PennyMac Financial Services, Inc. Reports Fourth Quarter and Full-Year 2024 Results

Business Wire
31 Jan

WESTLAKE VILLAGE, Calif., January 30, 2025--(BUSINESS WIRE)--PennyMac Financial Services, Inc. (NYSE: PFSI) today reported net income of $104.5 million for the fourth quarter of 2024, or $1.95 per share on a diluted basis, on revenue of $470.1 million. Book value per share increased to $74.54 from $72.95 at September 30, 2024.

PFSI’s Board of Directors declared a fourth quarter cash dividend of $0.30 per share, payable on February 23, 2025, to common stockholders of record as of February 13, 2025.

In the fourth quarter, management reassessed its segment definitions. Prior period amounts have been recast to conform those periods' presentation to current period presentation. Non-segment activities are included under "Corporate and other" and include amounts attributable to corporate activities not directly attributable to the production and servicing segments as well as management fees earned from PennyMac Mortgage Investment Trust (NYSE: PMT).

Fourth Quarter 2024 Highlights

  • Pretax income was $129.4 million, up from pretax income of $93.9 million in the prior quarter and pretax loss of $54.2 million in the fourth quarter of 2023
  • Production segment pretax income was $78.0 million, down from $129.4 million in the prior quarter and up from $44.2 million in the fourth quarter of 2023
    • Total loan acquisitions and originations, including those fulfilled for PMT, were $35.7 billion in unpaid principal balance (UPB), up 13 percent from the prior quarter and 34 percent from the fourth quarter of 2023
    • Broker direct interest rate lock commitments (IRLCs) were $4.5 billion in UPB, down 17 percent from the prior quarter and up 60 percent from the fourth quarter of 2023
    • Consumer direct IRLCs were $3.7 billion in UPB, down 30 percent from the prior quarter and up 129 percent from the fourth quarter of 2023
    • Government correspondent IRLCs totaled $11.1 billion in UPB, down 11 percent from the prior quarter and essentially unchanged from the fourth quarter of 2023
    • Conventional correspondent IRLCs for PFSI’s account totaled $13.8 billion in UPB, up 68 percent from the prior quarter and 38 percent from the fourth quarter of 2023
    • Correspondent acquisitions of conventional conforming and jumbo loans fulfilled for PennyMac Mortgage Investment Trust (NYSE: PMT) were $3.5 billion in UPB, down 41 percent from the prior quarter and up 41 percent from the fourth quarter of 2023
      • PMT retained 19 percent of total conventional correspondent loans in the fourth quarter, down from 42 percent in the prior quarter
  • Servicing segment pretax income was $87.3 million, up from $3.3 million in the prior quarter and $76.6 million in the fourth quarter of 2023
    • Pretax income excluding valuation-related changes was $168.3 million, essentially unchanged from the prior quarter as higher loan servicing fees, lower realization of mortgage servicing rights (MSR) cash flows and lower operating expenses were offset by lower earnings on custodial balances due to lower short-term interest rates
    • Valuation-related changes included:
      • $540.4 million in MSR fair value gains more than offset by $608.1 million in hedging losses
        • Net impact on pretax income related to these items was $(67.7) million, or $(0.93) in earnings per share
      • $13.3 million provision for losses on active loans
    • Servicing portfolio grew to $665.8 billion in UPB, up 3 percent from September 30, 2024 and 10 percent from December 31, 2023 driven by production volumes which more than offset prepayment activity
  • Pretax loss from Corporate and Other was $35.9 million, compared to $38.8 million in the prior quarter and $175.0 million in the fourth quarter of 2023
    • The fourth quarter of 2023 included a non-recurring expense accrual of $158.4 million as a result of the long-standing arbitration related to the development of our proprietary servicing software

Full-Year 2024 Highlights

  • Net income of $311.4 million, up from $144.7 million in 2023; excluding the non-recurring expense accrual, net income in 2023 would have been $260.5 million
  • Pretax income of $401.0 million, up from $183.6 million in 2023; excluding the non-recurring expense accrual, pretax income in 2023 would have been $342.0 million
  • Total net revenue of $1.6 billion, up from $1.4 billion in 2023
  • Total loan production of $116.3 billion in UPB, an increase of 17 percent from 2023
  • Servicing portfolio UPB of $665.8 billion at year end, up 10 percent from December 31, 2023
  • Issued $650 million of 6-year unsecured senior notes due in November 2030
  • Increased quarterly cash dividend to $0.30 per share, a 50% increase from $0.20 previously

"PennyMac Financial delivered strong fourth quarter results, with a 16 percent1 annualized operating return on equity driven by continued strength in our servicing business and a solid contribution from our production segment despite higher mortgage rates," said Chairman and CEO David Spector. "In total, we acquired or originated $36 billion in unpaid principal balance of loans, which drove continued growth in our servicing portfolio to $666 billion in unpaid principal balance at year end."

Mr. Spector continued, "Our full year results demonstrate both the ability of our balanced business model to generate operating returns on equity in the mid-teens in periods of higher rates, and also a substantial improvement in operating leverage from the previous year. Looking to 2025 and beyond, I continue to believe PennyMac Financial is best-positioned in the mortgage industry for continued growth and execution regardless of the path of interest rates. Our best-in-class management team has built a platform with significant scale and remains committed to unlocking additional efficiencies through continued investments in workflow and technology. It is for all of these reasons that I am confident in our ability to continue driving strong financial performance in this higher rate environment, bolstered by increases in the origination market in periods when mortgage rates decline."

1

See page 18 for a reconciliation of non-GAAP items

The following table presents the contributions of PennyMac Financial’s segments to pretax income:

Quarter ended December 31, 2024
Production Servicing Reportable
segment total
Corporate
and Other
Total
(in thousands)
Revenue:
Net gains on loans held for sale at fair value

$

195,070

$

26,974

$

222,044

$

-

$

222,044

Loan origination fees

57,824

-

57,824

-

57,824

Fulfillment fees from PMT

6,356

-

6,356

-

6,356

Net loan servicing fees

-

189,267

189,267

-

189,267

Management fees

-

-

-

7,149

7,149

Net interest income (expense):
Interest income

93,766

116,679

210,445

414

210,859

Interest expense

91,982

136,129

228,111

-

228,111

1,784

(19,450

)

(17,666

)

414

(17,252

)

Other

89

735

824

3,898

4,722

Total net revenue

261,123

197,526

458,649

11,461

470,110

Expenses
Compensation

91,754

49,958

141,712

31,378

173,090

Loan origination

48,046

-

48,046

-

48,046

Technology

25,743

10,108

35,851

4,980

40,831

Servicing

-

38,088

38,088

-

38,088

Professional services

3,869

2,386

6,255

3,732

9,987

Occupancy and equipment

3,951

2,661

6,612

1,561

8,173

Marketing and advertising

6,919

202

7,121

644

7,765

Legal settlements

-

2

2

(108

)

(106

)

Other

2,831

6,823

9,654

5,218

14,872

Total expenses

183,113

110,228

293,341

47,405

340,746

Income (loss) before provision for income taxes

$

78,010

$

87,298

$

165,308

$

(35,944

)

$

129,364

Production Segment

The Production segment includes the correspondent acquisition of newly originated government-insured and certain conventional conforming loans for PennyMac Financial’s own account, fulfillment services on behalf of PMT and direct lending through the consumer direct and broker direct channels, including the underwriting and acquisition of loans from correspondent sellers on a non-delegated basis.

PennyMac Financial’s loan production activity for the quarter totaled $35.7 billion in UPB, $32.2 billion of which was for its own account, and $3.5 billion of which was fee-based fulfillment activity for PMT. Correspondent locks for PFSI and direct lending IRLCs totaled $33.0 billion in UPB, up 6 percent from the prior quarter and 29 percent from the fourth quarter of 2023.

Production segment pretax income was $78.0 million, down from $129.4 million in the prior quarter and up from $44.2 million in the fourth quarter of 2023. Production segment revenue totaled $261.1 million, down 11 percent from the prior quarter and up 49 percent from the fourth quarter of 2023. The decrease from the prior quarter was due to higher mortgage interest rates, which resulted in lower lock volumes in the direct lending channels. The increase from the fourth quarter of 2023 was driven primarily by higher volumes across all channels.

The components of net gains on loans held for sale are detailed in the following table:

Quarter ended
December 31,
2024
September 30,
2024
December 31,
2023
(in thousands)
Receipt of MSRs

$

748,121

$

578,982

$

549,965

Gains on sale of loans and mortgage servicing rights recapture payable to PennyMac Mortgage Investment Trust

2,387

2,506

(290

)

Provision for representations and warranties, net

(1,633

)

(589

)

(1,002

)

Cash loss, including cash hedging results

(373,307

)

(382,148

)

(606,160

)

Fair value changes of pipeline, inventory and hedges

(153,524

)

58,068

206,252

Net gains on mortgage loans held for sale

$

222,044

$

256,819

$

148,765

Net gains on mortgage loans held for sale by segment:
Production

$

195,070

$

235,902

$

124,267

Servicing

$

26,974

$

20,917

$

24,498

PennyMac Financial performs fulfillment services for certain conventional conforming and jumbo loans acquired by PMT from non-affiliates in its correspondent production business. These services include, but are not limited to, marketing, relationship management, correspondent seller approval and monitoring, loan file review, underwriting, pricing, hedging and activities related to the subsequent sale and securitization of loans in the secondary mortgage markets for PMT.

Fees earned from the fulfillment of correspondent loans on behalf of PMT totaled $6.4 million in the fourth quarter, down 45 percent from the prior quarter and up 29 percent from the fourth quarter of 2023. The quarter-over-quarter decrease was driven by lower conventional acquisition volumes for PMT’s account, as PMT retained a smaller percentage of total conventional correspondent production in the fourth quarter versus the third quarter. In the first quarter of 2025, we expect PMT to retain all jumbo production and 15 to 25 percent of total conventional conforming correspondent production, compared to 19 percent in the fourth quarter.

Under a renewed mortgage banking services agreement with PMT, effective July 1, 2025, correspondent production volumes will initially be acquired by PFSI. PMT will retain the right to purchase up to 100 percent of non-government correspondent loan production.

Net interest income in the fourth quarter totaled $1.8 million, compared to net interest expense of $2.1 million in the prior quarter. Interest income totaled $93.8 million, up from $79.4 million in the prior quarter, and interest expense totaled $92.0 million, up from $81.5 million in the prior quarter, both due to higher average balances of loans held for sale due to the increase in funded volumes.

Production segment expenses were $183.1 million, up 11 percent from the prior quarter and 40 percent from the fourth quarter of 2023. Production expenses increased from the prior quarter primarily due to higher funded volumes and increased capacity in the direct lending channels.

Servicing Segment

The Servicing segment includes income from owned MSRs and subservicing. The total servicing portfolio grew to $665.8 billion in UPB at December 31, 2024, an increase of 3 percent from September 30, 2024 and 10 percent from December 31, 2023. PennyMac Financial’s owned MSR portfolio grew to $434.2 billion in UPB, an increase of 4 percent from September 30, 2024 and 16 percent from December 31, 2023. PennyMac Financial subservices $230.8 billion in UPB for PMT and subservices on an interim basis $807 million in UPB of previously owned loans that have been repurchased by the United States Veterans Affairs (VA) pursuant to the Veterans Affairs Servicing Purchase (VASP) program.

The table below details PennyMac Financial’s servicing portfolio UPB:

December 31,
2024
September 30,
2024
December 31,
2023
(in thousands)
Prime servicing:
Owned
Mortgage servicing rights and liabilities
Originated

$

410,393,342

$

393,947,146

$

352,790,614

Purchased

15,681,406

16,104,333

17,478,397

426,074,748

410,051,479

370,269,011

Loans held for sale

8,128,914

6,366,787

4,294,689

434,203,662

416,418,266

374,563,700

Subserviced for PMT

230,745,995

231,369,983

232,643,144

Subserviced for U.S. Department of Veterans Affairs

806,584

257,696

-

Total prime servicing

665,756,241

648,045,945

607,206,844

Special servicing - subserviced for PMT

7,586

8,340

9,925

Total loans serviced

$

665,763,827

$

648,054,285

$

607,216,769

Servicing segment pretax income was $87.3 million, up from pretax income of $3.3 million in the prior quarter and $76.6 million in the fourth quarter of 2023. Servicing segment net revenues totaled $197.5 million, up from $105.9 million in the prior quarter and $175.9 million in the fourth quarter of 2023.

Revenue from net loan servicing fees totaled $189.3 million, up from $75.8 million in the prior quarter and $162.3 million in the fourth quarter of 2023. The increase from the prior quarter was primarily driven by a decrease in net valuation-related losses. Net loan servicing fee revenues included $472.6 million in loan servicing fees, which was up from the prior quarter due to growth in the owned portfolio, reduced by $215.6 million from the realization of MSR cash flows. Net valuation-related losses totaled $67.7 million and included MSR fair value gains of $540.4 million driven by the increase in market interest rates, and hedging losses of $608.1 million.

The following table presents a breakdown of net loan servicing fees:

Quarter ended

December 31,
2024
September 30,
2024
December 31,
2023
(in thousands)
Loan servicing fees

$

472,563

$

462,037

$

402,484

Changes in fair value of MSRs and MSLs resulting from:
Realization of cash flows

(215,590

)

(225,836

)

(164,255

)

Change in fair value inputs

540,406

(402,422

)

(370,705

)

Hedging (losses) gains

(608,112

)

242,051

294,787

Net change in fair value of MSRs and MSLs

(283,296

)

(386,207

)

(240,173

)

Net loan servicing fees

$

189,267

$

75,830

$

162,311

Servicing segment revenue included $27.0 million in net gains on loans held for sale related to early buyout loans (EBOs), up from $20.9 million in the prior quarter and $24.5 million in the fourth quarter of 2023. These EBOs are previously delinquent loans that were brought back to performing status through PennyMac Financial’s successful servicing efforts.

Net interest expense totaled $19.5 million, versus net interest income of $9.5 million in the prior quarter and net interest expense of $13.4 million in the fourth quarter of 2023. Interest income was $116.7 million, down from $145.6 million in the prior quarter due to decreased placement fees on custodial balances due to lower short-term rates. Interest expense was $136.1 million, essentially unchanged from the prior quarter as a higher average balance of financing for MSR assets was offset by lower financing rates on floating rate debt.

Servicing segment expenses totaled $110.2 million, up from $102.6 million in the prior quarter primarily due to increased provisions for losses on active loans.

Corporate and Other

Corporate and Other items include amounts attributable to corporate activities not directly attributable to the production and servicing segments as well as management fees earned from PMT. PennyMac Financial manages PMT for which it earns base management fees and may earn incentive compensation.

Pretax loss for Corporate and Other was $35.9 million, compared to $38.8 million in the prior quarter and $175.0 million in the fourth quarter of 2023.

Revenues from Corporate and Other were $11.5 million, and consisted of $7.1 million in management fees, $3.9 million in other revenue, and $0.4 million of net interest income. No performance incentive fees were earned in the fourth quarter.

Expenses were $47.4 million, compared to $49.8 million in the prior quarter and $186.4 million in the fourth quarter of 2023, which included the aforementioned non-recurring expense accrual.

Net assets under management were $1.9 billion as of December 31, 2024, essentially unchanged from September 30, 2024 and December 31, 2023.

The following table presents a breakdown of management fees:

Quarter ended
December 31,
2024
September 30,
2024
December 31,
2023
(in thousands)
Management fees:
Base

$

7,149

$

7,153

$

7,252

Performance incentive

-

-

-

Total management fees

$

7,149

$

7,153

$

7,252

Net assets of PennyMac Mortgage Investment Trust

$

1,938,500

$

1,936,787

$

1,957,090

Consolidated Expenses

Total expenses were $340.7 million, up from $317.9 million in the prior quarter primarily due to increased production and servicing segment expenses as previously discussed.

Taxes

PFSI recorded a provision for tax expense of $24.9 million, resulting in an effective tax rate of 19.2 percent. The reduction in the effective tax rate from the prior quarter was primarily due to a decline in the provision rate from 26.85 percent to 26.70 percent and the resulting repricing of expected taxes on deferred income.

Management’s slide presentation and accompanying material will be available in the Investor Relations section of the Company’s website at pfsi.pennymac.com after the market closes on Thursday, January 30, 2025. Management will also host a conference call and live audio webcast at 5:00 p.m. Eastern Time to review the Company’s financial results. The webcast can be accessed at pfsi.pennymac.com, and a replay will be available shortly after its conclusion.

About PennyMac Financial Services, Inc.

PennyMac Financial Services, Inc. is a specialty financial services firm focused on the production and servicing of U.S. mortgage loans and the management of investments related to the U.S. mortgage market. Founded in 2008, the company is recognized as a leader in the U.S. residential mortgage industry and employs approximately 4,100 people across the country. In 2024, PennyMac Financial’s production of newly originated loans totaled $116 billion in unpaid principal balance, making it a top lender in the nation. As of December 31, 2024, PennyMac Financial serviced loans totaling $666 billion in unpaid principal balance, making it a top mortgage servicer in the nation. Additional information about PennyMac Financial Services, Inc. is available at pfsi.pennymac.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding management’s beliefs, estimates, projections, and assumptions with respect to, among other things, our financial results, future operations, business plans and investment strategies, as well as industry and market conditions, all of which are subject to change. Words like "believe," "expect," "anticipate," "promise," "project," "plan," and other expressions or words of similar meanings, as well as future or conditional verbs such as "will," "would," "should," "could," or "may" are generally intended to identify forward-looking statements. Actual results and operations for any future period may vary materially from those projected herein and from past results discussed herein. Factors which could cause actual results to differ materially from historical results or those anticipated include, but are not limited to: interest rate changes; changes in real estate values, housing prices and housing sales; changes in macroeconomic, consumer and real estate market conditions; the continually changing federal, state and local laws and regulations applicable to the highly regulated industry in which we operate; lawsuits or governmental actions that may result from any noncompliance with the laws and regulations applicable to our business; the mortgage lending and servicing-related regulations promulgated by the Consumer Financial Protection Bureau and its enforcement of these regulations; the licensing and operational requirements of states and other jurisdictions applicable to our business, to which our bank competitors are not subject; foreclosure delays and changes in foreclosure practices; difficulties inherent in adjusting the size of our operations to reflect changes in business levels; purchase opportunities for mortgage servicing rights; our substantial amount of indebtedness; increases in loan delinquencies, defaults and forbearances; our dependence on U.S. government-sponsored entities and changes in their current roles or their guarantees or guidelines; our reliance on PennyMac Mortgage Investment Trust (NYSE: PMT) as a significant contributor to our mortgage banking business; maintaining sufficient capital and liquidity and compliance with financial covenants; our obligation to indemnify third-party purchasers or repurchase loans if loans that we originate, acquire, service or assist in the fulfillment of fail to meet certain criteria; our obligation to indemnify PMT if our services fail to meet certain criteria or characteristics or under other circumstances; investment management and incentive fees; conflicts of interest in allocating our services and investment opportunities among us and our advised entity; our ability to mitigate cybersecurity risks, cyber incidents and technology disruptions; the development of artificial intelligence; the effect of public opinion on our reputation; our exposure to risks of loss and disruptions in operations resulting from severe weather events, man-made or other natural conditions, including climate change and pandemics; our ability to effectively identify, manage and hedge our credit, interest rate, prepayment, liquidity and climate risks; our initiation or expansion of new business activities or strategies; our ability to detect misconduct and fraud; our ability to pay dividends to our stockholders; and our organizational structure and certain requirements in our charter documents. You should not place undue reliance on any forward- looking statement and should consider all of the uncertainties and risks described above, as well as those more fully discussed in reports and other documents filed by the Company with the Securities and Exchange Commission from time to time. The Company undertakes no obligation to publicly update or revise any forward-looking statements or any other information contained herein, and the statements made in this press release are current as of the date of this release only.

The press release contains financial information calculated other than in accordance with U.S. generally accepted accounting principles ("GAAP"), such as pretax income excluding valuation-related items and operating net income that provide a meaningful perspective on the Company’s business results since the Company utilizes this information to evaluate and manage the business. Non-GAAP disclosures have limitations as an analytical tool and should not be viewed as a substitute for financial information determined in accordance with GAAP.

The following table presents the contributions of PennyMac Financial’s segments to pretax income in the prior quarter:

Quarter ended September 30, 2024
Production Servicing Reportable
segment total
Corporate
and other
Total
(in thousands)
Revenue:
Net gains on loans held for sale at fair value

$

235,902

$

20,917

$

256,819

$

-

$

256,819

Loan origination fees

49,430

-

49,430

-

49,430

Fulfillment fees from PMT

11,492

-

11,492

-

11,492

Net loan servicing fees

-

75,830

75,830

-

75,830

Management fees

-

-

-

7,153

7,153

Net interest (expense) income:
Interest income

79,427

145,567

224,994

476

225,470

Interest expense

81,496

136,101

217,597

-

217,597

(2,069

)

9,466

7,397

476

7,873

Other

172

(269

)

(97

)

3,334

3,237

Total net revenue

294,927

105,944

400,871

10,963

411,834

Expenses
Compensation

82,991

52,553

135,544

35,772

171,316

Loan origination

45,208

-

45,208

-

45,208

Technology

24,115

9,866

33,981

3,078

37,059

Servicing

-

28,885

28,885

-

28,885

Professional services

2,853

1,575

4,428

4,911

9,339

Occupancy and equipment

3,840

2,823

6,663

1,493

8,156

Marketing and advertising

4,830

28

4,858

230

5,088

Legal settlements

-

-

-

108

108

Other

1,716

6,866

8,582

4,168

12,750

Total expenses

165,553

102,596

268,149

49,760

317,909

Income (loss) before provision for income taxes

$

129,374

$

3,348

$

132,722

$

(38,797

)

$

93,925

The following table presents the contributions of PennyMac Financial’s segments to pretax loss in the fourth quarter of 2023:

...
Quarter ended December 31, 2023
Production Servicing Reportable
segment total
Corporate
and other
Total
 
Revenue:
Net gains on loans held for sale at fair value

$

124,267

$

24,498

$

148,765

$

-

$

148,765

Loan origination fees

38,059

-

38,059

-

38,059

Fulfillment fees from PMT

4,931

-

4,931

-

4,931

Net loan servicing fees

-

162,311

162,311

-

162,311

Management fees

-

-

-

7,252

7,252

Net interest income (expense):
Interest income

72,553

91,885

164,438

504

164,942

Interest expense

65,199

105,302

170,501

-

170,501

7,354

(13,417

)

(6,063

)

504

(5,559

)

Other

73

2,555

2,628

3,552

6,180

Total net revenue

174,684

175,947

350,631

11,308

361,939

Expenses
Compensation

67,785

50,917

118,702

16,436

135,138

Loan origination

26,879

-

26,879

-

26,879

Technology

22,901

10,099

33,000

(130

)

32,870

Servicing

-

28,907

28,907

-

28,907

Professional services

2,521

1,947

4,468

5,216

9,684

Occupancy and equipment

4,230

2,716

6,946

1,826

8,772

Marketing and advertising

3,984

29

4,013

167

4,180

Legal settlements

853

-

853

159,172

160,025

Other

1,331

4,718

6,049

3,665

9,714

Total expenses

130,484

99,333

229,817

186,352

416,169

Income (loss) before provision for income taxes

$

44,200

$

76,614

$

120,814

$

(175,044

)

$

(54,230

)

PENNYMAC FINANCIAL SERVICES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 
December 31,
2024
September 30,
2024
December 31,
2023
(in thousands, except share amounts)
ASSETS
Cash

$

238,482

$

145,814

$

938,371

Short-term investment at fair value

420,553

667,934

10,268

Principal-only stripped mortgage-backed securities at fair value

825,865

960,267

-

Loans held for sale at fair value

8,217,468

6,565,704

4,420,691

Derivative assets

113,076

190,612

179,079

Servicing advances, net

568,512

400,764

694,038

Mortgage servicing rights at fair value

8,744,528

7,752,292

7,099,348

Investment in PennyMac Mortgage Investment Trust at fair value

944

1,070

1,121

Receivable from PennyMac Mortgage Investment Trust

30,206

32,603

29,262

Loans eligible for repurchase

6,157,172

5,512,289

4,889,925

Other

770,081

642,189

582,460

Total assets

$

26,086,887

$

22,871,538

$

18,844,563

 
LIABILITIES
Assets sold under agreements to repurchase

$

8,685,207

$

6,600,997

$

3,763,956

Mortgage loan participation purchase and sale agreements

496,512

517,527

446,054

Notes payable secured by mortgage servicing assets

2,048,972

1,723,632

1,873,415

Unsecured senior notes

3,164,032

3,162,239

2,519,651

Derivative liabilities

40,900

41,471

53,275

Mortgage servicing liabilities at fair value

1,683

1,718

1,805

Accounts payable and accrued expenses

354,414

331,512

449,896

Payable to PennyMac Mortgage Investment Trust

122,317

81,040

208,210

Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement

25,898

26,099

26,099

Income taxes payable

1,131,000

1,105,550

1,042,886

Liability for loans eligible for repurchase

6,157,172

5,512,289

4,889,925

Liability for losses under representations and warranties

29,129

28,286

30,788

Total liabilities

22,257,236

19,132,360

15,305,960

 
STOCKHOLDERS' EQUITY
Common stock—authorized 200,000,000 shares of $0.0001 par value; issued and outstanding 51,376,616, 51,257,630, and 50,178,963 shares, respectively

5

5

5

Additional paid-in capital

56,072

54,415

24,287

Retained earnings

3,773,574

3,684,758

3,514,311

Total stockholders' equity

3,829,651

3,739,178

3,538,603

Total liabilities and stockholders’ equity

$

26,086,887

$

22,871,538

$

18,844,563

PENNYMAC FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 
Quarter ended
December 31,
2024
September 30,
2024
December 31,
2023
(in thousands, except per share amounts)
Revenues
Net gains on loans held for sale at fair value

$

222,044

$

256,819

$

148,765

Loan origination fees

57,824

49,430

38,059

Fulfillment fees from PennyMac Mortgage Investment Trust

6,356

11,492

4,931

Net loan servicing fees:
Loan servicing fees

472,563

462,037

402,484

Change in fair value of mortgage servicing rights and mortgage servicing liabilities

324,816

(628,258

)

(534,960

)

Mortgage servicing rights hedging results

(608,112

)

242,051

294,787

Net loan servicing fees

189,267

75,830

162,311

Net interest (expense) income :
Interest income

210,859

225,470

164,942

Interest expense

228,111

217,597

170,501

(17,252

)

7,873

(5,559

)

Management fees from PennyMac Mortgage Investment Trust

7,149

7,153

7,252

Other

4,722

3,237

6,180

Total net revenues

470,110

411,834

361,939

Expenses
Compensation

173,090

171,316

135,138

Loan origination

48,046

45,208

26,879

Technology

40,831

37,059

32,870

Servicing

38,088

28,885

28,907

Professional services

9,987

9,339

9,684

Occupancy and equipment

8,173

8,156

8,772

Marketing and advertising

7,765

5,088

4,180

Legal settlements

(106

)

108

160,025

Other

14,872

12,750

9,714

Total expenses

340,746

317,909

416,169

Income before provision for income taxes

129,364

93,925

(54,230

)

Provision for (benefit from) income taxes

24,875

24,557

(17,388

)

Net income (loss)

$

104,489

$

69,368

$

(36,842

)

Earnings (loss) per share
Basic

$

2.04

$

1.36

$

(0.74

)

Diluted

$

1.95

$

1.30

$

(0.74

)

Weighted-average common shares outstanding
Basic

51,274

51,180

49,987

Diluted

53,576

53,495

49,987

Dividend declared per share

$

0.30

$

0.30

$

0.20

PENNYMAC FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

 
Year ended December 31,

2024

2023

2022

(in thousands, except earnings per share)
Revenue
Net gains on loans held for sale at fair value

$

817,368

$

545,943

$

791,633

Loan origination fees

185,700

146,118

169,859

Fulfillment fees from PennyMac Mortgage Investment Trust

26,291

27,826

67,991

Net loan servicing fees:
Loan servicing fees:
From non-affiliates

1,529,452

1,268,650

1,054,828

From PennyMac Mortgage Investment Trust

83,252

81,347

81,915

Other fees

186,776

134,949

91,894

1,799,480

1,484,946

1,228,637

Change in fair value of mortgage servicing rights, mortgage servicing liabilities and excess servicing spread financing

(433,342

)

(605,568

)

354,176

Hedging results

(832,483

)

(236,778

)

(631,484

)

Net loan servicing fees

533,655

642,600

951,329

Net interest expense:
Interest income

793,566

632,924

294,062

Interest expense

819,348

637,777

335,427

(25,782

)

(4,853

)

(41,365

)

Management fees from PennyMac Mortgage Investment Trust

28,623

28,762

31,065

Other

27,876

15,260

15,243

Total net revenue

1,593,731

1,401,656

1,985,755

Expenses
Compensation

632,738

576,964

735,231

Technology

164,092

143,152

139,950

Loan origination

149,547

114,500

173,622

Servicing

105,997

69,433

59,628

Professional services

37,992

60,521

73,270

Occupancy and equipment

32,898

36,558

40,124

Marketing and advertising

21,969

17,631

46,762

Legal settlements

1,591

162,770

4,649

Other

45,881

36,496

47,272

Total expenses

1,192,705

1,218,025

1,320,508

Income before provision for income taxes

401,026

183,631

665,247

Provision for income taxes

89,603

38,975

189,740

Net income

$

311,423

$

144,656

$

475,507

 
Earnings per share
Basic

$

6.11

$

2.89

$

8.96

Diluted

$

5.84

$

2.74

$

8.50

Weighted average shares outstanding
Basic

50,990

49,978

53,065

Diluted

53,356

52,733

55,950

PENNYMAC FINANCIAL SERVICES, INC. RECONCILIATION OF
GAAP NET INCOME TO OPERATING NET INCOME AND ANNUALIZED OPERATING RETURN ON EQUITY

 
Quarter Ended
December 31, 2024
(in thousands, except annualized
operating return on equity)
Net income

$

104,489

Increase in fair value of MSRs and MSLs due to changes in valuation inputs used in the valuation model

540,406

Hedging losses associated with MSRs

(608,112

)

Tax impacts of adjustments(1)

18,078

Operating net income

$

154,117

Average stockholders' equity

$

3,779,247

Annualized operating return on equity

16

%

(1)

Assumes a tax rate of 26.70%

View source version on businesswire.com: https://www.businesswire.com/news/home/20250130438252/en/

Contacts

Media
Kristyn Clark
mediarelations@pennymac.com
805.225.8224


Investors
Kevin Chamberlain
Isaac Garden
PFSI_IR@pennymac.com
818.224.7028



Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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