PennyMac Financial Services(PFSI)

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Earnings Estimates Moving Higher for PennyMac (PFSI): Time to Buy?
Zacks Investment Research· 2024-02-12 18:20
PennyMac Financial (PFSI) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.The upward trend in estimate revisions for this mortgage banking and investment management company reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows ...
PennyMac Mortgage Investment Trust Declares First Quarter 2024 Dividends for Its Preferred Shares
Businesswire· 2024-02-08 13:00
WESTLAKE VILLAGE, Calif.--(BUSINESS WIRE)--PennyMac Mortgage Investment Trust (NYSE: PMT) announced today that its Board of Trustees has declared cash dividends for the first quarter of 2024 on its 8.125% Series A Fixed-to-Floating Rate Cumulative Redeemable Preferred Shares of Beneficial Interest (NYSE: PMT PRA), its 8.000% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Shares of Beneficial Interest (NYSE: PMT PRB) and its 6.750% Series C Cumulative Redeemable Preferred Shares of Beneficia ...
PennyMac (PFSI) Q4 Earnings: Taking a Look at Key Metrics Versus Estimates
Zacks Investment Research· 2024-02-02 01:01
For the quarter ended December 2023, PennyMac Financial (PFSI) reported revenue of $361.94 million, up 6.3% over the same period last year. EPS came in at $1.76, compared to $0.89 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $413.35 million, representing a surprise of -12.44%. The company delivered an EPS surprise of +74.26%, with the consensus EPS estimate being $1.01.While investors scrutinize revenue and earnings changes year-over-year and how they compare with ...
PennyMac Financial (PFSI) Q4 Earnings Surpass Estimates
Zacks Investment Research· 2024-02-01 23:36
PennyMac Financial (PFSI) came out with quarterly earnings of $1.76 per share, beating the Zacks Consensus Estimate of $1.01 per share. This compares to earnings of $0.89 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 74.26%. A quarter ago, it was expected that this mortgage banking and investment management company would post earnings of $1.57 per share when it actually produced earnings of $1.77, delivering a surprise of 12 ...
PennyMac Financial (PFSI) Earnings Expected to Grow: Should You Buy?
Zacks Investment Research· 2024-01-25 16:07
PennyMac Financial (PFSI) is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended December 2023. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The stock might move higher if these key numbers top expectations in the upcoming earnings report. On the other hand, if they miss, the ...
PennyMac Financial Services(PFSI) - 2023 Q3 - Quarterly Report
2023-10-30 16:00
[PART I. FINANCIAL INFORMATION](index=8&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides the unaudited consolidated financial statements and management's discussion and analysis for PennyMac Financial Services, Inc [Financial Statements](index=8&type=section&id=Item%201.%20Financial%20Statements) Unaudited consolidated financial statements for Q3 2023, including balance sheets, income, cash flows, and notes [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) As of September 30, 2023, total assets increased to $18.95 billion, primarily driven by growth in Loans held for sale and Mortgage servicing rights Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$18,949,314** | **$16,822,584** | | Cash | $1,177,304 | $1,328,536 | | Loans held for sale at fair value | $5,186,656 | $3,509,300 | | Mortgage servicing rights at fair value | $7,084,356 | $5,953,621 | | **Total Liabilities** | **$15,376,441** | **$13,351,535** | | Assets sold under agreements to repurchase | $4,411,747 | $3,001,283 | | Notes payable secured by mortgage servicing assets | $2,673,402 | $1,942,646 | | Unsecured senior notes | $1,782,689 | $1,779,920 | | **Total Stockholders' Equity** | **$3,572,873** | **$3,471,049** | [Consolidated Statements of Income](index=9&type=section&id=Consolidated%20Statements%20of%20Income) Net income for Q3 2023 was $92.9 million, down from $135.1 million in Q3 2022, driven by lower net gains on loans and servicing fees Financial Performance Summary (in thousands, except per share data) | Metric | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | Total net revenues | $400,308 | $476,290 | $1,039,717 | $1,645,309 | | Net gains on loans held for sale | $151,374 | $168,694 | $397,178 | $689,720 | | Net loan servicing fees | $185,374 | $243,742 | $480,289 | $768,498 | | Total expenses | $273,511 | $290,818 | $801,856 | $1,047,791 | | **Net income** | **$92,870** | **$135,134** | **$181,498** | **$437,890** | | **Diluted EPS** | **$1.77** | **$2.46** | **$3.44** | **$7.69** | [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was $2.01 billion for the nine months ended September 30, 2023, a significant shift from the prior year Cash Flow Summary (Nine months ended Sep 30, in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(2,012,508) | $5,543,826 | | Net cash used in investing activities | $(377,976) | $(483,567) | | Net cash provided by (used in) financing activities | $2,239,249 | $(3,841,670) | | **Net (decrease) increase in cash** | **$(151,235)** | **$1,218,589** | [Notes to Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Detailed notes cover PMT relationship, valuation methods, loan servicing, debt, and legal contingencies including Black Knight arbitration - The company has a significant business relationship with PennyMac Mortgage Investment Trust (PMT), generating revenues from management, servicing, and fulfillment fees, and purchasing a large volume of its loan production from PMT. For the nine months ended Sep 30, 2023, revenues from PMT were **11% of total net revenues**, and **84% of newly originated loan production** was purchased from PMT[34](index=34&type=chunk) - The company is involved in an arbitration with Black Knight Servicing Technologies, LLC, which alleges breach of contract and trade secret misappropriation. Black Knight seeks damages exceeding **$340 million**. The arbitration hearing concluded in June 2023, with a final order expected later in the year. The company believes the complaint is without merit[176](index=176&type=chunk)[177](index=177&type=chunk) Total Loan Servicing Portfolio by UPB (in thousands) | Category | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Servicing rights owned | $356,478,781 | $318,099,010 | | Subservicing for PMT | $232,914,107 | $233,575,672 | | **Total Loans Serviced** | **$589,392,888** | **$551,674,682** | - Subsequent to the reporting period, the company issued a **$125 million** syndicated term loan secured by Ginnie Mae MSRs on October 25, 2023, and declared a cash dividend of **$0.20 per share** on October 26, 2023[200](index=200&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=79&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses high-interest rate impacts on origination, MSRs, and pre-tax income, alongside balance sheet expansion, increased leverage, and compliance with capital requirements [Results of Operations](index=81&type=section&id=Results%20of%20Operations) Pre-tax income for Q3 2023 was $126.8 million, down from $185.5 million in Q3 2022, primarily due to lower servicing fees and loan gains - The decrease in Q3 2023 pre-tax income was mainly due to lower Net loan servicing fees from MSR valuation losses and reduced Net gains on loans held for sale from lower consumer direct lending volumes[216](index=216&type=chunk) - The decrease in nine-month 2023 pre-tax income was driven by lower Net gains on loans held for sale (due to reduced consumer direct and EBO volumes), lower fulfillment fees, and higher MSR valuation losses, partially offset by lower compensation and origination expenses[217](index=217&type=chunk) Income Before Provision for Income Taxes by Segment (in thousands) | Segment | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | Production | $25,193 | $38,572 | $29,968 | $57,496 | | Servicing | $101,204 | $145,283 | $205,195 | $538,061 | | Investment Management | $400 | $1,617 | $2,698 | $1,961 | | **Total** | **$126,797** | **$185,472** | **$237,861** | **$597,518** | [Balance Sheet Analysis](index=100&type=section&id=Balance%20Sheet%20Analysis) Total assets grew by $2.1 billion to $18.9 billion, driven by increases in loans held for sale and MSRs, leading to higher leverage - The increase in total assets was primarily driven by a **$1.7 billion** rise in loans held for sale and a **$1.1 billion** increase in MSRs[262](index=262&type=chunk) - The increase in total liabilities was mainly due to a **$2.4 billion** increase in borrowings to fund the growth in loan inventory[263](index=263&type=chunk) Leverage Ratios | Ratio | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total debt / Stockholders' equity | 2.6 | 2.0 | | Total debt / Tangible stockholders' equity | 2.7 | 2.1 | [Liquidity and Capital Resources](index=101&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is maintained via cash flows and debt facilities, with compliance to financial covenants and new stringent capital requirements, and **$1.8 billion** utilized from the **$2 billion** stock repurchase program - The company is subject to revised, more stringent capital and liquidity requirements from the Agencies, which became effective September 30, 2023. Management believes the company is in compliance with these new rules[284](index=284&type=chunk) - The company's debt facilities contain various financial covenants, including a minimum of **$100 million** in unrestricted cash, a minimum tangible net worth of **$1.25 billion**, and a maximum total indebtedness to tangible net worth ratio of **10:1**[278](index=278&type=chunk)[281](index=281&type=chunk) - As of September 30, 2023, the company has repurchased approximately **$1.8 billion** of common shares under its **$2 billion** stock repurchase program[285](index=285&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=109&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces fair value, interest rate, and prepayment risks, mitigated by hedging strategies using derivatives like MBS forwards and Treasury futures - The company's primary market risks are fair value risk, interest rate risk, and prepayment risk, which affect its IRLCs, loans held for sale, and MSRs[299](index=299&type=chunk) - To manage risk, the company uses MBS forward sale contracts to hedge IRLCs and loans held for sale. For MSRs, it uses a combination of MBS forwards, Treasury futures, and options to mitigate exposure to interest rate shifts[307](index=307&type=chunk) MSR Fair Value Sensitivity as of Sep 30, 2023 (in thousands) | Change in fair value attributable to shift in: | +5% | +10% | +20% | | :--- | :--- | :--- | :--- | | Prepayment speed (adverse change) | $(89,373) | $(176,093) | $(342,038) | | Pricing spread (adverse change) | $(96,272) | $(189,990) | $(370,130) | | Annual per-loan cost of servicing (adverse change) | $(43,810) | $(87,619) | $(175,238) | [Controls and Procedures](index=113&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2023, with no material changes in internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of September 30, 2023[312](index=312&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended September 30, 2023, that have materially affected, or are reasonably likely to materially affect, internal controls[313](index=313&type=chunk) [PART II. OTHER INFORMATION](index=114&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits [Legal Proceedings](index=114&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various ordinary course legal proceedings, which management believes will not have a material adverse effect - The company is party to ordinary course legal proceedings, which management believes will not have a material adverse effect on its financial condition. For details, see Note 16[315](index=315&type=chunk) [Risk Factors](index=114&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2022 - No material changes from the risk factors disclosed in the 2022 Annual Report on Form 10-K have been reported[316](index=316&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=114&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities occurred during Q3 2023, and no common stock was repurchased under the **$2 billion** authorization - There were no sales of unregistered equity securities in Q3 2023[317](index=317&type=chunk) - The company did not repurchase any common stock during Q3 2023. The board had previously approved a **$2 billion** stock repurchase program[318](index=318&type=chunk) [Defaults Upon Senior Securities](index=114&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) None - None[319](index=319&type=chunk) [Mine Safety Disclosures](index=114&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable - Not applicable[320](index=320&type=chunk) [Other Information](index=114&type=section&id=Item%205.%20Other%20Information) As of September 30, 2023, no directors or Section 16 officers adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - No directors or Section 16 officers adopted, modified, or terminated any Rule 10b5-1 trading arrangements as of September 30, 2023[321](index=321&type=chunk) [Exhibits](index=115&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including various agreements, certifications, and interactive data files - Exhibits filed include corporate governance documents, material agreements, Sarbanes-Oxley certifications, and XBRL data files[322](index=322&type=chunk)[325](index=325&type=chunk)
PennyMac Financial Services(PFSI) - 2023 Q3 - Earnings Call Transcript
2023-10-27 03:16
PennyMac Financial Services, Inc. (NYSE:PFSI) Q3 2023 Earnings Conference Call October 26, 2023 5:00 PM ET Company Participants David Spector - Chairman & Chief Executive Officer Dan Perotti - Chief Financial Officer Conference Call Participants Kevin Barker - Piper Sandler Bose George - KBW Michael Kaye - Wells Fargo Eric Hagen - BTIG Kyle Joseph - Jefferies Jay McCanless - Wedbush Securities Priya Rangarajan - RBC Capital Markets Kevin Barker - Piper Sandler Operator Good afternoon, and welcome to PennyMa ...
PennyMac Financial Services(PFSI) - 2023 Q2 - Quarterly Report
2023-08-02 16:00
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 PennyMac Financial Services, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) Delaware 83-1098934 3043 Townsgate Road, Westlake Village, California 91361 (Addre ...
PennyMac Financial Services(PFSI) - 2023 Q2 - Earnings Call Transcript
2023-07-28 02:04
PennyMac Financial Services, Inc. (NYSE:PFSI) Q2 2023 Earnings Conference Call July 27, 2023 5:00 PM ET Company Participants David Spector - Chairman & Chief Executive Officer Dan Perotti - Chief Financial Officer Conference Call Participants Kevin Barker - Piper Sandler Michael Kaye - Wells Fargo Doug Harter - Credit Suisse Bose George - KBW Henry Coffey - Wedbush Securities Kyle Joseph - Jefferies Eric Hagen - BTIG Trevor Cranston - JMP Securities Courtney Bahlman - Barclays Operator Good afternoon, and ...
PennyMac Financial Services(PFSI) - 2023 Q2 - Earnings Call Presentation
2023-07-28 01:06
2Q23 EARNINGS REPORT July 2023 This presentation 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," "p ...