PennyMac Financial Services(PFSI) - 2025 Q1 - Quarterly Results

Financial Performance - PennyMac Financial Services reported net income of $76.3 million for Q1 2025, or $1.42 per share, on revenue of $430.9 million[2]. - Net income for the quarter ended March 31, 2025, was $76,280 thousand, a decrease of 27% compared to $104,489 thousand for the quarter ended December 31, 2024[37]. - Total net revenues for the quarter were $430,903 thousand, down from $470,110 thousand in the previous quarter, reflecting a decrease of about 8.3%[37]. - Earnings per share (EPS) for the quarter was $1.48, compared to $2.04 in the previous quarter, indicating a decline of approximately 27.5%[37]. - The company declared a dividend of $0.30 per share, consistent with the previous quarter[37]. Loan Production and Servicing - Total loan acquisitions and originations were $28.9 billion in unpaid principal balance (UPB), down 19% from the prior quarter but up 33% from Q1 2024[3]. - For the twelve months ended March 31, 2025, PennyMac Financial's production of newly originated loans totaled $123 billion in unpaid principal balance[29]. - As of March 31, 2025, PennyMac Financial serviced loans totaling $680 billion in unpaid principal balance[29]. - PMT retained 21% of total conventional conforming correspondent loans in Q1 2025, up from 19% in the prior quarter[3]. Income and Expenses - Production segment pretax income was $61.9 million, down from $78.0 million in the prior quarter but up from $48.7 million in Q1 2024[9]. - Servicing segment pretax income was $76.0 million, down from $87.3 million in the prior quarter but up from $23.7 million in Q1 2024[15]. - Net interest income in Q1 2025 totaled $8.8 million, compared to $1.8 million in the prior quarter[13]. - Net interest expense was $27.4 million, compared to $19.5 million in the prior quarter and $11.3 million in the first quarter of 2024[20]. - Total expenses were $326.7 million, down from $340.7 million in the prior quarter, mainly due to lower servicing segment expenses[26]. - Total expenses for the quarter were $326,707 thousand, a slight decrease from $340,746 thousand in the previous quarter[37]. - Servicing segment expenses decreased to $94.6 million from $110.2 million in the prior quarter, primarily due to a reversal in the provision for credit losses[21]. - Corporate and Other segment recorded a pretax loss of $33.7 million, an improvement from $35.9 million in the prior quarter[22]. Assets and Liabilities - Total assets decreased to $23,872,876 thousand as of March 31, 2025, down from $26,086,887 thousand at December 31, 2024, representing a decline of approximately 8.3%[35]. - Total liabilities decreased to $19,969,120 thousand as of March 31, 2025, from $22,257,236 thousand at December 31, 2024, a reduction of about 10.3%[35]. - Net assets under management were $1.9 billion as of March 31, 2025, unchanged from December 31, 2024[24]. Other Financial Metrics - The effective tax rate was 26.8 percent, with a provision for tax expense of $27.9 million recorded[27]. - The company reported net gains on loans held for sale at fair value of $221,037 thousand, slightly down from $222,044 thousand in the previous quarter[37]. - Loan origination fees for the quarter were $46,611 thousand, down from $57,824 thousand in the previous quarter, a decrease of approximately 19.0%[37]. - Fees earned from the fulfillment of correspondent loans on behalf of PMT totaled $5.3 million in Q1 2025, down 17% from the prior quarter but up 32% from Q1 2024[11]. - Revenue from net loan servicing fees totaled $164.3 million, down from $189.3 million in the prior quarter, but up from $101.0 million in the first quarter of 2024[17]. - Loan servicing fees amounted to $488.5 million, an increase from $472.6 million in the prior quarter and $424.2 million in the first quarter of 2024[19]. - The change in fair value of mortgage servicing rights and liabilities resulted in a loss of $430,956 thousand for the quarter, compared to a gain of $324,816 thousand in the previous quarter[37]. Strategic Initiatives - The company plans to implement artificial intelligence throughout its technology stack to enhance capabilities and efficiencies[4]. - The company issued $850 million of 8-year unsecured senior notes due in February 2033[5].