum adjusted leverage ratio, minimum net worth, minimum tangible net worth, minimum liquidity, positive quarterly income and limitations on additional indebtedness, dividends, sale of assets, and decline in the mortgage loan servicing portfolio’s fair value. At June 30, 2023 and December 31, 2022, the Company believes it was in compliance with all debt covenants.
The Company has an optional short-term financing agreement between FNMA and the lender described as “As Soon As Pooled”. The Company can elect to assign FNMA Mortgage Backed Security ("MBS") trades to FNMA in advance of settlement and enter into a financing transaction and revenue related to the assignment is deferred until the final pool settlement date. The Company determines utilization based on warehouse availability and cash needs. There was no outstanding balance as of June 30, 2023 and December 31, 2022.
NOTES PAYABLE
Revolving Notes:
The Company has an agreement for a revolving note from one of its warehouse banks, which it can draw upon as needed. The agreement currently expires in August 2027. Borrowings on the revolving note are collateralized by the Company’s GNMA MSRs. Monthly interest on the outstanding balance is calculated using a base rate tied to the SOFR rate plus the applicable margin, with a SOFR floor of 0.5%. The revolving note also has an unused facility fee on the average unused balance, which is also paid quarterly. The unused facility fee is waived if the average outstanding balance exceeds 50% of the available facility. The revolving note has a committed amount of $135.0 million and the agreement allows for the Company to increase the committed amount up to a maximum of $200.0 million. The Company has the option to convert the outstanding balance of the revolving note into a term note at its discretion. At June 30, 2023 and December 31, 2022, the Company had no balance and $20.0 million, respectively, in outstanding borrowings on this credit facility.
The Company has an agreement for a revolving note of up to $100.0 million from one of its warehouse banks, which it can draw upon as needed. The agreement currently expires in September 2023. Borrowings on the revolving note are collateralized by the Company’s FHLMC MSRs. Monthly interest on the outstanding balance is calculated using a base rate tied to the SOFR rate plus the applicable margin, with a floor of 0.50%. The revolving note also has an unused facility fee on the average unused balance, which is also paid quarterly. The unused facility fee is waived if the average outstanding balance exceeds 35% of the available combined warehouse and MSR facility. The lender has the option to convert the outstanding balance of the revolving note into a term note at its discretion. At June 30, 2023 and December 31, 2022, the Company had $30.0 million and no balance, respectively, in outstanding borrowings on this credit facility.
Term Note:
The Company has a term note agreement with one of its warehouse banks collateralized by the Company’s FNMA MSRs. The term note has a committed amount of $125.0 million and the agreement
allows for the Company to increase the committed amount up to a maximum of $175.0 million. The Company could draw on the committed amount through March 2022 and the note matures in March 2024. Interest on the principal is paid monthly and is based upon a margin plus the highest of the (i) Prime Rate, (ii) Federal Funds Rate plus 0.5%, or (iii) the Eurodollar Base Rate plus 1.0%. Principal payments of 5% of the outstanding balance as of March 31, 2022 are due quarterly beginning April 15, 2022, with the remaining principal balance due upon maturity. The term note also has an unused facility fee on the average unused balance, which is also paid quarterly. At June 30, 2023 and December 31, 2022, the Company had an outstanding balance of $93.8 million and $106.3 million, respectively, on this facility. 
The minimum calendar year payments of the Company’s term note as of June 30, 2023 are as follows:
2023 $ 12,500 
2024 81,250 
Total $ 93,750