PennyMac Financial Services(PFSI) - 2024 Q1 - Quarterly Results

Financial Performance - PennyMac Financial Services reported net income of $39.3 million for Q1 2024, or $0.74 per share, on revenue of $305.7 million[2]. - Pretax income was $43.9 million, a significant recovery from a pretax loss of $54.2 million in the prior quarter and an increase from $38.1 million in Q1 2023[4]. - Total net revenues for the quarter ended March 31, 2024, were $305,660,000, a decrease of 15.5% from $361,939,000 in the previous quarter[36]. - Net income for the quarter was $39,308,000, compared to a net loss of $36,842,000 in the previous quarter, representing a significant turnaround[36]. - Operating net income for the quarter was $131,672,000, with an annualized operating return on equity of 15%[38]. - Basic earnings per share for the quarter was $0.78, compared to a loss of $0.74 in the previous quarter[36]. Loan Activity - Total loan acquisitions and originations were $21.7 billion in unpaid principal balance (UPB), down 19% from the prior quarter and 5% from Q1 2023[4]. - The company originated $98 billion in newly originated loans for the twelve months ended March 31, 2024, making it the second largest mortgage lender in the nation[28]. Servicing Portfolio - The servicing portfolio grew to $617.4 billion in UPB, up 2% from December 31, 2023, and 9% from March 31, 2023[15]. - The company serviced loans totaling $617 billion in unpaid principal balance, making it a top five mortgage servicer in the nation[28]. Revenue and Expenses - Production segment revenue totaled $184.7 million, up 5% from the prior quarter and 52% from Q1 2023, driven by higher net gains on loans held for sale[10]. - Net gains on mortgage loans held for sale were $162.4 million, compared to $148.8 million in the prior quarter and $104.4 million in Q1 2023[11]. - Total expenses for the company were $261.8 million, down from $416.2 million in the prior quarter, excluding the arbitration accrual, total expenses increased by $4.0 million[24]. - Total expenses decreased to $261,777,000 from $416,169,000 in the previous quarter, a reduction of 37.1%[36]. Interest Income and Fees - Interest income increased to $92.4 million in Q1 2024, up from $91.6 million in the prior quarter, while interest expense decreased to $103.9 million from $105.3 million[19]. - Net loan servicing fees for Q1 2024 were $100.954 million, a decrease from $162.311 million in Q4 2023 and $148.837 million in Q1 2023[18]. - Loan servicing fees increased to $424,184,000 from $402,484,000 in the previous quarter, reflecting a growth of 5.2%[36]. Investment Management - The investment management segment reported pretax income of $3.1 million, up from $1.9 million in the prior quarter[5]. - Net assets of PennyMac Mortgage Investment Trust were $1.959 billion as of March 31, 2024, essentially unchanged from the prior quarter[23]. Capital Management - The company issued new 5-year $425 million term notes secured by Ginnie Mae MSR and servicing advances, while redeeming $425 million of term notes due August 2025[5]. - Book value per share decreased to $70.13 from $70.52 at December 31, 2023, due to the issuance of additional common stock related to equity compensation[26]. Technology Development - The company continues to develop industry-leading mortgage banking technology, aiming to unlock additional value for stakeholders over time[6].