PennyMac Financial Services(US:PFSI)2026-01-29 21:30Financial Performance - Net income for Q4 2025 was $106.8 million, or $1.97 per share, on total net revenues of $538.0 million[2]. - Full-year 2025 net income was $501.1 million, a 61% increase from $311.4 million in 2024, with a return on equity of 12%[5]. - Total net revenue for 2025 was $2.0 billion, up 25% from $1.6 billion in 2024[5]. - Net income for the quarter ended December 31, 2025, was $106,831 thousand, a decrease of 41.1% compared to $181,503 thousand in the previous quarter[35]. - Basic earnings per share for the quarter was $2.05, down from $3.51 in the previous quarter, indicating a decline of 41.7%[35]. Loan Activity - Total loan acquisitions and originations reached $42.2 billion in unpaid principal balance (UPB), up 16% from the prior quarter and 18% year-over-year[3]. - PFSI's production of newly originated loans in 2025 totaled $145 billion in UPB, maintaining its position as a top lender in the nation[29]. - Total locks, including those for PMT, were $46.8 billion in UPB, up 8% from the prior quarter and 29% from Q4 2024[3]. - Loan origination fees for the quarter increased to $68,437 thousand, up from $61,696 thousand in the previous quarter, marking an increase of 12.4%[35]. Servicing Portfolio - Servicing portfolio grew to $733.6 billion in UPB, up 2% from Q3 2025 and 10% from Q4 2024[5]. - As of December 31, 2025, PFSI's total loans serviced amounted to $733.6 billion, an increase from $665.8 billion in the fourth quarter of 2024[17]. - Revenue from net loan servicing fees totaled $149.8 million, down from $241.2 million in the prior quarter and $189.3 million in Q4 2024[18]. Income Segments - Production segment pretax income was $127.3 million, up 4% from the prior quarter and 63% from Q4 2024[3]. - The servicing segment pretax income was $37.3 million, down from $157.4 million in the prior quarter[3]. - The servicing segment pretax income was $37.3 million, a significant decrease from $157.4 million in the prior quarter and $87.3 million in Q4 2024[17]. Expenses and Liabilities - Total expenses for the company were $403.6 million, up from $396.5 million in the prior quarter due to higher expenses in both production and servicing segments[26]. - Total expenses for the quarter were $403,600 thousand, an increase from $396,524 thousand in the previous quarter, reflecting a 1.7% rise[35]. - Total liabilities rose to $25,079,713 thousand as of December 31, 2025, compared to $21,193,234 thousand in the previous quarter, reflecting a 18.4% increase[33]. Assets and Equity - Total assets increased to $29,388,689 thousand as of December 31, 2025, up from $25,401,120 thousand in the previous quarter, representing a 11.6% increase[33]. - Average PMT shareholders' equity was $1.8 billion for Q4 2025, unchanged from Q3 2025 and slightly down from Q4 2024[24]. - Retained earnings increased to $4,212,101 thousand as of December 31, 2025, compared to $4,121,201 thousand in the previous quarter[33]. Interest and Tax - Net interest expense increased to $19.2 million compared to $15.1 million in the prior quarter and $19.5 million in Q4 2024[20]. - The effective tax rate for the company was 20.5 percent, with a future expected tax provision rate of 25.1 percent[27]. Other Financial Activities - Issued $2.35 billion of unsecured senior notes with maturities ranging from 2032 to 2034[5]. - The company completed the sale of an MSR portfolio totaling $24.4 billion in UPB[5]. - The company recorded net valuation-related gains of $1.0 million, consisting of MSR fair value gains of $40.4 million and hedging losses of $39.4 million[18].