PennyMac Financial Services(PFSI) - 2024 Q4 - Annual Results

Financial Performance - Net income for Q4 2024 was $104.5 million, or $1.95 per share, on revenue of $470.1 million, with book value per share increasing to $74.54[2] - Full-year 2024 net income was $311.4 million, up from $144.7 million in 2023, with pretax income increasing to $401.0 million from $183.6 million[6] - Total net revenue for 2024 was $1.6 billion, an increase of 14% from $1.4 billion in 2023[7] - Total net revenues for Q4 2024 reached $470,110,000, an increase of 14.1% from $411,834,000 in Q3 2024 and up 30.0% from $361,939,000 in Q4 2023[41] - Net income for Q4 2024 was $104,489,000, compared to $69,368,000 in Q3 2024, marking a 50.6% increase, and a significant recovery from a loss of $36,842,000 in Q4 2023[41] - Basic earnings per share for Q4 2024 was $2.04, up from $1.36 in Q3 2024 and a loss of $0.74 in Q4 2023[41] - For the full year 2024, total net revenue was $1,593,731,000, a 13.7% increase from $1,401,656,000 in 2023[43] - The company reported a net income of $311,423,000 for the year ended December 31, 2024, compared to $144,656,000 in 2023, representing a 115.5% increase[43] Loan and Servicing Activity - Total loan acquisitions and originations in Q4 2024 reached $35.7 billion in unpaid principal balance (UPB), up 13% from the prior quarter and 34% from Q4 2023[5] - The servicing portfolio grew to $665.8 billion in UPB, a 3% increase from September 30, 2024, and a 10% increase from December 31, 2023[6] - As of December 31, 2024, PennyMac Financial's total prime servicing portfolio reached $665.8 billion, an increase from $648.0 billion in the prior quarter and $607.2 billion year-over-year[18] - PennyMac Financial's production of newly originated loans in 2024 totaled $116 billion in unpaid principal balance, positioning it as a top lender in the nation[32] - Loan servicing fees from non-affiliates for the year 2024 were $1,529,452,000, compared to $1,268,650,000 in 2023, reflecting a growth of 20.5%[43] Income and Expenses - The production segment generated pretax income of $78.0 million, down from $129.4 million in the prior quarter but up from $44.2 million in Q4 2023[11] - Servicing segment pretax income was $87.3 million, significantly up from $3.3 million in the prior quarter and $76.6 million in Q4 2023[6] - Total expenses for the company were $340.7 million, up from $317.9 million in the prior quarter, primarily due to increased production and servicing segment expenses[27] - Total expenses for Q4 2024 were $340,746,000, an increase from $317,909,000 in Q3 2024 but a decrease from $416,169,000 in Q4 2023[41] - The company reported total expenses of $317,909,000 for the quarter ended September 30, 2024, an increase from $416,169,000 in the fourth quarter of 2023, indicating a decrease of 23.5%[36][37] Cash and Assets - The company's cash position improved to $238,482,000 as of December 31, 2024, compared to $145,814,000 at the end of September 2024, representing a 63.4% increase[39] - Total assets as of December 31, 2024, reached $26,086,887,000, up from $22,871,538,000 as of September 30, 2024, indicating a growth of 14.4%[39] - Total liabilities increased to $22,257,236,000 as of December 31, 2024, from $19,132,360,000 at the end of September 2024, marking a rise of 11.1%[39] Dividends and Shareholder Returns - The quarterly cash dividend was increased to $0.30 per share, a 50% increase from the previous $0.20[7] - The company declared a dividend of $0.30 per share for Q4 2024, consistent with Q3 2024 and an increase from $0.20 in Q4 2023[41] Tax and Interest - The effective tax rate was 19.2%, a decrease from the prior quarter's rate of 26.85%[28] - The company reported net interest expense of $19.5 million, compared to net interest income of $9.5 million in the prior quarter[21] - Interest income for the year 2024 was $793,566,000, up from $632,924,000 in 2023, while interest expense increased to $819,348,000 from $637,777,000[43] Market Outlook and Strategy - The company expects PMT to retain all jumbo production and 15% to 25% of total conventional conforming correspondent production in Q1 2025[13] - The company plans to continue expanding its market presence and investing in technology to enhance operational efficiency and customer service[36] Valuation and Gains - The company experienced net valuation-related losses of $67.7 million, which included MSR fair value gains of $540.4 million and hedging losses of $608.1 million[19] - The mortgage servicing rights at fair value increased to $8,744,528,000 as of December 31, 2024, compared to $7,752,292,000 as of September 30, 2024, reflecting a growth of 12.8%[39]