WAREHOUSE NOTES PAYABLE

6 Months Ended

Jun. 30, 2022

WAREHOUSE NOTES PAYABLE

Warehouse Notes Payable

NOTE 6—WAREHOUSE NOTES PAYABLE

As of June 30, 2022, to provide financing to borrowers under the Agencies’ programs, the Company has committed and uncommitted warehouse lines of credit in the amount of $3.9 billion with certain national banks and a $1.5 billion uncommitted facility with Fannie Mae (collectively, the “Agency Warehouse Facilities”). In support of these Agency Warehouse Facilities, the Company has pledged substantially all of its loans held for sale under the Company’s approved programs. The Company’s ability to originate mortgage loans for sale depends upon its ability to secure and maintain these types of financings on acceptable terms.

Additionally, as of June 30, 2022, the Company has arranged for warehouse lines of credit in the amount of $0.5 billion with certain national banks to assist in funding loans held for investment under the Interim Loan Program (“Interim Warehouse Facilities”). The Company has pledged substantially all of its loans held for investment against these Interim Warehouse Facilities. The Company’s ability to originate loans held for investment depends upon its ability to secure and maintain these types of financings on acceptable terms.  

The Company also has a warehouse line of credit in the amount of $30.0 million with a national bank to assist in funding the Company’s Committed investments in tax credit equity before transferring them to a tax credit fund (“Tax Credit Equity Warehouse Facility”).

The maximum amount and outstanding borrowings under Warehouse notes payable at June 30, 2022 follows.

	June 30, 2022
(dollars in thousands)	Committed		Uncommitted		Total Facility		Outstanding
Facility	Amount		Amount		Capacity		Balance		Interest rate(1)
Agency Warehouse Facility #1	$	425,000	$	—	$	425,000	$	105,286	Adjusted Term SOFR plus 1.30%
Agency Warehouse Facility #2		700,000		300,000		1,000,000		272,369	Adjusted Term SOFR plus 1.30%
Agency Warehouse Facility #3		600,000		265,000		865,000		287,275	Adjusted Term SOFR plus 1.35%
Agency Warehouse Facility #4		200,000		225,000		425,000		128,251	Adjusted Term SOFR plus 1.30%
Agency Warehouse Facility #5		—		1,000,000		1,000,000		68,804	Adjusted Term SOFR plus 1.45%
Agency Warehouse Facility #6		150,000		50,000		200,000		—	30-day LIBOR plus 1.30%
Total National Bank Agency Warehouse Facilities	$	2,075,000	$	1,840,000	$	3,915,000	$	861,985
Fannie Mae repurchase agreement, uncommitted line and open maturity		—		1,500,000		1,500,000		71,119
Total Agency Warehouse Facilities	$	2,075,000	$	3,340,000	$	5,415,000	$	933,104
Interim Warehouse Facility #1	$	135,000	$	—	$	135,000	$	—	Adjusted Term SOFR plus 1.80%
Interim Warehouse Facility #2		100,000		—		100,000		—	Adjusted Term SOFR plus 1.35% to 1.85%
Interim Warehouse Facility #3		200,000		—		200,000		163,468	30-day LIBOR plus 1.75% to 3.25%
Interim Warehouse Facility #4		19,810		—		19,810		19,810	30-day LIBOR plus 3.00%
Total National Bank Interim Warehouse Facilities	$	454,810	$	—	$	454,810	$	183,278
Tax Credit Equity Warehouse Facility	$	30,000	$	—	$	30,000	$	9,777	Adjusted Daily SOFR plus 3.00%
Debt issuance costs		—		—		—		(482)
Total warehouse facilities	$	2,559,810	$	3,340,000	$	5,899,810	$	1,125,677

(1) Interest rate presented does not include the effect of any applicable interest rate floors.

During 2022, the following amendments to the Warehouse Facilities were executed in the normal course of business to support the growth of the Company’s business.  

Agency Warehouse Facilities

During the second quarter of 2022, the Company executed an amendment to Agency Warehouse Facility #2 that extended the maturity date to April 13, 2023 and transitioned the interest rate from 30-day LIBOR to Adjusted Term SOFR plus 130 basis points. No other material modifications have been made to the agreement during 2022.

During the second quarter of 2022, the Company executed an amendment related to Agency Warehouse Facility #3 that extended the maturity date to May 15, 2023 and transitioned the interest rate from 30-day LIBOR to Adjusted Term SOFR plus 135 basis points with an Adjusted Term SOFR floor of 15 basis points. No other material modifications have been made to the agreement during 2022.

During the second quarter of 2022, the Company executed an amendment related to Agency Warehouse Facility #4 that extended the maturity date to June 22, 2023, increased the total borrowing capacity to $425 million from $350 million, and transitioned the interest rate from 30-day LIBOR to Adjusted Term SOFR plus 130 basis points. No other material modifications have been made to the agreement during 2022.

Interim Warehouse Facilities

During the second quarter of 2022, the Company executed an amendment related to Interim Warehouse Facility #1 that extended the maturity date to May 15, 2023 and transitioned the interest rate from 30-day LIBOR to Adjusted Term SOFR plus 180 basis points. No other material modifications have been made to the agreement during 2022.

During the first quarter of 2022, the Company executed an amendment related to Interim Warehouse Facility #2 that extended the maturity date to December 13, 2023 and transitioned the interest rate from 30-day LIBOR to Adjusted Term SOFR plus 135 to 185 basis points. No other material modifications have been made to the agreement during 2022.

Tax Credit Equity Warehouse Facility

During 2022, the Company executed amendments related to the Tax Credit Equity Warehouse Facility that extended the maturity date to August 30, 2022. Additionally, the amendments transitioned the interest rate from Daily LIBOR plus 300 basis points to Adjusted Daily SOFR plus 300 basis points, with a SOFR floor of 150 basis points. No other material modifications have been made to the agreement during 2022.

The warehouse notes payable are subject to various financial covenants, all of which the Company was in compliance with as of June 30, 2022. Interest on the Company’s warehouse notes payable is based on 30-day LIBOR, Adjusted Term SOFR, or Adjusted Daily SOFR. As a result of the expected transition from LIBOR, the Company has updated its debt agreements to include fallback language to govern the transition from 30-day LIBOR to an alternative reference rate.