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

Special Note Regarding Forward-Looking Statements This section outlines forward-looking statements and factors that could cause actual results to differ materially - Forward-looking statements are identified by terms such as "may," "will," "should," "potential," "intend," "expect," "seek," "anticipate," "estimate," "approximately," "believe," "could," "project," "predict," "continue," or "plan"[9] - Actual results may differ materially due to various factors, including interest rate changes, macroeconomic and U.S. real estate market conditions, evolving federal, state, and local regulations, lawsuits, dependence on U.S. government-sponsored entities, and operational risks such as managing third-party service providers and cybersecurity[10][13][16] PART I. FINANCIAL INFORMATION This part presents the company's unaudited financial statements, management's discussion, market risk disclosures, and controls Item 1. Financial Statements (Unaudited) This section presents the unaudited consolidated financial statements, including balance sheets, income, equity, and cash flow statements, with detailed notes Consolidated Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' equity Consolidated Balance Sheet Highlights (March 31, 2024 vs. December 31, 2023) | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :--------------------------------- | :----------------------------- | :----------------------------- | | Total Assets | $19,801,741 | $18,844,563 | | Total Liabilities | $16,231,358 | $15,305,960 | | Total Stockholders' Equity | $3,570,383 | $3,538,603 | | Cash | $927,394 | $938,371 | | Loans held for sale at fair value | $5,200,350 | $4,420,691 | | Mortgage servicing rights at fair value | $7,483,210 | $7,099,348 | | Assets sold under agreements to repurchase | $5,435,354 | $3,763,956 | - Total assets increased by $957.2 million, primarily driven by increases in loans held for sale and mortgage servicing rights[20] Consolidated Statements of Income This section reports the company's financial performance over a period, detailing revenues, expenses, and net income Consolidated Statements of Income Highlights (Q1 2024 vs. Q1 2023) | Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | Change (in thousands) | YoY Change (%) | | :--------------------------------- | :--------------------- | :--------------------- | :-------------------- | :------------- | | Total Net Revenues | $305,660 | $302,862 | $2,798 | 0.92% | | Total Expenses | $261,777 | $264,715 | $(2,938) | -1.11% | | Income before provision for income taxes | $43,883 | $38,147 | $5,736 | 15.04% | | Net Income | $39,308 | $30,378 | $8,930 | 29.39% | | Basic EPS | $0.78 | $0.61 | $0.17 | 27.87% | | Diluted EPS | $0.74 | $0.57 | $0.17 | 29.82% | | Net gains on loans held for sale at fair value | $162,441 | $104,385 | $58,056 | 55.62% | | Net loan servicing fees | $100,954 | $148,837 | $(47,883) | -32.17% | | Net interest expense | $(9,343) | $(3,293) | $(6,050) | 183.71% | Consolidated Statements of Changes in Stockholders' Equity This section details changes in the company's equity accounts over a period, including net income, dividends, and stock-based compensation Stockholders' Equity Changes (Q1 2024 vs. Q1 2023) | Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :----------------------------- | :--------------------- | :--------------------- | | Balance, December 31 | $3,538,603 | $3,471,049 | | Net income | $39,308 | $30,378 | | Stock-based compensation | $2,808 | $6,850 | | Common stock dividend ($0.20 per share) | $(10,420) | $(10,777) | | Repurchase of common stock | $0 | $(45,361) | | Balance, March 31 | $3,570,383 | $3,452,190 | - The company did not repurchase common stock in Q1 2024, compared to $45.361 million in Q1 2023[23] Consolidated Statements of Cash Flows This section summarizes cash inflows and outflows from operating, investing, and financing activities over a period Cash Flow Highlights (Q1 2024 vs. Q1 2023) | Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | Change (in thousands) | | :--------------------------------- | :--------------------- | :--------------------- | :-------------------- | | Net cash used in operating activities | $(897,940) | $(3,264,891) | $2,366,951 | | Net cash used in investing activities | $(782,612) | $(20,933) | $(761,679) | | Net cash provided by financing activities | $1,669,575 | $3,455,191 | $(1,785,616) | | Net (decrease) increase in cash and restricted cash | $(10,977) | $169,367 | $(180,344) | | Cash and restricted cash at end of quarter | $927,394 | $1,497,906 | $(570,512) | - Operating cash outflow significantly decreased in Q1 2024, primarily due to changes in loans held for sale[25][252] - Investing activities saw a substantial increase in cash used, driven by the purchase of principal-only stripped mortgage-backed securities and net settlement of derivative financial instruments[28][253] - Financing cash inflow decreased, mainly due to a reduction in net borrowings compared to the prior year[28][254] Notes to Consolidated Financial Statements This section provides detailed explanations and additional information about the figures presented in the primary financial statements Note 1—Organization This note describes the company's corporate structure and primary business activities, including its relationship with subsidiaries and PMT - PennyMac Financial Services, Inc. (PFSI) is a holding corporation that operates and controls Private National Mortgage Acceptance Company, LLC (PNMAC) and its subsidiaries, consolidating their financial results[29] - PNMAC engages in residential mortgage loan production and servicing, and investment management activities, with a portion conducted on behalf of PennyMac Mortgage Investment Trust (PMT)[30] Note 2—Basis of Presentation and Recently Issued Accounting Pronouncements This note outlines accounting principles and discusses the impact of recently issued accounting standards - The consolidated financial statements are prepared in compliance with GAAP for interim financial information and SEC instructions to Form 10-Q[31] - ASU 2023-07 (Segment Reporting) will require enhanced disclosures about significant segment expenses, effective for annual periods beginning December 31, 2024[35][36][39] - ASU 2023-09 (Income Tax Disclosures) will require more detailed reconciliation of expected tax to reported tax and breakdown of income taxes paid, effective for annual financial statements beginning December 31, 2025[37][40] Note 3—Concentration of Risk This note identifies significant concentrations of risk, including reliance on specific financial institutions and related party transactions Revenue and Loan Production from PMT (Q1 2024 vs. Q1 2023) | Metric | Q1 2024 | Q1 2023 | | :--------------------------------- | :------ | :------ | | Revenues from PMT (% of total net revenues) | 11% | 14% | | Loan production purchased from PMT (% of total) | 82% | 84% | - The company maintains cash and short-term investment balances at financial institutions in excess of FDIC insurance limits, posing a risk of recovery in case of financial institution failure[42] Note 4—Variable Interest Entities This note explains the company's involvement with and consolidation of VIEs, particularly those related to MSR securitization - PFSI consolidates Variable Interest Entities (VIEs) involved in securitization transactions backed by mortgage servicing rights (MSRs), as it is deemed the primary beneficiary[43] - MSRs financed by consolidated VIEs are included in 'Mortgage servicing rights at fair value,' variable funding notes in 'Assets sold under agreements to repurchase,' and term debt in 'Notes payable secured by mortgage servicing assets'[44] Note 5—Related Party Transactions This note details transactions and agreements between the company and its related parties, primarily PennyMac Mortgage Investment Trust - The company sells newly originated loans to PMT and has an MSR recapture agreement, targeting a recapture rate of at least 15%[45][46] - Fulfillment fees from PMT decreased by $7.9 million in Q1 2024 compared to Q1 2023, primarily due to fewer loans fulfilled for PMT[49][230] - Base management fees from PMT were $7.188 million in Q1 2024, slightly down from $7.257 million in Q1 2023, due to a decrease in PMT's average shareholders' equity[63][242] Summary of Loan Production and MSR Recapture Activities with PMT (Q1 2024 vs. Q1 2023) | Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :--------------------------------- | :--------------------- | :--------------------- | | MSR recapture incurred | $(353) | $(485) | | Tax service fees earned | $359 | $1,410 | | Fulfillment fee revenue | $4,016 | $11,923 | | UPB of loans fulfilled for PMT | $1,771,681 | $6,628,810 | | Sourcing fees | $1,605 | $1,328 | | UPB of loans purchased from PMT | $16,046,855 | $13,276,586 | Loan Servicing Fees Earned from PMT (Q1 2024 vs. Q1 2023) | Loan type serviced | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :----------------- | :--------------------- | :--------------------- | | Prime servicing | $20,200 | $20,329 | | Special servicing | $62 | $120 | | Total | $20,262 | $20,449 | Expense Reimbursements from PMT (Q1 2024 vs. Q1 2023) | Reimbursement Type | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :----------------- | :--------------------- | :--------------------- | | Expenses incurred on PMT's behalf, net | $6,414 | $5,661 | | Common overhead incurred by the Company | $1,944 | $1,821 | | Compensation | $165 | $165 | | Total | $8,523 | $7,647 | Receivable from and Payable to PMT (March 31, 2024 vs. December 31, 2023) | Account | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :--------------------------------- | :----------------------------- | :----------------------------- | | Receivable from PMT | $30,835 | $29,262 | | Payable to PMT | $127,993 | $208,210 | Note 6—Loan Sales and Servicing Activities This note describes the company's activities in selling loans and its ongoing involvement through servicing and representation/warranty liabilities - The company sells loans in the secondary mortgage market without recourse for credit losses but maintains continuing involvement through servicing arrangements and representation/warranty liabilities[73] - The servicing advance valuation allowance is estimated based on historical collection and loss experience, current conditions, and reasonable and supportable forecasts[75] Cash Flows from Loan Sales with Continuing Involvement (Q1 2024 vs. Q1 2023) | Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :------------- | :--------------------- | :--------------------- | | Sales proceeds | $19,676,917 | $13,385,341 | | Servicing fees received | $336,248 | $268,423 | Servicing Advance Valuation Allowance (Q1 2024 vs. Q1 2023) | Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :---------------------- | :--------------------- | :--------------------- | | Balance at beginning of quarter | $73,991 | $78,992 | | Reversals of provision for losses | $(1,541) | $(3,081) | | Charge-offs, net | $(5,123) | $(733) | | Balance at end of quarter | $67,327 | $75,178 | Total Loan Servicing Portfolio by UPB (March 31, 2024 vs. December 31, 2023) | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :--------------------------------- | :----------------------------- | :----------------------------- | | Unpaid principal balance of loans outstanding | $364,441,567 | $352,790,614 | | Total loans serviced | $617,424,038 | $607,216,769 | | Delinquent loans (30-89 days) | $12,128,892 | $13,775,493 | | Delinquent loans (90+ days, not in foreclosure) | $6,251,718 | $6,754,282 | | Loans in bankruptcy | $1,479,461 | $1,415,614 | Top 5 States by UPB in Loan Servicing Portfolio (March 31, 2024 vs. December 31, 2023) | State | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :--------- | :----------------------------- | :----------------------------- | | California | $73,344,855 | $72,788,272 | | Florida | $59,174,541 | $57,824,310 | | Texas | $58,318,589 | $56,437,082 | | Virginia | $35,562,555 | $35,376,266 | | Maryland | $26,865,117 | $26,746,355 | Note 7—Fair Value This note explains fair value measurement methodologies, categorizations, and key unobservable inputs for financial instruments - Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (other significant observable inputs), and Level 3 (significant unobservable inputs)[80][82] - The company elects fair value accounting for MSRs, MSLs, and all non-cash financial assets to reflect changes in fair value in income as they occur[83] - Level 3 fair value assets and liabilities, such as certain loans held for sale, Interest Rate Lock Commitments (IRLCs), MSRs, and MSLs, require significant judgment due to unobservable inputs[82][87] Assets and Liabilities Measured at Fair Value on a Recurring Basis (March 31, 2024) | Asset/Liability | Level 1 (in thousands) | Level 2 (in thousands) | Level 3 (in thousands) | Total (in thousands) | | :--------------------------------- | :--------------------- | :--------------------- | :--------------------- | :------------------- | | Short-term investment | $69 | $0 | $0 | $69 | | Principal-only mortgage-backed securities | $0 | $524,576 | $0 | $524,576 | | Loans held for sale | $0 | $4,733,958 | $466,392 | $5,200,350 | | Total derivative assets | $28,654 | $42,479 | $74,545 | $108,987 | | Mortgage servicing rights | $0 | $0 | $7,483,210 | $7,483,210 | | Total derivative liabilities | $0 | $41,698 | $4,737 | $40,784 | | Mortgage servicing liabilities | $0 | $0 | $1,732 | $1,732 | Key Level 3 Fair Value Inputs for Loans Held for Sale (March 31, 2024 vs. December 31, 2023) | Input | March 31, 2024 | December 31, 2023 | | :---------------------------------- | :------------- | :---------------- | | Fair value (in thousands) | $466,392 | $478,564 | | Discount rate (weighted average) | 7.4% | 7.2% | | 12-month projected housing price index change (weighted average) | 1.8% | 0.5% | | Voluntary prepayment/resale speed (weighted average) | 25.9% | 24.8% | | Total prepayment/resale speed (weighted average) | 29.3% | 32.2% | Key Unobservable Inputs for IRLCs (March 31, 2024 vs. December 31, 2023) | Input | March 31, 2024 | December 31, 2023 | | :---------------------------------- | :------------- | :---------------- | | Fair value (in thousands) | $69,808 | $89,593 | | Committed amount (in thousands) | $7,270,122 | $6,349,628 | | Pull-through rate (weighted average) | 79.1% | 81.1% | | MSR fair value (weighted average servicing fee multiple) | 4.4 | 4.2 | | MSR fair value (weighted average % of loan commitment) | 2.1% | 1.9% | Key Inputs for MSR Valuation (March 31, 2024 vs. December 31, 2023) | Input | March 31, 2024 | December 31, 2023 | | :---------------------------------- | :------------- | :---------------- | | Fair value (in thousands) | $7,483,210 | $7,099,348 | | UPB of underlying mortgage loans (in thousands) | $381,470,663 | $370,244,119 | | Weighted average note interest rate | 4.2% | 4.1% | | Weighted average servicing fee rate (bps) | 38 | 38 | | Annual total prepayment speed (weighted average) | 7.9% | 8.3% | | Equivalent average life (weighted average, years) | 8.2 | 8.1 | | Pricing spread (weighted average) | 6.4% | 6.4% | | Per-loan annual cost of servicing (weighted average) | $107 | $107 | Note 8—Mortgage-Backed Securities This note details the company's investments in mortgage-backed securities, including their purpose and accounting treatment - During Q1 2024, the company began investing in Agency principal-only stripped MBS for the purpose of hedging the fair value of its MSRs[122] - MBS are carried at fair value, with changes in fair value recognized in current period income[122] Investment in Principal-Only Stripped MBS (March 31, 2024) | Metric | Amount (in thousands) | | :-------------------- | :-------------------- | | Principal balance | $654,884 | | Unearned discounts | $(129,997) | | Cumulative valuation changes | $(311) | | Fair value | $524,576 | Note 9—Loans Held for Sale at Fair Value This note provides a breakdown of the company's loans held for sale, categorized by loan type and their fair value Loans Held for Sale at Fair Value (March 31, 2024 vs. December 31, 2023) | Loan Type | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :--------------------------------- | :----------------------------- | :----------------------------- | | Government-insured or guaranteed | $2,517,566 | $2,099,135 | | Conventional conforming | $2,158,242 | $1,821,085 | | Jumbo | $58,150 | $21,907 | | Closed-end second lien mortgage loans | $230,639 | $322,015 | | Purchased from Ginnie Mae securities serviced by the Company | $222,286 | $146,585 | | Repurchased pursuant to representations and warranties | $13,467 | $9,964 | | Total | $5,200,350 | $4,420,691 | | Fair value of loans pledged to secure assets sold under agreements to repurchase | $4,741,330 | $3,858,977 | Note 10—Derivative Financial Instruments This note describes the company's use of derivative financial instruments to manage market interest rate risk and their accounting - The company uses derivative financial instruments to moderate the effect of changes in market interest rates on the fair value of its IRLCs, inventory of loans held for sale, and MSRs[126] - All derivative financial instruments are recorded at fair value, with changes in fair value recognized in current period income, and are not designated for hedge accounting[127] Derivative Financial Instruments (March 31, 2024 vs. December 31, 2023) | Derivative Instrument | Notional Amount (Q1 2024, in thousands) | Fair Value Assets (Q1 2024, in thousands) | Fair Value Liabilities (Q1 2024, in thousands) | Notional Amount (Q4 2023, in thousands) | Fair Value Assets (Q4 2023, in thousands) | Fair Value Liabilities (Q4 2023, in thousands) | | :--------------------------------- | :-------------------------------------- | :---------------------------------------- | :----------------------------------------- | :-------------------------------------- | :---------------------------------------- | :----------------------------------------- | | Interest rate lock commitments | $7,270,122 | $74,545 | $4,737 | $6,349,628 | $90,313 | $720 | | Forward purchase contracts | $14,624,053 | $21,887 | $6,049 | $15,863,667 | $78,448 | $5,141 | | Forward sales contracts | $17,168,191 | $18,622 | $35,649 | $14,477,159 | $6,151 | $92,796 | | Total derivatives before netting | N/A | $145,678 | $46,435 | N/A | $258,809 | $101,866 | | Total derivatives after netting | N/A | $108,987 | $40,784 | N/A | $179,079 | $53,275 | Gains (Losses) on Derivative Financial Instruments (Q1 2024 vs. Q1 2023) | Derivative Activity | Consolidated Income Statement Line | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :--------------------------------- | :--------------------------------- | :--------------------- | :--------------------- | | Interest rate lock commitments | Net gains on loans held for sale at fair value | $(19,786) | $33,002 | | Hedged item: IRLCs and loans held for sale | Net gains on loans held for sale at fair value | $52,237 | $(94,798) | | Mortgage servicing rights | Net loan servicing fees–Mortgage servicing rights hedging results | $(294,334) | $47,227 | Note 11—Mortgage Servicing Rights and Mortgage Servicing Liabilities This note details the activity and fair value of the company's mortgage servicing rights (MSRs) and liabilities (MSLs) Mortgage Servicing Rights (MSRs) Activity (Q1 2024 vs. Q1 2023) | Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :--------------------------------- | :--------------------- | :--------------------- | | Balance at beginning of quarter | $7,099,348 | $5,953,621 | | MSRs resulting from loan sales | $412,520 | $286,533 | | Total change in fair value | $(28,658) | $(236,532) | | Balance at end of quarter | $7,483,210 | $6,003,390 | | UPB of underlying loans at end of quarter | $381,470,663 | $321,263,982 | Mortgage Servicing Liabilities (MSLs) Activity (Q1 2024 vs. Q1 2023) | Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :--------------------------------- | :--------------------- | :--------------------- | | Balance at beginning of quarter | $1,805 | $2,096 | | Total change in fair value | $(73) | $(85) | | Balance at end of quarter | $1,732 | $2,011 | | UPB of underlying loans at end of quarter | $22,644 | $28,380 | Contractual and Other Servicing Fees (Q1 2024 vs. Q1 2023) | Fee Type | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :------------------ | :--------------------- | :--------------------- | | Contractual servicing fees | $358,026 | $290,697 | | Other fees | $45,896 | $26,911 | | Total | $378,275 | $305,479 | Note 12—Other Assets This note provides a detailed breakdown of various other assets held by the company Other Assets (March 31, 2024 vs. December 31, 2023) | Asset Type | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :----------------------------------------- | :----------------------------- | :----------------------------- | | Margin deposits | $154,321 | $135,645 | | Capitalized software, net | $140,419 | $148,736 | | Operating lease right-of-use assets | $46,490 | $49,926 | | Servicing fees receivable, net | $34,312 | $37,271 | | Other servicing receivables | $45,280 | $30,530 | | Interest receivable | $39,837 | $35,196 | | Prepaid expenses | $35,325 | $36,044 | | Real estate acquired in settlement of loans | $18,195 | $14,982 | | Furniture, fixtures, equipment and building improvements, net | $17,951 | $19,016 | | Deposits securing Assets sold under agreements to repurchase and Notes payable secured by mortgage servicing assets | $16,175 | $15,653 | | Other | $75,063 | $59,461 | | Total | $623,368 | $582,460 | Note 13—Leases This note outlines the company's operating lease agreements, associated expenses, and key lease terms - The company has operating lease agreements for its facilities with remaining terms ranging from less than one year to seven years, with options to extend for up to five years[141] Lease Expense and Information (Q1 2024 vs. Q1 2023) | Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :------------------------------------- | :--------------------- | :--------------------- | | Operating leases | $4,031 | $4,949 | | Short-term leases | $84 | $163 | | Sublease income | $(425) | $(96) | | Net lease expense | $3,690 | $5,016 | | Payments for operating leases | $4,974 | $5,696 | | Remaining lease term (weighted average, years) | 4.1 | 4.6 | | Discount rate (weighted average) | 3.8% | 3.8% | Note 14—Short-Term Debt This note details the company's short-term borrowing facilities, including assets sold under agreements to repurchase and interest rates - The company's borrowing facilities contain various financial covenants, including net worth, debt-to-equity ratio, and liquidity, with management believing the company was in compliance as of March 31, 2024[143] - Assets sold under agreements to repurchase are secured by principal-only stripped mortgage-backed securities, loans held for sale, or participation certificates backed by mortgage servicing assets[144] Assets Sold Under Agreements to Repurchase (Q1 2024 vs. Q1 2023) | Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :------------------------------------- | :--------------------- | :--------------------- | | Average balance | $3,542,537 | $3,508,262 | | Weighted average interest rate | 7.24% | 6.54% | | Total interest expense | $70,435 | $59,223 | | Maximum daily amount outstanding | $5,442,438 | $5,768,570 | Mortgage Loan Participation Purchase and Sale Agreements (Q1 2024 vs. Q1 2023) | Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :------------------------------------- | :--------------------- | :--------------------- | | Average balance | $234,874 | $184,193 | | Weighted average interest rate | 6.69% | 6.06% | | Total interest expense | $4,077 | $2,923 | | Maximum daily amount outstanding | $515,990 | $515,537 | Note 15—Long-Term Debt This note describes the company's long-term debt obligations, including secured notes, unsecured senior notes, and their maturities - The company's long-term debt includes notes payable secured by mortgage servicing assets (Term Notes and Term Loans, Freddie Mac MSR Note Payable) and unsecured senior notes[155][162] Notes Payable Secured by Mortgage Servicing Assets (Q1 2024 vs. Q1 2023) | Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :------------------------------------- | :--------------------- | :--------------------- | | Average balance | $1,950,330 | $2,092,056 | | Weighted average interest rate | 8.92% | 7.72% | | Total interest expense | $44,006 | $40,778 | Unsecured Senior Notes (Q1 2024 vs. Q1 2023) | Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :------------------------------------- | :--------------------- | :--------------------- | | Average balance | $2,550,000 | $1,800,000 | | Weighted average interest rate | 5.90% | 5.07% | | Total interest expense | $38,832 | $23,428 | Maturities of Long-Term Debt (March 31, 2024) | Year | Notes payable secured by mortgage servicing assets (in thousands) | Unsecured senior notes (in thousands) | Total (in thousands) | | :--- | :------------------------------------------------ | :------------------------------------ | :------------------- | | 2025 | $250,000 | $650,000 | $900,000 | | 2026 | $0 | $0 | $0 | | 2027 | $0 | $0 | $0 | | 2028 | $1,180,000 | $0 | $1,180,000 | | 2029 | $550,000 | $650,000 | $1,200,000 | | Thereafter | $0 | $1,250,000 | $1,250,000 | | Total | $1,980,000 | $2,550,000 | $4,530,000 | Note 16—Liability for Losses Under Representations and Warranties This note details the company's liability for potential losses from representations and warranties on loan sales - The provision for losses under representations and warranties increased to $4.0 million in Q1 2024 from $1.7 million in Q1 2023, mainly due to a change in the mix of government-guaranteed and conventional loans sold[168][224] - Reductions in liability due to changes in estimate were $3.3 million in Q1 2024, up from $1.4 million in Q1 2023[168][225] Liability for Losses Under Representations and Warranties (Q1 2024 vs. Q1 2023) | Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :------------------------------------- | :--------------------- | :--------------------- | | Balance at beginning of quarter | $30,788 | $32,421 | | Provision for losses (from sales of loans) | $3,952 | $1,735 | | Provision for losses (from change in estimate) | $(3,320) | $(1,445) | | Losses incurred | $(1,444) | $(1,608) | | Balance at end of quarter | $29,976 | $31,103 | | UPB of loans subject to representations and warranties at end of quarter | $366,147,661 | $303,983,805 | Note 17—Income Taxes This note provides information on the company's effective income tax rates and the factors influencing them Effective Income Tax Rates (Q1 2024 vs. Q1 2023) | Period | Effective Income Tax Rate | | :----- | :------------------------ | | Q1 2024 | 10.4% | | Q1 2023 | 20.4% | - The decrease in the effective tax rate was primarily due to a decrease in the permanent adjustment related to non-deductible compensation and an increase in excess tax benefits of options exercised and equity awards vested[169][247] Note 18—Commitments and Contingencies This note outlines the company's various commitments and potential contingent liabilities, including legal proceedings - Commitments to purchase and fund loans totaled $7.3 billion as of March 31, 2024[170] - The Black Knight litigation concluded with a final award of $150.2 million plus interest against PLS, which was paid in full on February 14, 2024[177] - The arbitrator denied Black Knight's trade secrets misappropriation claim and granted PLS's claim that Black Knight violated federal antitrust laws, enjoining Black Knight from claiming ownership of PLS's Servicing Systems Environment (SSE) and from enforcing exclusive processing clauses[174][175][176] Note 19—Stockholders' Equity This note details changes in stockholders' equity, including information on the common stock repurchase program - The company's common stock repurchase program has a revised amount of $2 billion[179] Stock Repurchase Program Activity (Q1 2024 vs. Q1 2023) | Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | Cumulative Total (in thousands) | | :------------------------------------- | :--------------------- | :--------------------- | :------------------------------ | | Shares of common stock repurchased | 0 | 768 | 34,063 | | Cost of shares of common stock repurchased | $0 | $45,361 | $1,788,198 | Note 20—Net Gains on Loans Held for Sale This note provides a detailed breakdown of the net gains and losses recognized from loans held for sale at fair value Net Gains on Loans Held for Sale at Fair Value (Q1 2024 vs. Q1 2023) | Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :------------------------------------- | :--------------------- | :--------------------- | | From non-affiliates: Cash losses (Loans) | $(309,190) | $(55,386) | | From non-affiliates: Cash losses (Hedging activities) | $150,219 | $(216,138) | | From non-affiliates: Total cash losses | $(158,971) | $(271,524) | | Non-cash gains: MSRs resulting from loan sales | $412,520 | $286,533 | | Non-cash gains: Changes in fair values of loans and derivatives | $(90,123) | $90,151 | | Total net gains on loans held for sale at fair value | $162,441 | $104,385 | Note 21—Net Interest Expense This note details the components of net interest expense, including interest income and various interest expenses Net Interest Expense (Q1 2024 vs. Q1 2023) | Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :------------------------------------- | :--------------------- | :--------------------- | | Interest income | $156,426 | $128,478 | | Interest expense | $165,769 | $131,771 | | Net interest expense | $(9,343) | $(3,293) | | Interest income from placement fees relating to custodial funds | $76,133 | $51,219 | | Interest expense on assets sold under agreements to repurchase | $70,435 | $59,223 | | Interest expense on unsecured senior notes | $38,832 | $23,428 | Note 22—Stock-based Compensation This note provides information on the company's stock-based compensation plans and associated expenses Stock-based Compensation Activity (Q1 2024 vs. Q1 2023) | Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :------------------------------------- | :--------------------- | :--------------------- | | Grant date fair value: Performance-based RSUs | $20,915 | $18,611 | | Grant date fair value: Stock options | $6,935 | $5,492 | | Grant date fair value: Time-based RSUs | $12,333 | $11,041 | | Total grant date fair value | $40,183 | $35,144 | | Stock-based compensation expense | $4,583 | $11,650 | - Stock-based compensation expense decreased in Q1 2024, primarily due to lower expectations of achieving performance goals on performance-based RSUs[243] Note 23—Earnings Per Share This note details the calculation of basic and diluted earnings per share, including the impact of anti-dilutive awards Earnings Per Share Calculation (Q1 2024 vs. Q1 2023) | Metric | Q1 2024 (in thousands, except per share) | Q1 2023 (in thousands, except per share) | | :------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net income | $39,308 | $30,378 | | Weighted average shares of common stock outstanding | 50,547 | 50,154 | | Weighted average diluted shares of common stock outstanding | 53,100 | 53,352 | | Basic earnings per share | $0.78 | $0.61 | | Diluted earnings per share | $0.74 | $0.57 | Anti-Dilutive Stock-Based Compensation Awards Excluded from Diluted EPS (Q1 2024 vs. Q1 2023) | Award Type | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :--------------------------------------- | :--------------------- | :--------------------- | | Performance-based RSUs | 681 | 431 | | Time-based RSUs | 51 | 72 | | Stock options | 66 | 348 | | Total anti-dilutive units and options | 798 | 851 | Note 24—Regulatory Capital and Liquidity Requirements This note outlines the company's compliance with regulatory capital and liquidity requirements set by various agencies - The company, through PLS, is required to maintain specified levels of capital and liquidity to remain a seller/servicer in good standing with Agencies like Fannie Mae, Freddie Mac, and Ginnie Mae[189] - The company believes it is in compliance with Ginnie Mae's pending risk-based capital requirement, which will become effective December 31, 2024[190] Regulatory Capital and Liquidity Requirements (March 31, 2024 vs. December 31, 2023) | Requirement/Agency | Actual (March 31, 2024, in thousands) | Requirement (March 31, 2024, in thousands) | Actual (December 31, 2023, in thousands) | Requirement (December 31, 2023, in thousands) | | :----------------- | :------------------------------------ | :----------------------------------------- | :--------------------------------------- | :-------------------------------------------- | | Capital: Fannie Mae & Freddie Mac | $6,975,317 | $1,245,241 | $6,890,144 | $1,211,365 | | Capital: Ginnie Mae | $6,587,372 | $1,375,796 | $6,559,001 | $1,314,677 | | Liquidity: Fannie Mae & Freddie Mac | $1,147,108 | $564,427 | $1,243,927 | $543,913 | | Liquidity: Ginnie Mae | $1,394,563 | $406,799 | $1,684,457 | $389,501 | | Adjusted net worth / Total assets ratio: Ginnie Mae | 43% | 6% | 48% | 6% | | Tangible net worth / Total assets ratio: Fannie Mae & Freddie Mac | 35% | 6% | 37% | 6% | Note 25—Segments This note provides financial information broken down by the company's three operating segments: production, servicing, and investment management - The company conducts its business in three segments: production (loan origination, acquisition, and sale), servicing (loan servicing for owned and subserviced loans), and investment management (activities relating to PMT)[191][200] Segment Financial Performance (Q1 2024 vs. Q1 2023) | Metric (in thousands) | Production (Q1 2024) | Servicing (Q1 2024) | Investment Management (Q1 2024) | Production (Q1 2023) | Servicing (Q1 2023) | Investment Management (Q1 2023) | | :-------------------- | :------------------- | :------------------ | :------------------------------ | :------------------- | :------------------ | :------------------------------ | | Total net revenues | $184,671 | $111,598 | $9,391 | $121,523 | $172,070 | $9,269 | | Total expenses | $148,779 | $106,662 | $6,336 | $141,163 | $114,623 | $8,929 | | Income before provision for income taxes | $35,892 | $4,936 | $3,055 | $(19,640) | $57,447 | $340 | | Segment assets at quarter end | $5,413,277 | $14,373,780 | $14,684 | $7,543,466 | $12,534,419 | $25,300 | - The Production segment's income before taxes significantly improved from a loss of $19.640 million in Q1 2023 to a gain of $35.892 million in Q1 2024[192][193] - The Servicing segment's income before taxes decreased substantially from $57.447 million in Q1 2023 to $4.936 million in Q1 2024[192][193] Note 26—Subsequent Events This note discloses significant events that occurred after the balance sheet date but before the financial statements were issued - On April 24, 2024, the company announced a cash dividend of $0.20 per common share, payable on May 24, 2024[194] - All agreements to sell assets under agreements to repurchase that matured before the report date were extended or renewed[194] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial condition and results, covering business trends, performance, balance sheet, cash flows, liquidity, and capital resources Overview This section introduces PennyMac Financial Services, Inc. as a specialty firm focused on residential mortgage loan production, servicing, and investment management - PennyMac Financial Services, Inc. (PFSI) is a specialty financial services firm primarily focused on the production and servicing of U.S. residential mortgage loans and the management of investments related to the U.S. mortgage market[196] - The company conducts its business in three segments: production (loan origination, acquisition, and sale), servicing (loan servicing for owned and subserviced loans), and investment management (activities relating to PennyMac Mortgage Investment Trust, PMT)[197][200] - PennyMac Loan Services, LLC (PLS) is a non-bank producer and servicer of mortgage loans, approved by Fannie Mae, Freddie Mac, Ginnie Mae, FHA, VA, and USDA[197] Business Trends This section discusses macroeconomic factors and market conditions influencing the mortgage industry, including interest rates and origination growth - Ongoing inflationary pressures and sustained high federal funds rates are expected to constrain mortgage origination market growth from an estimated $1.4 trillion in 2023 to $1.8 trillion in 2024[199] - Market capacity has adjusted to the new interest rate environment, leading to improved profit margins in mortgage production[202] - Higher interest rates have increased floating rate borrowing costs and interest income from custodial funds, while leading to prepayment speeds below historical averages in the mortgage servicing portfolio[202] Results of Operations This section provides a high-level summary of the company's financial performance, including total net revenues, expenses, and net income Key Financial Results (Q1 2024 vs. Q1 2023) | Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | Change (in thousands) | YoY Change (%) | | :------------------------------------- | :--------------------- | :--------------------- | :-------------------- | :------------- | | Total net revenues | $305,660 | $302,862 | $2,798 | 0.92% | | Total expenses | $261,777 | $264,715 | $(2,938) | -1.11% | | Income before provision for income taxes | $43,883 | $38,147 | $5,736 | 15.04% | | Net income | $39,308 | $30,378 | $8,930 | 29.39% | | Basic EPS | $0.78 | $0.61 | $0.17 | 27.87% | | Diluted EPS | $0.74 | $0.57 | $0.17 | 29.82% | | Adjusted EBITDA | $227,728 | $128,967 | $98,761 | 76.58% | - Income before provision for income taxes increased by $5.7 million, primarily due to a $58.1 million increase in Net gains on loans held for sale at fair value and a $2.9 million decrease in total expenses, partially offset by a $47.9 million decrease in Net loan servicing fees[209][210] - Adjusted EBITDA, a non-GAAP measure, increased significantly, providing supplemental information for analyzing business performance[204][205] Net Gains on Loans Held for Sale at Fair Value This section analyzes factors contributing to changes in net gains on loans held for sale, including production volume and hedging activities - Net gains on loans held for sale at fair value increased by $58.1 million to $162.4 million in Q1 2024, driven by higher margins across all production channels and increased production volume[212] - Non-cash proceeds, including the fair value of MSRs, represented approximately 254% of gains on sales of loans held for sale in Q1 2024, compared to 274% in Q1 2023[215][216] - The provision for losses under representations and warranties relating to current loan sales increased to $4.0 million in Q1 2024, primarily due to a change in the mix of government-guaranteed and conventional loans[224] Net Gains on Loans Held for Sale at Fair Value Breakdown (Q1 2024 vs. Q1 2023) | Metric (in thousands) | Q1 2024 | Q1 2023 | | :--------------------------------- | :------ | :------ | | Total cash losses | $(158,971) | $(271,524) | | Non-cash gains: Changes in fair values of loans and derivatives | $(90,123) | $90,151 | | Non-cash gains: MSRs resulting from loan sales | $412,520 | $286,533 | | Total net gains on loans held for sale from non-affiliates | $162,794 | $104,870 | | Total net gains on loans held for sale | $162,441 | $104,385 | Interest Rate Lock Commitments Issued by Loan Type and Production Channel (Q1 2024 vs. Q1 2023) | Metric (in thousands) | Q1 2024 | Q1 2023 | | :--------------------------------- | :------ | :------ | | Total IRLCs issued | $22,585,632 | $18,871,512 | | Government-insured or guaranteed loans | $10,794,258 | $12,527,083 | | Conventional conforming loans | $11,322,087 | $6,124,614 | | Consumer direct channel | $2,152,369 | $2,198,643 | | Broker direct channel | $3,352,407 | $2,551,517 | | Correspondent channel | $17,080,856 | $14,121,352 | Loan Origination Fees This section discusses the trends and drivers behind changes in loan origination fees - Loan origination fees increased by $4.9 million in Q1 2024 compared to Q1 2023, primarily due to higher production volume in the correspondent and broker direct channels[227] Fulfillment Fees from PennyMac Mortgage Investment Trust This section analyzes changes in fulfillment fees earned from PennyMac Mortgage Investment Trust (PMT) - Fulfillment fees from PMT decreased by $7.9 million in Q1 2024 compared to Q1 2023, mainly due to a decrease in loans produced on PMT's behalf, partially offset by a decrease in discretionary reductions in the fulfillment fee rate[230] Net Loan Servicing Fees This section details the components of net loan servicing fees, including contractual fees, MSR valuation changes, and hedging results Net Loan Servicing Fees Breakdown (Q1 2024 vs. Q1 2023) | Metric (in thousands) | Q1 2024 | Q1 2023 | | :--------------------------------- | :------ | :------ | | Loan servicing fees | $424,184 | $338,057 | | Effects of MSRs and MSLs net of hedging results | $(323,230) | $(189,220) | | Net loan servicing fees | $100,954 | $148,837 | - Loan servicing fees from non-affiliates and other fees increased due to growth in the loan servicing portfolio and increased other incentives received for loss mitigation activities and recovery of servicing premiums[232] - Changes in fair value of MSRs attributable to changes in fair value inputs increased due to the effect of an increase in interest rates, which reduces prepayment rates and increases expected cash flows from servicing rights[235] - Hedging results reflected valuation losses attributable to the effects of interest rate increases on hedging instruments and increased net exposure to interest rate volatility[236] Loan Servicing Portfolio (March 31, 2024 vs. December 31, 2023) | Metric (in thousands) | March 31, 2024 | December 31, 2023 | | :--------------------------------- | :------------- | :---------------- | | Total loans serviced | $617,424,038 | $607,216,769 | | Owned servicing (MSRs and MSLs) | $381,493,307 | $370,269,011 | | Subserviced for PMT | $230,809,585 | $232,643,144 | | Delinquencies (owned servicing, 30-89 days) | $12,679,635 | $14,414,423 | | Delinquencies (owned servicing, 90+ days) | $7,128,874 | $7,635,817 | Net Interest Expense This section explains changes in net interest expense, considering interest income and various borrowing costs - Net interest expense increased by $6.1 million in Q1 2024, primarily due to higher interest expense on borrowings driven by increased interest rates and balance sheet growth, partially offset by higher interest income from custodial fund placement fees[241] Management Fees from PennyMac Mortgage Investment Trust This section discusses the management fees earned from PennyMac Mortgage Investment Trust (PMT) Management Fees from PMT (Q1 2024 vs. Q1 2023) | Metric (in thousands) | Q1 2024 | Q1 2023 | | :-------------------- | :------ | :------ | | Base management | $7,188 | $7,257 | | Performance incentive | $0 | $0 | | Total | $7,188 | $7,257 | - Management fees decreased by $69,000 in Q1 2024, primarily due to a decrease in PMT's average shareholders' equity[242] Expenses This section provides an analysis of the company's operating expenses, including compensation, professional services, and loan origination costs Compensation Expenses (Q1 2024 vs. Q1 2023) | Metric (in thousands) | Q1 2024 | Q1 2023 | | :-------------------- | :------ | :------ | | Salaries and wages | $92,784 | $92,835 | | Severance | $643 | $2,856 | | Incentive compensation | $26,165 | $18,988 | | Stock and unit-based compensation | $4,583 | $11,650 | | Total compensation | $146,376 | $147,935 | | Average head count | 3,916 | 4,143 | - Professional services expenses decreased by $11.7 million in Q1 2024, primarily due to decreased legal expenses related to the Black Knight litigation[246] - Loan origination expense increased by $3.5 million due to higher correspondent and broker direct origination volumes[244] - Servicing expenses increased by $3.5 million due to an increase in provision for losses on servicing advances[245] Balance Sheet Analysis This section reviews significant changes in the company's balance sheet items, including assets, liabilities, and equity Key Balance Sheet Items (March 31, 2024 vs. December 31, 2023) | Metric (in thousands) | March 31, 2024 | December 31, 2023 | | :--------------------------------- | :------------- | :---------------- | | Total Assets | $19,801,741 | $18,844,563 | | Total Liabilities | $16,231,358 | $15,305,960 | | Stockholders' equity | $3,570,383 | $3,538,603 | | Principal-only stripped mortgage-backed securities at fair value pledged to creditors | $524,576 | $0 | | Loans held for sale at fair value | $5,200,350 | $4,420,691 | | Mortgage servicing rights at fair value | $7,483,210 | $7,099,348 | | Short-term debt | $5,799,152 | $4,210,010 | | Long-term debt | $4,493,051 | $4,393,066 | | Total debt / Stockholders' equity | 2.9 | 2.4 | | Total debt / Tangible stockholders' equity | 3.0 | 2.5 | - Total assets increased by $1.0 billion, primarily due to increases in principal-only stripped MBS ($524.6 million), loans held for sale ($779.7 million), and MSRs ($383.9 million)[249] - Total liabilities increased by $0.9 billion, mainly due to a $1.7 billion increase in borrowings to fund inventory and MSRs, leading to higher leverage ratios[250] Cash Flows This section analyzes the company's cash flows from operating, investing, and financing activities Cash Flow Summary (Q1 2024 vs. Q1 2023) | Metric (in thousands) | Q1 2024 | Q1 2023 | Change | | :--------------------------------- | :------ | :------ | :----- | | Operating | $(897,940) | $(3,264,891) | $2,366,951 | | Investing | $(782,612) | $(20,933) | $(761,679) | | Financing | $1,669,575 | $3,455,191 | $(1,785,616) | | Net (decrease) increase in cash | $(10,977) | $169,367 | $(180,344) | - Net cash used in operating activities decreased by $2.37 billion, primarily influenced by changes in the inventory of mortgage loans held for sale[252] - Net cash used in investing activities increased by $761.7 million, mainly due to the purchase of principal-only stripped MBS ($524.7 million) and net settlement of MSR hedging derivatives ($224.8 million)[253] - Net cash provided by financing activities decreased by $1.79 billion, reflecting a reduction in net borrowings compared to the prior year[254] Liquidity and Capital Resources This section discusses the company's sources of liquidity, capital structure, and compliance with financial covenants - The company's primary liquidity sources are cash flows from business activities, bank borrowings, and proceeds from equity or debt offerings, and it believes its liquidity is sufficient to meet current needs[255][256] - Secured debt facilities for MSRs and servicing advances take various forms, including variable funding notes, term notes, and term loans[258] - On February 29, 2024, the company issued $425 million in secured term notes (2024-GT1 Notes) maturing on March 26, 2029[259] - Key financial covenants for PLS include a minimum of $100 million in unrestricted cash, $1.25 billion in tangible net worth, and a maximum total indebtedness to tangible net worth ratio of 10:1[262][263] - The common stock repurchase program was increased to $2 billion in August 2021, with approximately $1.8 billion of common shares repurchased from inception through March 31, 2024[269] - All debt financing arrangements that matured between March 31, 2024, and the date of this Report have been renewed or extended[282] Critical Accounting Estimates This section highlights the significant judgments and estimates made by management in preparing the financial statements - The preparation of financial statements requires management to make significant judgments and estimates, particularly concerning fair value measurements[283] - There have been no significant changes in critical accounting policies and estimates during Q1 2024 compared to the Annual Report on Form 10-K for the year ended December 31, 2023[284] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section discusses the company's exposure to market risks, primarily fair value, interest rate, and prepayment risk, and outlines mitigation strategies - The primary market risks the company is exposed to are fair value risk, interest rate risk, and prepayment risk[285][286] - Rising interest rates generally negatively affect the fair value of IRLCs and loans held for sale, and positively affect the fair value of MSRs, while also influencing prepayment speeds[288] - The company engages in risk management activities using derivative financial instruments (e.g., MBS forward sale contracts, put options, Treasury and interest rate swap futures, options, and swaptions) to mitigate interest rate and prepayment risks on its IRLCs, loans held for sale, and MSRs[291][292] Estimated Change in Fair Value of MSRs due to Shifts in Key Inputs (March 31, 2024) | Change in fair value attributable to shift in: | -20% (in thousands) | -10% (in thousands) | -5% (in thousands) | +5% (in thousands) | +10% (in thousands) | +20% (in thousands) | | :------------------------------------------- | :------------------ | :------------------ | :----------------- | :----------------- | :------------------ | :------------------ | | Prepayment speed | $483,182 | $232,507 | $114,114 | $(110,071) | $(216,317) | $(418,132) | | Pricing spread | $421,572 | $205,043 | $101,139 | $(98,475) | $(194,382) | $(378,857) | | Annual per-loan cost of servicing | $180,457 | $90,228 | $45,114 | $(45,114) | $(90,228) | $(180,457) | Item 4. Controls and Procedures Management concluded disclosure controls were effective as of March 31, 2024, with no material changes in internal control over financial reporting - The company's disclosure controls and procedures were effective as of March 31, 2024, ensuring that information required to be disclosed is recorded, processed, summarized, and reported timely[297] - There have been no material changes in the company's internal control over financial reporting during Q1 2024[298] PART II. OTHER INFORMATION This part includes information on legal proceedings, risk factors, equity security sales, defaults, mine safety, other information, and exhibits Item 1. Legal Proceedings The company is involved in various legal and regulatory proceedings, with management believing no material adverse effect on financial condition or results - Management believes that the ultimate disposition of any legal and regulatory proceedings will not have a material adverse effect on the company's financial condition, results of operations, or cash flows[300] - Further discussion of legal and regulatory proceedings is incorporated by reference from Note 18—Commitments and Contingencies[300] Item 1A. Risk Factors No material changes to risk factors from the Annual Report on Form 10-K for the year ended December 31, 2023, were identified - No material changes from the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2023, were identified[301] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered equity securities were sold in Q1 2024, and the common stock repurchase program had no activity, leaving $212.3 million available - There were no sales of unregistered equity securities during the quarter ended March 31, 2024[302] Stock Repurchase Program Activity (Q1 2024) | Period | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or program | Approximate dollar value of shares that may yet be purchased under the plans or program | | :------------------------------------- | :------------------------------- | :--------------------------- | :---------------------------------------------------------------------------- | :------------------------------------------------------------------------------------ | | January 1, 2024 – January 31, 2024 | 0 | $0 | 0 | $212,338,815 | | February 1, 2024 – February 29, 2024 | 0 | $0 | 0 | $212,338,815 | | March 1, 2024 – March 31, 2024 | 0 | $0 | 0 | $212,338,815 | | Total | 0 | $0 | 0 | $212,338,815 | Item 3. Defaults Upon Senior Securities No defaults upon senior securities occurred during the quarter ended March 31, 2024 - No defaults upon senior securities occurred during the quarter ended March 31, 2024[304] Item 4. Mine Safety Disclosures This item is not applicable to the company - Mine Safety Disclosures are not applicable to PennyMac Financial Services, Inc[305] Item 5. Other Information No directors or officers adopted, terminated, or modified Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2024 - None of the company's directors or officers adopted, terminated, or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the quarter ended March 31, 2024[306] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including organizational documents, indenture supplements, and certifications - The exhibits include organizational documents, such as the Amended and Restated Certificate of Incorporation and Bylaws, and the Series 2024-GT1 Indenture Supplement[308] - Certifications from the Chief Executive Officer and Chief Financial Officer are included pursuant to Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002[308] - Interactive data files (XBRL) are provided for the consolidated financial statements and notes[308][309]