PennyMac Financial Services(PFSI)

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PennyMac Financial Services(PFSI) - 2023 Q1 - Quarterly Report
2023-05-02 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 March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38727 PennyMac Financial Services, Inc. (Exact name of registrant as specified in its charter) (State or other ...
PennyMac Financial Services(PFSI) - 2023 Q1 - Earnings Call Presentation
2023-05-01 14:36
April 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," "plan," and other expr ...
PennyMac Financial Services(PFSI) - 2022 Q4 - Annual Report
2023-02-21 16:00
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Form 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-38727 PennyMac Financial Services, Inc. (Exact name of registrant as specified in its charter) Delaware (State or ot ...
PennyMac Financial Services(PFSI) - 2022 Q4 - Earnings Call Transcript
2023-02-03 01:28
PennyMac Financial Services, Inc. (NYSE:PFSI) Q4 2022 Earnings Conference Call February 2, 2023 5:30 PM ET Company Participants Isaac Garden - Vice President, Investor Relations David Spector - Chairman & Chief Executive Officer Doug Jones - President Dan Perotti - Senior Managing Director & Chief Financial Officer Isaac Garden Good afternoon, and welcome to the Fourth Quarter and Full Year 2022 Earnings Discussion for PennyMac Financial Services, Inc. The slides that accompany this discussion are available ...
PennyMac Financial Services(PFSI) - 2022 Q3 - Earnings Call Presentation
2022-11-02 14:24
3Q22 EARNINGS REPORT PennyMac Financial Services, Inc. October 2022 FORWARD-LOOKING STATEMENTS 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 ...
PennyMac Financial Services(PFSI) - 2022 Q3 - Quarterly Report
2022-11-01 16:00
[PART I. FINANCIAL INFORMATION](index=7&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) Unaudited consolidated financial statements for Q3 2022 reflect a decrease in total assets to $16.36 billion and net income to $135.1 million, driven by lower loan sale gains offset by MSR fair value increases [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) As of September 30, 2022, total assets decreased by 13% to $16.36 billion, primarily due to a 57% reduction in loans held for sale, while MSRs increased by 46% and total liabilities decreased by 16% Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2022 | December 31, 2021 | Change | | :--- | :--- | :--- | :--- | | Cash | $1,558,679 | $340,069 | +358% | | Loans held for sale at fair value | $4,149,726 | $9,742,483 | -57% | | Mortgage servicing rights at fair value | $5,661,672 | $3,878,078 | +46% | | **Total assets** | **$16,361,811** | **$18,776,612** | **-13%** | | Assets sold under agreements to repurchase | $3,487,335 | $7,292,735 | -52% | | Unsecured senior notes | $1,778,988 | $1,776,219 | +0.2% | | **Total liabilities** | **$12,879,721** | **$15,358,287** | **-16%** | | **Total stockholders' equity** | **$3,482,090** | **$3,418,325** | **+1.9%** | [Consolidated Statements of Income](index=8&type=section&id=Consolidated%20Statements%20of%20Income) Q3 2022 net income decreased 45.8% to $135.1 million, primarily due to a 73.1% drop in net gains on loans held for sale, partially offset by a 624.8% increase in net loan servicing fees and a 34.9% reduction in total expenses Quarterly Income Statement Summary (in thousands, except EPS) | Metric | Q3 2022 | Q3 2021 | YoY Change | | :--- | :--- | :--- | :--- | | Total net revenues | $476,290 | $786,612 | -39.5% | | Net gains on loans held for sale | $168,694 | $626,754 | -73.1% | | Net loan servicing fees | $243,742 | $33,630 | +624.8% | | Total expenses | $290,818 | $447,063 | -34.9% | | **Net income** | **$135,134** | **$249,310** | **-45.8%** | | **Diluted EPS** | **$2.46** | **$3.80** | **-35.3%** | Nine-Month Income Statement Summary (in thousands, except EPS) | Metric | Nine Months 2022 | Nine Months 2021 | YoY Change | | :--- | :--- | :--- | :--- | | Total net revenues | $1,645,309 | $2,473,550 | -33.5% | | Net gains on loans held for sale | $689,720 | $1,963,743 | -64.9% | | Net loan servicing fees | $768,498 | $88,221 | +771.1% | | Total expenses | $1,047,791 | $1,348,478 | -22.3% | | **Net income** | **$437,890** | **$830,407** | **-47.3%** | | **Diluted EPS** | **$7.69** | **$11.98** | **-35.8%** | [Consolidated Statements of Changes in Stockholders' Equity](index=9&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Stockholders' equity increased to $3.48 billion by September 30, 2022, driven by net income, largely offset by common stock repurchases and dividend payments Changes in Stockholders' Equity (Nine Months Ended Sep 30, 2022, in thousands) | Item | Amount | | :--- | :--- | | Balance, December 31, 2021 | $3,418,325 | | Net income | $437,890 | | Repurchase of common stock | ($354,759) | | Common stock dividends | ($44,206) | | Stock-based compensation & other | $24,840 | | **Balance, September 30, 2022** | **$3,482,090** | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly increased to $5.54 billion for the nine months ended September 30, 2022, primarily due to a decrease in loans held for sale, leading to a $1.22 billion overall cash increase Cash Flow Summary (Nine Months Ended Sep 30, in thousands) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $5,543,826 | $2,770,083 | | Net cash used in investing activities | ($483,567) | ($301,458) | | Net cash used in financing activities | ($3,841,670) | ($2,524,885) | | **Net increase (decrease) in cash** | **$1,218,589** | **($56,260)** | [Notes to Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, significant relationships, the $539.1 billion loan servicing portfolio, fair value of Level 3 assets like MSRs, debt structure, and regulatory capital compliance - Revenues generated from PennyMac Mortgage Investment Trust (PMT) accounted for **10% of total net revenue for Q3 2022** and **8% for the first nine months of 2022**[35](index=35&type=chunk) - The company's total loan servicing portfolio reached **$539.1 billion** as of September 30, 2022, up from **$509.7 billion** at the end of 2021, including **$308.1 billion** of owned servicing rights and **$231.0 billion** subserviced for PMT[83](index=83&type=chunk)[86](index=86&type=chunk) - The company is subject to various legal and regulatory proceedings, including a complaint from Black Knight Servicing Technologies alleging breach of contract and misappropriation of trade secrets, which management believes is without merit[204](index=204&type=chunk)[205](index=205&type=chunk) - The company's board of directors increased its common stock repurchase program to **$2 billion** in August 2021, with **6.7 million shares** repurchased for **$354.8 million** during the nine months ended September 30, 2022[211](index=211&type=chunk)[212](index=212&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=59&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the decline in pre-tax income to challenging mortgage market conditions and rising interest rates, which positively impacted MSRs, while actively reducing expenses and improving leverage ratios - Management highlights that rising interest rates are expected to reduce the total mortgage origination market from an estimated **$4.4 trillion in 2021** to a forecast of **$2.4 trillion for 2022**[253](index=253&type=chunk) - The decrease in income before taxes for Q3 2022 was primarily due to a **$458.1 million decrease in Net gains on loans held for sale**, partially offset by a **$210.1 million increase in Net loan servicing fees** and a **$156.2 million decrease in total expenses**[255](index=255&type=chunk) - The company reduced its average headcount to **4,911 in Q3 2022** from **7,247 in Q3 2021**, leading to a significant decrease in compensation expense[292](index=292&type=chunk) Leverage Ratios | Ratio | September 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Total debt / Stockholders' equity | 2.1x | 3.2x | | Total debt / Tangible stockholders' equity | 2.2x | 3.3x | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=79&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to interest rate and prepayment risks, mitigated by derivative instruments, with sensitivity analysis showing MSR fair value decreases of **$286.3 million** and **$309.8 million** for 20% adverse changes in prepayment speed and pricing spread respectively - The primary market risks identified are **fair value risk, interest rate risk, and prepayment risk**[341](index=341&type=chunk) - The company uses a variety of derivatives to hedge its exposures, including MBS forward contracts for IRLCs and loans, and Treasury futures, interest rate swap futures, options, and swaptions for its MSR portfolio[349](index=349&type=chunk) MSR Fair Value Sensitivity as of September 30, 2022 (in thousands) | Change in fair value attributable to shift in: | +5% Adverse Change | +10% Adverse Change | +20% Adverse Change | | :--- | :--- | :--- | :--- | | Prepayment speed | $(75,034) | $(147,692) | $(286,318) | | Pricing spread | $(80,798) | $(159,312) | $(309,839) | | Annual per-loan cost of servicing | $(38,133) | $(76,265) | $(152,531) | [Item 4. Controls and Procedures](index=81&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2022, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that disclosure controls and procedures were effective as of the end of the reporting period[354](index=354&type=chunk) - No material changes to internal control over financial reporting were identified during the quarter ended September 30, 2022[355](index=355&type=chunk) [PART II. OTHER INFORMATION](index=82&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=82&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal and regulatory proceedings in the ordinary course of business, which management does not expect to have a material adverse financial effect - The company is party to various legal proceedings but does not expect them to have a material adverse financial impact[357](index=357&type=chunk) [Item 1A. Risk Factors](index=82&type=section&id=Item%201A.%20Risk%20Factors) No material changes from the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2021, were reported - No material changes to risk factors were reported for the quarter[358](index=358&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=82&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not have any unregistered equity sales in Q3 2022 but repurchased **1,949,025 shares** for **$99.7 million**, with **$334.6 million** remaining under the **$2 billion** repurchase program Stock Repurchase Summary (Q3 2022) | Period | Total Shares Purchased | Average Price Paid | | :--- | :--- | :--- | | July 2022 | 477,946 | $48.21 | | August 2022 | 531,733 | $56.18 | | September 2022 | 939,346 | $49.81 | | **Total** | **1,949,025** | **$51.15** | - As of September 30, 2022, approximately **$334.6 million** remained authorized for repurchase under the company's **$2 billion** stock repurchase program[360](index=360&type=chunk) [Item 3. Defaults Upon Senior Securities](index=82&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported during the period - The company reported no defaults upon senior securities during the period[361](index=361&type=chunk) [Item 4. Mine Safety Disclosures](index=82&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - This item is not applicable to the company[362](index=362&type=chunk) [Item 5. Other Information](index=82&type=section&id=Item%205.%20Other%20Information) No other information was reported under this item - No other information was reported under this item[362](index=362&type=chunk) [Item 6. Exhibits](index=83&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and interactive data files (XBRL)
PennyMac Financial Services(PFSI) - 2022 Q3 - Earnings Call Transcript
2022-10-30 13:15
PennyMac Financial Services, Inc. (NYSE:PFSI) Q3 2022 Results Conference Call October 27, 2022 5:00 PM ET Company Participants Isaac Garden - Vice President, Investor Relations David Spector - Chairman & Chief Executive Officer Doug Jones - President Dan Perotti - Senior Managing Director & Chief Financial Officer Isaac Garden Good afternoon and welcome to the third quarter earnings discussion for PennyMac Financial Services, Inc. The slides that accompany this discussion are available on PennyMac Financial ...
PennyMac Financial Services(PFSI) - 2022 Q2 - Quarterly Report
2022-08-04 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, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38727 PennyMac Financial Services, Inc. (Exact name of registrant as specified in its charter) (State or other j ...
PennyMac Financial Services(PFSI) - 2022 Q2 - Earnings Call Transcript
2022-08-03 18:33
PennyMac Financial Services, Inc. (NYSE:PFSI) Q2 2022 Earnings Conference Call August 2, 2022 4:30 PM ET Company Participants Isaac Garden - Vice President, Investor Relations David Spector - Chairman & Chief Executive Officer Doug Jones - President Dan Perotti - Senior Managing Director & Chief Financial Officer Conference Call Participants Isaac Garden Good afternoon and welcome to the Second Quarter Earnings Discussion for PennyMac Financial Services Inc. The slides that accompany this discussion are av ...
PennyMac Financial Services(PFSI) - 2022 Q2 - Earnings Call Presentation
2022-08-03 16:45
2Q22 EARNINGS REPORT PennyMac Financial Services, Inc. August 2022 FORWARD-LOOKING STATEMENTS 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 l ...